LIVE: Parliament grills Barker-Vormawor over bribery allegation
Ghana govt spent 21.79% more on compensation and wages in Q2 of 2024
Ghana govt spent 21.79% more on compensation and wages in Q2 of 2024
By: Nii Ammui Fio | 3 mins read
The Ghanaian government’s expenditure on compensation for employees saw a significant rise of 21.79% in the second quarter of 2024, totaling GHC16,088,370,059.45, per data from the Ministry of Finance.
This increase marks a notable jump from the first quarter's spending of GHC13,209,784,023.58, with June recording the highest monthly expenditure at GHC5,391,601,682.37.
The quarterly rise reflects increased spending across all categories, including wages, social contributions, pensions, gratuities, and social security.
First Half of 2024 Overview
By mid-year, the government had spent a total of GHC29,298,154,083.03 on employee compensation, representing approximately 46% of the annual budget of GHC63,683,181,155.32 allocated for this category. The remaining budget for the second half of the year stands at around GHC34,385,027,072.29, suggesting that the government is on track to meet its budgetary targets if the current spending pattern continues.
Quarter 1 Analysis
In the first quarter, government expenditure on compensation was distributed as follows:
Wages & Salaries
A total of GHC11,534,065,763.63 was spent on wages and salaries. Monthly figures were as follows:
January: GHC3,712,948,968.84
February: GHC3,683,630,714.34 (a slight decrease from January)
March: GHC4,137,486,080.45 (an increase of 12.3% compared to February)
The rise in March signaled the start of increased spending that continued into the second quarter.
Social Contributions
The government allocated GHC1,675,718,259.95 for social contributions in Q1, with month-by-month spending as:
January: GHC520,565,612.22
February: GHC554,600,249.50
March: GHC600,552,398.23
A steady increase was observed each month, with March’s figure showing a 15.1% rise from February, indicating rising costs related to social contributions.
Pensions
Total pension expenditure for the first quarter was GHC568,631,678.81:
January: GHC150,744,208.84
February: GHC191,329,447.80 (up 26.9% from January)
March: GHC226,558,022.17 (up 18.4% from February)
The consistent month-over-month rise highlights the growing burden of pension payments on the government’s budget.
Gratuities
The expenditure on gratuities for Q1 amounted to GHC132,123,870.07, with fluctuations:
January: GHC45,186,098.79
February: GHC37,444,289.02 (a decline of 17.1% from January)
March: GHC49,493,482.26 (an increase of 32.1% from February)
While February saw a reduction, the March expenditure surge pushed the total back up.
Social Security
Expenditure on social security for the first three months was GHC974,962,711.07:
January: GHC324,635,304.59
February: GHC325,826,512.68 (a slight increase)
March: GHC324,500,893.80 (a marginal decrease from February)
The nearly stable spending on social security in Q1 shows that this component of compensation remained relatively steady.
Quarter 2 Analysis
The second quarter recorded an increase in overall spending to GHC16,088,370,059.45, with the following breakdown:
Wages & Salaries
Expenditure jumped to GHC14,744,184,584.66 in Q2, reflecting a significant rise from Q1:
April: GHC4,758,768,689.10 (up 15% from March)
May: GHC4,823,157,637.77 (a slight increase from April)
June: GHC5,162,258,257.79 (an increase of 7% from May)
This consistent rise in wages and salaries underscores the government’s expanding payroll commitments in the first half of 2024.
Social Contributions
The Q2 expenditure for social contributions was GHC1,344,185,474.79, showing a decrease from Q1:
April: GHC563,203,324.81
May: GHC551,638,725.40 (a slight decline of 2.1% from April)
June: GHC229,343,424.58 (a sharp 58.4% drop from May)
June’s substantial decline indicates a momentary easing in social contribution costs, which could reflect adjusted contribution rates or fewer obligations.
Pensions
Total pension spending in Q2 was GHC571,822,661.03, similar to Q1 levels:
April: GHC198,682,513.76 (a decrease from March)
May: GHC188,935,306.01 (down 4.9% from April)
June: GHC184,204,841.26 (down 2.5% from May)
The reduction over three months in Q2 may indicate an effort to stabilize pension payouts.
Gratuities
Q2 spending on gratuities was slightly lower at GHC126,241,837.04 compared to Q1:
April: GHC41,013,100.46
May: GHC40,090,153.26 (a slight decrease)
June: GHC45,138,583.32 (an 11.2% increase from May)
This pattern reveals variability in gratuity payments, likely dependent on the number of retirees or specific contractual obligations.
Social Security
Expenditure on social security in Q2 was GHC646,120,976.72:
April: GHC323,507,710.59
May: GHC322,613,266.13 (a minor drop from April)
June: No data provided
The slight reduction in social security spending in April and May suggests stable contributions, pending further data for June.
Overall Budget Outlook
The first-half spending indicates the government is maintaining fiscal discipline in employee compensation, with GHC29.3 billion already expended—46% of the total annual budget. Given the consistency in spending patterns across the two quarters, the government is well-positioned to remain within its GHC63.7 billion target for 2024, barring unexpected costs in the latter half of the year.
However, increased expenditure pressures—such as rising wages and fluctuating gratuities—highlight the need for close monitoring. Maintaining fiscal balance will be crucial to achieving the government’s broader target of GHC226 billion for the year, especially with the first-half total expenditure across all sectors already surpassing GHC101 billion.
