Accra: Economist Godfred Bokpin has raised concerns over Ghana's aggressive fiscal consolidation strategy under the IMF-supported programme, suggesting it may have come at the expense of the nation's long-term economic growth and productivity.
According to Ghana Web, Prof Bokpin, speaking at the CEO Webinar Hub on July 31, 2026, noted that while the government has achieved faster-than-expected macroeconomic stability, this came with significant drawbacks. The approach led to substantial losses for public institutions and severe cuts in productive spending. 'The austerity was quite severe,' he stated, emphasizing the need for a balanced approach.
Prof Bokpin elaborated that the government pursued an expenditure-based fiscal consolidation strategy, paired with tight monetary policy, to achieve rapid macroeconomic stabilization. However, he cautioned that such measures could undermine the economy's long-term viability. He urged the government not to shy away from spending and investing in growth to ensure sustainable economic development.
He highlighted that the original IMF-supported programme, approved in 2023, aimed to restore debt sustainability by 2028. However, Ghana's government expedited this process by targeting a primary surplus of 1.5% of GDP by 2025. While this acceleration was celebrated, Prof Bokpin warned of the critical forgotten expenditures essential for alleviating growth constraints.
Prof Bokpin pointed out that government revenues did not grow as anticipated, leading authorities to rely heavily on expenditure cuts rather than additional borrowing. He noted that while compensation for public sector workers saw a 13% increase, spending on goods and services was slashed by over 47%. This imbalance, he argued, could hamper productivity despite maintaining salary payments.
He concluded that the original IMF programme's gradual approach would have allowed for essential investments while maintaining fiscal discipline. Prof Bokpin emphasized the importance of ensuring fiscal adjustments do not compromise the investments necessary for sustaining long-term economic growth in Ghana.