2023 Salary Increase Won’t Be Paid In January

4 Reasons 2023 Salary Increase Won’t Take Effect In January

Our team, which is vested in governance issues in the country, has been keenly following issues regarding the 2023 salary increase and have compiled four (4) major reasons why any salary increase will not take effect in January 2023 salary payments. Though governments can pull any surprises at anytime depending on how they perceive the overall situation in the country, our team is able to predict accurately the majority of government decisions. An example is when we predicted that the Cost of Living Allowance (COLA) would be taxed despite the history of non-taxation of the previous COLA paid.

Our team, therefore, expect readers to look out for the merits of our observation and take caution against an expectation of an enhanced salary payment in the weeks ahead for the January 2023 salary increase.

Why 2023 salary increase will not be paid in January

1. Firstly, the major task confronting the government currently is how to bring the high inflation regime in the country down to manageable levels. The current inflation trends, which is currently at 50.3%, is a major concern to the government and any opportunity to limit the available money circulating in the economy will be seized. Paying any salary increase in January means pushing extra money into the economy, which will end up chasing the existing goods and further cause inflation. The government will therefore try as much as possible to avoid such a scenario.

2. Secondly, the losing rebound of the Ghana cedi against major foreign currencies means the government would like to prevent the earlier skyrocketing of the exchange rates. Ghanaians who are mostly noted for consuming foreign goods will definitely continue the trend when salary increases are paid. This will imply that the government will give local currencies to public sector workers to chase foreign currencies indirectly through their consumption.

3. Also, the default of the government to pay foreign investors means the government must find ways to appease the disgruntled foreign investors that they are not defaulting to pay a 2023 salary increase.

See also: 2023 Salary Negotiations As At January 2023

4. Finally, the collapse of the domestic debt restructuring program means governments must struggle with other options to achieve the same results. Labour Unions managed to stop the government from using their pension funds to recalibrate the economy. Clearly, the government will have to find a way to buy time by not paying a 2023 salary increase.

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