Professor Godfred Bokpin of the University of Ghana Business School has credited the recent appreciation of the Ghanaian cedi against major foreign currencies to significant expenditure cuts by the current government.
Speaking on TV3’s KeyPoints on May 24, Prof. Bokpin highlighted the contrasting fiscal approach of the National Democratic Congress (NDC) government compared to its predecessor.
He pointed out that, within just five months, the new administration has slashed spending by GHC10 billion compared to 2024.
“If you look at what the economy has been through in the last 3 years, the excess injection of liquidity into the economy through high expenditure. We have seen this government do within five months what we have been calling for since COVID-19 (2020–2025). Since COVID, we’ve been saying that we need to cut wasteful spending, so that we choose a gradual fiscal consolidation that will be less painful, we didn’t do that,” he said.
His comments came during a discussion on the factors behind the cedi’s recent strengthening against foreign currencies, particularly the US dollar.
While government officials have linked the currency’s performance to new policy interventions, some leaders of the New Patriotic Party (NPP) argue the gains are the result of initiatives implemented during their time in office. They contend that the NDC administration has not been in power long enough to claim credit.
However, Prof. Bokpin insisted that the appreciation of the cedi reflects the positive outcomes of leadership and policy coordination between key economic actors.
“You can see leadership here from the highest level. You can see painful choices that are manifesting in what we are seeing,” he noted, praising the collaborative efforts of Finance Minister Dr. Cassiel Ato Forson and Bank of Ghana Governor Dr. Johnson Asiama.
He went on to explain that prior missteps had worsened economic conditions. “To make matters worse, in 2022, the Bank of Ghana moved in strongly with excess liquidity that created inflationary pressures that pushed over 800,000 into poverty,” he said.
Touching on the performance under the 2024 IMF programme, Prof. Bokpin pointed out that nearly all targets were missed—with the exception of GDP growth and international reserves.
“When it comes to the main anchor for fiscal consolidation, we missed it. We were supposed to do 0.5% of GDP on primary surplus, but we did a negative of more than 3%. So, they have used the 2025 budget to more or less correct some of these imbalances. To the extent that they have had to restore the IMF programme back on track by moving from a negative surplus of more than 3% of GDP to a primary balance-positive of 1.5% of GDP,” he explained.
Prof. Bokpin acknowledged that these corrections come with trade-offs. “What that means is that we’ve done this but there is a trade-off—growth projection was lower than the fiscal outturn in 2024. So, to a large extent, government is not spending as we have seen in the last couple of years. In nominal terms, we shrunk expenditure by GHC10 billion compared to 2024. So, in a layman’s terms, the economy was overheating, they had to cool it down,” he concluded.
His remarks reinforce the growing view that the cedi’s rebound is a product of tough but necessary economic decisions, anchored in discipline and coordinated leadership.
