Economics Professor Godfred Bokpin says the government must spend to stimulate growth.
Prof. Bokpin warned ahead of Thursday's 2027 Budget presentation, arguing that prolonged austerity is delaying the real-world benefits of macroeconomic stability for ordinary Ghanaians.
Speaking ahead of Finance Minister Dr Cassiel Ato Forson's presentation of the New Economy roadmap on November 12, Bokpin acknowledged that inflation and interest rates have fallen sharply but warned that fiscal cuts cannot build roads or bridges.
Austerity Shrinks Demand Without Fixing Supply
Bokpin pointed out that the government's stabilization policy relied heavily on deep spending cuts throughout 2025 and 2026. While suppressing public expenditure lowers inflation by crushing consumer demand, it fails to fix underlying productive bottlenecks.
"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." - Prof. Bokpin
He noted that aggregate demand cuts do not expand Ghana's restricted supply capacity, leaving basic logistical problems unresolved across the country.
"If somebody is spending nine to 12 hours to travel from here to Kumasi, inflation of 5.2% means nothing to that person," Prof. Bokpin stated.
Macro Success Needs Physical Investment
Prof. Bokpin gave the government credit for meeting its two-year stabilization goals, pointing to falling interest rates and a relatively resilient cedi as genuine achievements.
"I would say they've done quite well in restoring macroeconomic stability," Prof. Bokpin conceded, noting that the proposed New Economy programme reflects a logical shift toward structural transformation.
However, with the minority in Parliament questioning how the upcoming four-year plan will be financed, Bokpin stressed that capital must flow directly into growth-generating infrastructure to turn statistical progress into tangible living standards.
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