Finance Minister Dr Cassiel Ato Forson has revealed that compensation for public sector workers constitutes the single largest portion of government spending, accounting for 39% of total expenditure and exerting considerable pressure on other priority areas.
The disclosure was made during a high-level dialogue with Organised Labour at the Jubilee House in Accra on Tuesday, March 17, as part of continued engagements between government and labour unions.
“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%,” Dr. Forson stated.
He highlighted the significant “crowding-out effect” caused by the high wage bill, which limits resources available for goods and services, capital projects, and social interventions.
“The crowding effect of compensation means that while we spend 33% of our compensation budget, our expenditure on compensation, only three per cent is used for goods and services, and capital expenditure represents only six per cent of Ghana’s expenditure,” he explained.
“Social benefits only represent one per cent of government expenditure, and grants to other government units representing the statutory funds are about 24% while debt service represents 26% of our total expenditure,” the Finance Minister added.
Dr. Forson provided further context on the scale of the compensation burden within Ghana’s fiscal framework, drawing on end-of-2025 figures.
“Some key facts on the compensation issues are that at the end of the 2025 fiscal year, compensation budget accounted for 44% of non-oil tax revenue, 5.6% of GDP, and 33.78% of total expenditure,” he noted.