Ghana cuts salaries of appointees by 30% to mitigate economic hardship

The Ghanaian government has announced a 30 percent salary cut for its appointees to mitigate economic hardship in the country.

The presidency disclosed this on Twitter on Wednesday, adding that all measures have been approved by Ghanaian President Nana Akufo-Addo.

MEASURES TO MITIGATE HARDSHIPS IN THE ECONOMY.#BouncingBackTogether#BuildingGhanaTogether pic.twitter.com/DDICjqxj2o

— Ghana Presidency (@GhanaPresidency) March 23, 2022

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Other measures include the reopening of land borders in two weeks.

They have remained shut since the start of the COVID-19 pandemic in 2020.

Ghana’s central bank also raised the policy rate by 250 basis points to 17 percent; this means the cost of borrowing will shoot up.

Additionally, the government is going to pump $2 billion into the economy to help stabilise the cedi (Ghana’s currency) which has been falling in value to the dollar and other international currencies of trade for the past few months.

While addressing journalists at a media briefing on Thursday, Ken Ofori-Atta, Ghana’s finance minister, also announced a 50% cut in fuel coupon allocations for all political appointees and heads of government institutions, including state-owned enterprises (SOEs), effective April 1, 2022.

“Discretionary spending is to be further cut by an additional 10%. The ministry of finance is currently meeting with MDAs to review their spending plans for the rest of the three (3) quarters to achieve the discretionary expenditure cuts,” he said.

Ofori-Atta said the government has also imposed a complete moratorium on the purchase of imported vehicles for the rest of the year with immediate effect, adding that this affects all new orders, especially 4-wheel drives.

“Government has imposed a moratorium on all foreign travels, except pre-approved critical/statutory travels,” he added.

“Government will conclude on-going measures to eliminate “ghost” workers from the Government payroll by end December 2022;

“Government will conclude the renegotiation of the Energy Sector IPPs capacity charges by end of Q3-2022 to further reduce excess capacity payments by 20% to generate a total savings of GHS1.5 billion;

“Impose a moratorium on the establishment of new public sector institutions by the end of April 2022.

“Prioritise ongoing public projects over new projects to enhance the efficient use of limited public funds over the period by finishing ongoing or stalled but approved projects.

“Reduce expenditure on all meetings and conferences by 50%, effective immediately.

“Finally, Cabinet approved that Ministers and the Heads of SOEs to contribute 30 percent of their salaries from April to December 2022 to the Consolidated Fund.”

On rising fuel prices, the finance minister said the government is committed to reducing margins in the petroleum price build-up by a total of 15 pesewas per litre with effect from April 1st.

The reductions, he said, are expected to reduce the prices of petrol by 1.6% and diesel by 1.4%.