Business News Thu, 6 Jan 2022

7 percent public sector salary increase not enough – Dr Donkor

Salary increment must march inflation rate – Economist

Inflation rate as of November 2021 was 12.2 percent

Salary increment below inflation rate reduces consumers purchasing power – Dr Donkor

A former Minister for Power, Kwabena Donkor, has indicated government's announcement of 7 percent increment in salaries of public sector workers is not enough.

According to him, any salary increase must much the current inflation rate.

Ghana’s inflation rate as of November was 12.2 percent and for most of 2021, the rate was above 9 percent.

Speaking in an interview on Joy FM, Kwabena Donkor said: “the minimum we can do, is to relate public sector salary adjustment to the rate of inflation. The Statistical Service has given us the annual rate of inflation which is in the double figures. And we have a salary adjustment that is in single digits."

He said the 7 percent increase which was below the annual inflation rate would lead to a reduction in the worker's ability to buy goods and services.

“What it really means is that the purchasing power of the public sector worker has reduced. My idea is to match the public sector salary adjustment to the rate of inflation. So that at least, in terms of real purchasing power, at least they stay the same. They suffer no deterioration,” he said.

The former Minister for Power who is currently the Member of Parliament for the Pru East reiterated that there was a correlation between the rate of inflation and rate of salary increment; adding that the government failing to recognise this will make public sector workers less productive.
Source: www.ghanaweb.com
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