Spending cuts delaying benefits of economic stability – Bokpin

Economics professor Godfred Alufar Bokpin asserts that Ghana's strategy of relying on spending cuts to stabilize the economy is hindering the anticipated benefits from enhanced economic indicators. In an interview on JoyNews’ PM Express, he highlighted the government's achievements thus far, but cautioned that the impact of such measures would not be immediately felt by ordinary Ghanaians.

Prof Bokpin noted that the 2026 Budget continued to emphasize fiscal consolidation, with expenditure cuts playing a central role. This approach mirrors the strategy employed in 2025. He cautioned that a nation grappling with significant infrastructure deficiencies cannot benefit from extensive austerity measures. "For a country that is heavily burdened with an infrastructure deficit, imposing restrictions on growth drivers of the economy, such as spending cuts, cannot result in the celebration of significant austerity expenditure cuts," he warned.

His remarks come prior to the presentation of the 2027 Budget on November 12. The government plans to introduce a New Economy programme, shifting focus towards investment, production, and job creation. However, opposition parties in Parliament have questioned how the government will fund the proposed $10 billion programme, demanding a detailed funding plan and accountability for earlier commitments under the 24-Hour Economy initiative.

Bokpin emphasized the challenge of translating economic stabilization into tangible benefits for citizens. He illustrated the disconnect between economic figures and lived experiences by recounting the lengthy travel times between Accra and Kumasi. "If somebody is spending nine to 12 hours to travel from here to Kumasi, a 5.2% inflation rate means nothing to that person," he pointed out.

He attributed the slow realization of improvements to households to the current policy approach, stating that the emphasis on restoring macroeconomic stability will take time to impact the daily lives of Ghanaians.

Despite his reservations, Bokpin acknowledged the government's progress on inflation, interest rates, and currency stability, crediting the administration with achieving its first two-year objective of restoring macroeconomic stability. This strategy aligns with the IMF's stabilization program, with Bokpin expressing that the government has done well in this regard.