Kwasi Agyei, the Controller and Accountant-General, has issued a stark warning about the nation’s rising wage bill.
Speaking at a media briefing in Accra, organized by the African Association of Accountants General (AAAG) to announce the Association’s third Annual Conference, Agyei highlighted that public sector salaries now consume over 57 percent of the country’s domestic revenue, raising alarms about fiscal sustainability.
Agyei articulated that such a disproportionate burden on wages is not only unsustainable but is also crowding out vital spending in critical sectors such as health, infrastructure, and education. He expressed deep concern over how this wage consumption is limiting the government’s ability to allocate resources to other essential areas that need attention and funding.
“When you sum up all the money that has come in, the average shows that 57 or 58 percent goes into the salaries we pay. This is a threat to fiscal sustainability,” he stated, emphasizing the gravity of the situation. He further elaborated, “It means all the revenues that come—almost 60 percent—are used to pay salaries, which leads to a crowding-out effect. We are not creating space for other prioritized government expenditure.”
This warning comes in the wake of a recent decision in February, where labor unions accepted a 10% salary increase amid calls for moderation in wage demands from President John Mahama. The President assured workers that once the economy stabilizes, he would work to secure higher remuneration for them.
As the government grapples with these financial challenges, efforts are underway to reign in expenditures to meet the targets set by the International Monetary Fund (IMF). Agyei’s statements underscore the urgency for reforms aimed at achieving a more balanced and sustainable allocation of public resources, as Ghana navigates the complex landscape of fiscal management.
With the stakes high, the call for action resonates through the corridors of power, urging a reassessment of spending priorities that could ultimately shape the future prosperity of the nation.
Source: Apexnewsgh.com/Ngamegbulam Chidozie Stephen
