Economic stability will take time to reflect in Ghanaians’ lives – Bokpin

Economics professor Godfred Alufar Bokpin has explained that Ghanaians will need to wait for the full effects of economic stability. In an interview on Joy News’ PM Express, he noted that the government's focus on spending cuts had been instrumental in achieving macroeconomic stability. However, he emphasized that this approach had also squeezed demand and left infrastructure issues unresolved.

Bokpin acknowledged the government’s progress in lowering inflation and interest rates, as well as maintaining a stable cedi against major trading currencies. He also highlighted the proposed four-year New Economy programme, which aims to invest in productive sectors. The Minority in Parliament has raised concerns about financing this US$10 billion initiative and questioned the lack of detail in the proposed funding plan.

They also cited shortfalls in capital spending and queried the funding allocated for the existing 24-Hour Economy initiative. Bokpin explained that lowering inflation might not fully capture the daily hardships faced by Ghanaians. For instance, a 5.2% inflation rate may seem insignificant if someone spends nine to 12 hours travelling to Kumasi.

He stressed that spending cuts could reduce inflation but would not expand the economy's constrained capacity to produce. Given the country's significant infrastructure deficit, prolonged spending restraint comes with costs. Investment remains crucial to address these constraints. Despite these concerns, Bokpin praised the government for largely achieving its initial stabilisation objectives.

He pointed to the success of falling inflation and interest rates, as well as the cedi's resilience against major trading currencies. He noted that the government had dedicated 2025 and 2026 to restoring macroeconomic stability, with spending cuts central to both years. Bokpin concluded that the government's move towards economic transformation through the New Economy agenda is a positive step forward.