Austin Gamey, a Labour Consultant, has criticized the government’s 10% salary increase for public sector employees, warning that it could exacerbate inflation and place additional strain on the economy.

In an interview with Citi News following the announcement, Austin Gamey criticized the wage adjustment, calling it excessive. He argued that even a 1% increase in public sector wages could push the economy into a higher inflationary bracket, which would have a negative impact on everyone, including the workers receiving the raise.

“I would have preferred a lower increase because even a 1% adjustment in public sector wages would take us to another inflationary bracket, and that would affect all of us, including them,” he warned.

While acknowledging that private-sector wage adjustments tend to align better with economic realities, Gamey stated that the 10% increase was not the best solution.

“The private sector adjusts more effectively, but the public sector doesn’t. So, for fairness, the 10% is probably the best we can do for now, but I would have preferred a different approach,” he added.

Gamey further emphasized that public sector salary increases should be tied to productivity, a practice that Ghana has not yet fully adopted.

“The issue is base pay. Ideally, it should be based on productivity, but as a nation, we are not there yet. We are still not fully implementing the performance management system in Ghana,” he stated.

His comments follow the government’s official approval of the 10% salary adjustment after negotiations between Organized Labour and President John Dramani Mahama, who personally met with union leaders to gain their support.

The pay rise, effective January 2025, marks the second wage increase in less than a year, following a 23% rise in 2024, which aimed to help workers cope with economic challenges.