By Enyichukwu Enemanna
Two months after negotiations, trade unions and Ghana’s government have agreed to a 30 percent pay rise for all public servants for 2023, they announced in a joint statement on Friday.
This comes amidst Ghana’s quest to reduce the country’s debt profile and tackle rampant inflation.
The trade unions representing public service employees started negotiations for salary increase with the government in November, a few months after hardship spurred street protests that pushed the government to seek help from the International Monetary Fund (IMF).
The pay rise which takes effect January 1, 2023 was reached by the two parties on Thursday at 30 percent across board.
The West African gold, oil and cocoa producer, once described as Africa’s shining star by the World Bank, is battling its worst economic crisis in a generation, with inflation hovering at a record 50.3 percent, the highest in 21 years.
The local cedi dropped heavily against the US dollar last year as government spending cuts and central bank interest rate hikes failed to tame inflation, which rose to a new high of 54 percent last month.
Ghana’s government announced sweeping spending cuts in March, including a lowering of ministers’ salaries, to reduce the deficit, contain inflation and slow the cedi’s slide.
But it also increased the cost of living allowance for public workers by 15 percent in July, citing the effect of “global challenges” on citizens.
Ghana secured a staff-level agreement with the IMF for a $3bn, three-year support package in December. But it needs to restructure its debt to access the funds.
The government launched a domestic debt exchange programme last month and later said it would default on nearly all of its $28.4bn of external debts.