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

Economics professor Godfred Alufar Bokpin says Ghanaians will have to wait to feel the benefits of economic stability because the recovery has relied heavily on government spending cuts.

Speaking on Joy News’ PM Express on Tuesday, he said the government had made progress. But the approach had squeezed demand while leaving infrastructure constraints unresolved.

“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.”

His assessment comes ahead of the 2027 Budget, scheduled for presentation on Thursday, November 12. Government says it will introduce a four-year New Economy programme centred on investment in productive sectors.

The Minority in Parliament has questioned how the proposed US$10 billion programme will be financed. Led by Dr Mohammed Amin Adam, it has demanded a detailed funding plan. It also cited shortfalls in capital spending and questioned funding secured for the existing 24-Hour Economy initiative.

Prof Bokpin said lower inflation alone could not capture the difficulties people face daily.

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

He explained that spending cuts could bring inflation down by reducing demand. But that approach did not expand the economy’s constrained capacity to produce.

“If you choose that approach, you will get the result, but the impact will not be felt by Ghanaians.”

For a country with a huge infrastructure deficit, he argued, prolonged spending restraint carried a cost. Government investment remained necessary to address constraints holding back growth.

“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.”

Despite those concerns, Prof Bokpin credited the government with largely delivering on its initial stabilisation objective.

He pointed to falling inflation and interest rates. He also said the cedi was holding its own against major trading currencies despite renewed pressure.

The government, he noted, had set aside 2025 and 2026 to restore macroeconomic stability. Spending cuts featured heavily in both years.

“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 said that progress explained the government’s proposed move towards economic transformation through the New Economy agenda.