Ghana raises salaries of civil servants despite economic problems
2023.01.12 15:31
Ghana raises salaries of civil servants despite economic problems
By Ray Johnson
Budrigannews.com – In a joint statement, the government of Ghana and the trade unions said that they had reached an agreement on Thursday to raise the salaries of all public servants by 30% for the year 2023. This comes as the country struggles to get out of debt and deal with high inflation.
The producer of gold, oil, and cocoa in West Africa is going through the worst economic downturn in a generation.
As government spending reductions and interest rate increases by the central bank failed to contain inflation, which reached a new high of 54 percent last month, the local cedi experienced a significant decline against the dollar in the previous year.
In November, public sector unions began negotiating salary increases with the government, a few months after hardships prompted street protests that prompted the government to seek assistance from the IMF.
On Thursday, the two parties came to an agreement on a general increase of 30% in base pay that would take effect on January 1, 2023.
In an effort to contain inflation, slow the depreciation of the cedi, and reduce the deficit, Ghana’s government announced extensive spending cuts in March, including a reduction in ministerial salaries.
However, citing the impact of “global challenges” on citizens, it also increased a cost of living allowance for public employees by 15% in July.
In December, Ghana reached a staff-level agreement with the IMF for a $3 billion, three-year support package. However, in order to access the funds, the country will need to restructure its debt.
Last month, the government announced that it would default on nearly all of its $28.4 billion in external debts and began a domestic debt exchange program.
This week, it requested that its bilateral debt be restructured under the G20 common framework platform.
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