Interest, wages and statutory transfers leave nothing for capital spending – Theo Acheampong

Economist and political risk specialist Dr Theo Acheampong says interest payments, public sector wages, and statutory transfers leave Ghana’s budget with nothing for capital spending.

Speaking on Joy News’ PM Express on Monday, he said these spending commitments expose the budget's rigidities. He called for a broader discussion about the wage bill and productivity.

“There's actually nothing left to pay for capital expenditure,” he said.

His assessment covered interest payments, employee compensation and transfers to funds such as the District Assemblies Common Fund and National Health Insurance.

Dr Acheampong said the wage bill must be examined over time. Rising expenditure figures alone do not tell the full story.

Using data stretching back to 2008, he said wages had accounted for between 25 per cent and about 35 to 36 per cent of total expenditure. The trend average was around 30 per cent.

He cited employee compensation of about GH¢79 billion last year, out of total expenditure of roughly GH¢233.8 billion.

Although the amount increases each year, he said its share of total spending had remained relatively flat. Ghana’s wage bill nevertheless stood out against those of comparable countries.

“But when you compare Ghana's wage bill to some of our peers, even within the subregion, you can see that the wage bill is quite extraordinarily high.”

He said the discussion must connect the size of the wage bill to productivity across both the public and private sectors.

Dr Acheampong also pointed to the government’s stated emphasis on growth, productivity and jobs in the 2027 budget. He said the aim was to create quality employment that could support sustainable wages.

For workers, he argued, lasting improvements in living standards would require more than salary increases. Fair wages must come alongside stable prices, a stronger economy, reliable public services and more employment opportunities.

“If you can get all these things working right, and things are stable, even if you offer workers 5% in a stable environment, is always going to be better than offering them 30% when you have runaway inflation.”