We need government to spend to stimulate growth – Bokpin

Economics Professor Godfred Alufar Bokpin has urged the government to spend to stimulate growth, warning that cuts to expenditure are delaying the benefits of economic stability for Ghanaians.

Speaking on JoyNews’ PM Express on Tuesday, he acknowledged improvements in key economic indicators. But he said Ghana’s infrastructure deficit required investment to remove barriers to growth.

“We need government to spend to stimulate growth,” he said.

His call comes ahead of Finance Minister Dr Cassiel Ato Forson’s presentation of the 2027 Budget on Thursday, November 12. The government plans to unveil a four-year New Economy programme focused on investment in productive sectors.

The Minority in Parliament has questioned how the programme will be financed. It wants the government to account for existing flagship initiatives, including the 24-Hour Economy, before introducing fresh commitments.

Prof Bokpin said the government’s stabilisation approach had relied heavily on spending cuts in both 2025 and 2026. He argued that approach carried consequences for households and businesses.

“So, 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 explained that cutting expenditure could lower inflation by weakening demand. However, it would not necessarily expand the economy’s limited capacity to produce.

“You are shrinking aggregate demand as a way of also bringing inflation down, rather than expanding the economy's severe or restricted supply capacity.”

For him, that distinction explains why improved economic figures may offer little comfort to people facing poor roads and lengthy journeys.

“If somebody is spending nine to 12 hours to travel from here to Kumasi, inflation of 5.2% means nothing to that person.”

He said the benefits of the current approach would take time to reach Ghanaians.

“It's simply because the approach we have adopted in restoring macroeconomic stability is going to take a while to reflect in the lives of Ghanaians.”

Despite those concerns, Prof Bokpin credited the government with making progress towards its stated two-year stabilisation objective.

He cited falling inflation and interest rates, alongside a currency that remained relatively resilient despite renewed pressure.

“I would say they've done quite well in restoring macroeconomic stability,” he added.

He said the government’s proposed New Economy reflected its intention to move from stabilisation towards economic transformation.