Finance Minister Dr. Cassiel Ato Forson has disclosed that Ghana spent 44 percent of its total tax revenue on public sector wages in 2025, significantly exceeding the ECOWAS-recommended threshold of 35 percent, underscoring severe fiscal constraints facing the country.
Presenting at a high-level meeting between President John Mahama and organised labour, the minister outlined the growing pressure of the public sector wage bill on government finances.
He revealed that out of the total tax revenue of GH¢183 billion in 2025, statutory obligations — including transfers to DACF, GETFund, NHIL, and debt servicing — consumed GH¢122.1 billion, leaving only GH¢61.9 billion available.
However, the government’s wage bill alone amounted to GH¢78.9 billion, creating a financing gap that forced the state to borrow approximately GH¢17 billion just to meet salary obligations.
Dr. Forson emphasised that the combined burden of wages, debt servicing, and statutory transfers exceeded total tax revenue, effectively crowding out other critical expenditures.
He warned that under the current fiscal conditions, government lacks the financial space to adequately invest in essential infrastructure such as schools, hospitals, and roads.
The Finance Minister noted that while fair remuneration remains a constitutional obligation, the current trajectory of public sector compensation poses a significant structural risk to fiscal sustainability and service delivery.
He stressed the need for careful management of wage growth alongside broader fiscal reforms to restore balance and create room for development spending.
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Source: www.myjoyonline.com