Ghana’s public servants will have to contend with lower pay following conditions part of the International Monetary Fund’s bailout package. According to the 3-year IMF 3-billion-dollar bailout package, the government must cut back on spending to meet the fiscal discipline conditionality.
According to the deal, the government must cut back public servants’ salaries by 0.5 percent of the gross domestic product. Defending the stance, the government says moderating the public wage bill is critical to meeting the targets set by the international monetary fund.
Part of the public wage bill conditionalities indicates that the government will have to calibrate its public sector workers to balance burden sharing, productivity, and the capacity to pay for the labor.
More reviews are bound to occur within the next three years to significantly reduce government spending. Among the most affected projects include political government projects that the NPP government campaigned on in 2017 and promised to implement upon assuming office.
Some projects under review including 1 village one dam, one district one factory will be reviewed and streamlined. Agenda 111 will be reprogrammed to be completed over the next 5 years 2022-2027 in line with budgeted allocation.
Speaking at the Qatar economic forum, President Akuffo Addo confirmed that the government had given the international monetary fund assurances among them: rationalization of government expenditure, domestic revenue mobilization through the introduction of new taxes, and reducing the fiscal deficit to the 5 percent threshold as mandated by law.
Acknowledging the economic turmoil that the country has endured this past year, the president in his State of the Nation address asked Ghanaians to be proud of how far the country has come. According to President Akuffo Addo, the lasting global economic impact of Covid 19 coupled with the Russian invasion of Ukraine is solely to blame for the economic downturn that saw debt to GDP rise to over 80 percent, inflation cross the 50 percent mark and the cedi lose over 40 percent of its value to the dollar.
With a 3 billion IMF package being touted as bailout funding, president Akuffo Addo asked Ghanaians to be cautiously optimistic as the path to Ghana’s economic recovery is a long one and cannot be instantly fixed by a silver bullet.