Finance Minister Cassiel Ato Forson has disclosed that the government borrowed GH¢17 billion in 2025 to meet public sector wage obligations, highlighting the growing strain of compensation costs on the national budget.
Speaking at the Presidential Dialogue with Organised Labour on Tuesday (17 March), Forson explained that Ghana’s wage bill has outpaced available revenue, forcing the government to rely on borrowing to pay workers.
According to him, out of GHC183 billion in non-oil tax revenue recorded in 2025, statutory payments and debt servicing consumed a significant portion, leaving only GH¢61.9 billion available for compensation, goods and services, and capital expenditure. However, the total compensation bill stood at GH¢78.9 billion.
“Simply put, what was left was not enough to settle Ghana’s compensation bill. Government had to borrow GH¢17 billion to pay workers,” he said.
The Minister further revealed that compensation accounts for the largest share of government expenditure at 39%, compared to 32% for debt servicing and 29% for other obligations. This, he noted, has created a “crowding-out effect,” leaving minimal resources for development.
“Only 3% of expenditure goes into goods and services, while capital expenditure is just 6%,” he added, warning that the trend could derail economic progress if left unchecked.
Dr. Forson also pointed out that Ghana’s compensation-to-tax revenue ratio stands at 44%, significantly above the 35% threshold set by ECOWAS convergence criteria.
He stressed the need for urgent reforms to ensure fiscal sustainability while maintaining fair remuneration for public sector workers.
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