The Minister for Finance, Dr. Cassiel Ato Forson, has disclosed that compensation for public sector workers remains the largest component of government expenditure, placing considerable strain on other areas of spending.
He made this known during a dialogue with Organised Labour at the Jubilee House in Accra on Tuesday, March 17, as part of ongoing engagements between government and labour representatives.
The Finance Minister explained that compensation of public sector employees accounts for the largest share of government expenditure, representing 39 percent, while debt servicing accounts for 32 percent and grants to other government units make up 29 percent.
He noted that the high wage bill has created a crowding-out effect, limiting government spending in other critical areas. Dr. Forson indicated that although a significant portion of expenditure is devoted to compensation, only a small percentage is allocated to goods and services, as well as capital expenditure.
According to him, goods and services account for just three percent of government spending, while capital expenditure represents only six percent. He added that social benefits constitute a mere one percent of total expenditure, while grants to other government units, including statutory funds, account for about 24 percent, with debt service representing approximately 26 percent.
“Compensation of Ghana’s employees is currently the largest share of government expenditure. Of the total government expenditure, employee compensation accounts for 39%, debt service accounts for 32%, and grants to other government units account for 29%,” he stated.
He further outlined key indicators demonstrating the significant weight of compensation within Ghana’s fiscal framework.
