Ghana’s economic landscape continues to face challenges, particularly regarding fiscal responsibility, debt management, and currency stabilization.
As President John Mahama reaffirmed the need to stabilize the Ghanaian cedi and ensure prudent economic management, leading economists have weighed in on the feasibility of these goals.
Among them is Professor Godfred Bokpin, an economist and professor of finance at the University of Ghana Business School, who shared his perspective on these critical economic issues.
Prof. Bokpin expressed concern that Ghana has historically focused more on diagnosing economic problems rather than implementing effective solutions.
“I think, to a large extent, we are still on the path of talking the talk. Building on what we have heard in the last couple of decades and all of that. I think, my considered view is that, the president’s second coming, we will now walk the talk.’’
Professor Godfred Bokpin Professor of Finance at the University of Ghana Business School
According to Prof. Bokpin, Mahama’s government must ensure that its economic interventions are successfully rolled out, particularly when the first major budget of 2025 is introduced.
One of the key economic proposals that stood out to Prof. Bokpin was the establishment of an independent Value-for-Money Office.
“There was something the president said that moved me. The independent Value-for-Money Office or committee. I think that will be very critical. But it’s not just about setting that up and packing that with party followers and all of that.’’
“I think we must be intentional about resourcing that committee or that office with the right people, with the right objectivity so that they can do the right analysis in terms of the value for money because that is where a lot of the waste will come from.”
Professor Godfred Bokpin Professor of Finance at the University of Ghana Business School
Prof. Bokpin highlighted inefficiencies in Ghana’s procurement processes, stating that a lack of competitive bidding has contributed to wasteful spending.
“Between 2012 and 2022, nearly 85% of all government big-ticket procurement did not go to competitive tendering. And a good number of that also did not come along with explanations why competitive tendering had to be sidestepped.”
Professor Godfred Bokpin Professor of Finance at the University of Ghana Business School
Furthermore, he pointed out that project cost overruns are a major drain on Ghana’s economy.
“If you look at project overrun costs, sometimes 200% of the original budget. If you continue on that path, you will be unique to expect a different outcome than what we have now.”
“If you look at our expenditure-to-GDP ratio and you compare that to Malaysia, Singapore, and the rest of them, you can see that we compare favorably to these countries. So we have spent relative to the size of our economy like these countries, but they have picked growth. They picked development, and we picked inflation.”
Professor Godfred Bokpin Professor of Finance at the University of Ghana Business School
He stressed that the efficiency of government spending is a crucial determinant of economic outcomes.
“The role that infrastructure plays in economic growth and development is not just in the spending but in the efficiency of that spending. It’s in the higher value for money that you are able to enlist from every cedi or dollar that you spend.”
Professor Godfred Bokpin Professor of Finance at the University of Ghana Business School
Strengthening Ghana’s Fiscal Responsibility
Prof. Bokpin commended President Mahama’s focus on strengthening the Fiscal Responsibility Act and introducing debt limit rules. However, he warned that these rules alone are insufficient if accounting mechanisms are not robust enough to ensure compliance. He cited Nigeria’s experience as an example of how such rules can be circumvented.
“Nigeria actually set it as low as 40% of GDP. But in the run-up to the 2023 crisis and all of that, when they were learning from Ghana, Nigeria was spending every cedi revenue or dollar revenue they generate on debt servicing because they employed all kinds of back-office arrangements with the central bank and ended up loading their debt stock as a way of bypassing the debt limit rule of 40% [which] was in their Act.”
“The Fiscal Responsibility Act had a fiscal deficit of 5% of GDP from 2018. But in order not to comply with that, we were reporting our fiscal deficit on power level—one deficit with the financial sector cleanup cost and the energy sector indebtedness and one without.”
Professor Godfred Bokpin Professor of Finance at the University of Ghana Business School
This selective reporting, he argued, led to a misleading picture of fiscal discipline.
“We chose the one without so that we would be able to comply with the 5% of GDP rule in the Fiscal Responsibility Act. But at the end of the day, the accounting treatment does not take away the effect of the overspending, which is just a matter of time, and it will show up.”
Professor Godfred Bokpin Professor of Finance at the University of Ghana Business School
Prof. Bokpin’s analysis paint a clear picture of Ghana’s economic challenges and the need for effective policy implementation.
While he acknowledged that President Mahama has identified key issues such as fiscal discipline, procurement inefficiencies, and the need for an independent oversight body, he stressed that Ghana’s historical problem has been implementation, not diagnosis.
For the country to achieve sustainable economic stability, the government must not only enact policies but also ensure accountability, efficiency, and transparency in public spending.
READ ALSO; Nana Aba Anamoah Attacks Okraku-Mantey
