The government has formally informed the International Monetary Fund of its decision to cap public sector wage increases at 10% this year, a move aimed at reining in spending as part of broader economic reforms under its $3 billion IMF programme.
The wage cap, disclosed in the IMF’s latest review of Ghana’s 36-month Extended Credit Facility arrangement, is one of several expenditure control measures built into the government’s 2025 budget framework. The programme, which runs through 2026, is central to Ghana’s efforts to stabilize its economy following years of fiscal slippage, rising debt, and inflationary pressures.
“On the expenditure side, the 2025 Budget comprises measures that aim at containing primary expenditure, including capping public sector wage increases to 10 percent,” Ghanaian authorities told the IMF, according to the Fund’s review document.
The announcement comes ahead of the government’s 2025 Mid-Year Budget Review, which Finance Minister Cassiel Ato Forson is set to present to Parliament on July 24.
Ghana’s public sector wage bill is projected to exceed $7 billion this year—more than 30% of expected revenues and grants, according to data from the Ministry of Finance. With the wage cap in place, salary increases for public workers will be limited even as inflationary pressures remain a concern for households and unions.
The government has also committed to trimming other forms of spending, including limiting allocations for goods and services, restructuring statutory funds, and eliminating low-impact or inefficient programmes. Foreign-financed capital investments will be “carefully paced,” while some social benefits—especially in health and agriculture—will receive modest increases to offset reductions in external donor support, particularly from USAID.
According to the IMF, the government has allocated “limited additional funding,” estimated to be less than 0.1% of GDP, to support priority sectors.
Meanwhile, a comprehensive audit of domestic arrears is underway. Preliminary findings suggest that a significant portion of these arrears may lack valid documentation, raising the possibility of downward revisions to the government’s outstanding liabilities.
The government also reiterated its intention to finalize reforms to the controversial Single Spine Pay Policy, which labor unions have criticized for inequities and stagnant wage growth. The updated framework is expected to more closely link pay to productivity.
As Ghana tightens fiscal controls to meet IMF targets, labor unions—including the Ghana Registered Nurses and Midwives Association—are closely watching the upcoming budget presentation for clarity on how their concerns will be addressed.
