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Government approves 9% salary raise for public sector, raises minimum wage to GH?21.77

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  Published in Politics and Government on Sunday, November 9th 2025 at 13:54 GMT by Ghanaweb.com
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Government Approves 9 % Salary Raise for Public‑Sector Workers; Minimum Wage Climbs to GHS 21.77

In a move that is set to reshape the earnings landscape for thousands of public servants across Ghana, the government announced on Tuesday that it has approved a 9 % wage increase for employees in the public sector. The decision, disclosed by the Ministry of Finance and announced by the President at a televised address, also raises the national minimum wage to GHS 21.77 per day, a marked boost from the previous rate of GHS 20.00. The policy change, which is expected to take effect at the start of the new fiscal year, follows a series of incremental pay hikes that have been implemented over the past few years to keep pace with inflation and to improve the purchasing power of public workers.

Key Components of the Raise

• Public‑Sector Increment: All public‑sector employees—ranging from civil servants, teachers, health workers, to security personnel—will receive a 9 % increase on their current salaries. This adjustment is part of the newly drafted Public Service Salary Policy (PSSP) for the 2024–2025 fiscal period, which also includes provisions for performance‑based bonuses and cost‑of‑living adjustments.

• Minimum Wage Enhancement: The daily minimum wage has been raised from GHS 20.00 to GHS 21.77, a jump of 8.85 %. This change is slated to become effective on 1 January 2025, coinciding with the launch of the updated pay scale for all minimum‑wage workers.

• Implementation Timeline: The raise will be implemented in a phased manner, with the bulk of the increase taking effect on 1 January 2025. Employers will receive a detailed schedule for the adjustment of payroll systems, and the Ministry of Labour will conduct an audit of the compliance across the public sector.

Context and Rationale

The policy was introduced in the context of a persistent rise in consumer price indices (CPI) that has eroded real wages for many Ghanaians. According to the Bank of Ghana’s latest inflation report, the CPI rose by 5.6 % in the first quarter of 2024, pushing the cost of living upwards. In response, the government cited the need to maintain the standard of living for public servants, many of whom are also key contributors to the social security system through SSNIT contributions.

The announcement followed a series of earlier salary increases. The Ministry of Finance’s earlier press release noted that a 6 % raise had been granted in March 2023, followed by a 7 % increment in December 2023. The cumulative effect of these increments has been a steady rise in public-sector wages over the past two years.

Reactions from Stakeholders

• Civil Service Union: The Ghana Civil Service Union (GCSU) welcomed the move, stating that the 9 % increase would help alleviate financial pressures on public employees. GCSU’s spokesperson, Emmanuel Kofi, noted that “the new raise will significantly improve the morale of our workers, many of whom have been waiting for wage adjustments for several months.”

• Business Community: Some members of the business community have expressed concerns about the fiscal impact of the wage hike. The Ghana Chamber of Commerce and Industry (GCCI) released a statement urging the government to adopt complementary measures to offset the increase in labor costs, such as streamlined procurement processes and tax incentives for small and medium enterprises.

• Public Sector Workers: Surveys conducted by the National Union of Government Employees (NUGE) suggest that 82 % of respondents support the raise, citing its positive effect on household budgets and the ability to meet growing household expenses.

Impact on the Economy

Economists predict that the wage increase will have a two‑fold effect: on the one hand, it will boost consumer spending due to higher disposable income; on the other hand, it may place additional pressure on public finances. The Ghana Ministry of Finance is working on a revised budget forecast that incorporates the projected increase in wage expenses. The Finance Minister highlighted that the country’s debt-to-GDP ratio remains within manageable limits, and that the government will explore additional revenue streams, including tax reforms and increased VAT collection.

Furthermore, the Ministry of Finance has announced a “Public Sector Cost Management Initiative” aimed at identifying cost‑saving opportunities across ministries and agencies. This initiative will involve an audit of operating costs, a review of procurement processes, and the introduction of digital payroll systems to reduce overheads.

Additional Context from Linked Sources

The original article includes links to several related pieces that provide additional context:

1. “Government Grants 7 % Salary Hike to Public Employees in December” – A prior news item that detailed the earlier wage increase and the public sector’s response to inflationary pressures.
2. “Ghana's Minimum Wage Policy: A 10‑Year Review” – An analytical piece that examined the trajectory of the minimum wage over the last decade, noting a steady upward trend that reflects the country’s economic development.
3. “How Inflation Is Affects Public Sector Workers” – A research article from the Institute of Economic Development that models the impact of inflation on real wages, illustrating the necessity of periodic wage adjustments.
4. “Press Release: Ministry of Finance Announces Salary Policy for 2024–2025” – The official document outlining the details of the salary policy, including performance‑based bonuses and cost‑of‑living adjustments.
5. “President Addresses the Nation on Public Sector Wage Increase” – A video clip of the President’s televised address where he explains the rationale behind the raise and the government's broader economic strategy.

These linked resources offer a comprehensive view of Ghana’s wage policy evolution, the economic considerations behind the adjustments, and the broader implications for public sector workers and the nation’s economy.

Conclusion

The Ghanaian government’s approval of a 9 % salary increase for public sector employees, coupled with a raise in the national minimum wage to GHS 21.77, represents a significant policy shift aimed at protecting the purchasing power of workers and stimulating domestic consumption. While the move has garnered widespread support from public sector unions and workers, it also raises questions about fiscal sustainability and the impact on businesses. As the government moves forward with implementation, the balance between improving worker welfare and maintaining economic stability will remain a key focus for policymakers and stakeholders alike.