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.

Speaking on Joy News’ PM Express on Tuesday, he acknowledged the government’s progress in stabilising the economy. But he warned that its heavy reliance on expenditure cuts would delay the 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.”

His comments come 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, with investments in productive sectors intended to move Ghana from stabilisation to transformation.

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 making fresh commitments.

It has also challenged the connection between improving economic indicators and household living conditions.

Prof Bokpin said the 2026 Budget, like its predecessor, relied heavily on spending restraint to restore stability. He explained that this approach reduced demand 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 argued the consequences were evident in the gap between lower inflation and commuters' daily frustrations.

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

For people enduring difficult journeys, better economic figures would offer little immediate comfort.

“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.”

Still, Prof Bokpin credited the government with delivering much of its initial stabilisation agenda. He cited falling inflation and interest rates, alongside a cedi that remained relatively resilient despite pressure.

He said the administration had set 2025 and 2026 as the years to restore stability. Its approach was also consistent 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 said.