Spending cuts delaying benefits of economic stability – Bokpin

Economics professor Godfred Alufar Bokpin says Ghana’s reliance on spending cuts to stabilise the economy is delaying the benefits Ghanaians expect from improving economic indicators.

Speaking on JoyNews’ PM Express on Tuesday, he said the government had made progress. But its approach was squeezing demand while leaving infrastructure constraints unresolved.

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

Prof Bokpin said the 2026 Budget remained heavily focused on fiscal consolidation, with expenditure cuts central to the effort. This followed a similar approach in 2025.

He warned that a country with major infrastructure gaps needed spending to unlock 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.”

His comments come ahead of the 2027 Budget, scheduled for presentation on Thursday, November 12. The government says its proposed New Economy programme will shift attention to investment, production and jobs.

The Minority in Parliament has questioned how government will finance the proposed $10 billion programme. It is demanding a detailed funding plan and accountability for earlier commitments under the 24-Hour Economy initiative.

For Prof Bokpin, the challenge is how stabilisation translates into daily relief.

“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 used difficult journeys between Accra and Kumasi to illustrate the gap between economic figures and lived experience.

“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 policy approach explained why improvements would take time to reach households.

“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 his concerns, Prof Bokpin credited government with progress on inflation, interest rates and currency stability.

He said restoring macroeconomic stability was the administration’s stated objective for its first two years. The approach also aligned with the IMF’s stabilisation programme.

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