Lower inflation means little when Ghanaians still struggle – Economist

Economist and Professor of Finance at the University of Ghana, Godfred Alufar Bokpin, has questioned the impact of Ghana’s improving economic indicators on ordinary citizens, arguing that declining inflation means little when people continue to struggle with poor roads and other everyday challenges.

Speaking on Joy News, Professor Bokpin said the government's efforts to stabilise the economy must translate into tangible improvements in the living conditions of Ghanaians.

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

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He also raised concerns about traffic congestion on the Accra-Tema Motorway, noting that such challenges make it difficult for people to appreciate the benefits of declining inflation.

According to him, although the government has made progress in reducing inflation and interest rates, its approach has focused heavily on cutting public expenditure rather than investing in activities that could boost productivity and create jobs.

Professor Bokpin explained that reducing government spending could help stabilise the economy, but the benefits might take longer to reach households if the country's productive capacity remained weak.

He argued that Ghana continued to face significant infrastructure deficits that required investment, warning that excessive expenditure cuts could undermine economic 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,” he said.

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Despite his concerns, Professor Bokpin acknowledged that the government had made progress in restoring economic stability, particularly through declining inflation, lower interest rates and the relative stability of the cedi.

His comments come ahead of the presentation of the 2027 Budget, during which Finance Minister Dr Cassiel Ato Forson is expected to outline measures under the government's proposed New Economy Programme, aimed at boosting investment, production and economic growth.

DR/MA

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