Ghana cannot celebrate austerity amid huge infrastructure deficit – Bokpin
Economics Professor Godfred Alufar Bokpin says Ghana cannot celebrate spending cuts while a huge infrastructure deficit continues to hold back growth and burden citizens.
Economist Prof Godfred Alufar Bokpin argues Ghana cannot celebrate spending cuts while grappling with a significant infrastructure deficit that impedes growth and adds to citizens' burden. While acknowledging the government's progress in stabilizing the economy, he warns that heavy reliance on expenditure cuts would delay benefits for ordinary Ghanaians.
"For a country that is saddled with a huge infrastructure deficit, imposing restrictions on the growth drivers of the economy, such a country cannot celebrate extensive austerity expenditure cuts," he stated.
Bokpin's remarks come ahead of Finance Minister Dr Cassiel Ato Forson's presentation of the 2027 Budget on November 12. The government plans to unveil a four-year New Economy programme, investing in productive sectors to transition Ghana from stabilization to transformation. The opposition in Parliament has questioned how this plan will be financed and has challenged the link between improving economic indicators and household living conditions.
Prof Bokpin explains that the 2026 Budget, like its predecessor, relied heavily on spending restraint to restore stability. He clarifies that this approach reduced demand to bring down inflation without addressing the economy's limited production capacity. "You cool the economy. You are shrinking aggregate demand as a way of also bringing inflation down, rather than expanding the economy's severe or restricted supply capacity," he argues.
This leads to a gap between lower inflation and commuters' daily frustrations, such as spending 9-12 hours to travel from Accra to Kumasi. For those enduring lengthy commutes, better economic figures offer little immediate comfort.
Despite this, Prof Bokpin credits the government for achieving much of its initial stabilisation agenda. He cites falling inflation, interest rates, and a relatively resilient cedi, despite pressure, as successes. He notes that the administration set 2025 and 2026 as years to restore stability, in line with the IMF-supported programme.
"To that extent, and to the extent that that is what we are set out to achieve in the first two years of the administration, I would say they've done quite well in restoring macroeconomic stability," he concludes.
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