Professor of Finance and Economics at the University of Ghana, Godfred Bokpin, says the government exceeded expectations under the International Monetary Fund (IMF) programme through aggressive expenditure cuts, but warned that the gains may not be sustainable in the long term.

Speaking on Joy FM’s Super Morning Show on Thursday, May 21, Prof Bokpin said the government’s fiscal approach in 2025 marked a major shift from previous IMF-backed programmes, which relied heavily on tax increases and revenue generation.

“Government, we over-impressed the IMF in 2025,” he said.

According to him, earlier IMF-supported programmes placed more emphasis on raising revenue through taxes rather than reducing expenditure.

“The fiscal adjustments tend to be heavy on the side of revenue versus expenditure rationalisation or expenditure cuts,” he explained.

Prof Bokpin said that the current government changed direction by focusing more on expenditure-based fiscal consolidation.

“What the government did in 2025 was to switch the fiscal calibration from revenue-based to expenditure-based,” he said.

He added that the move led to significant cuts in government spending, which helped Ghana achieve better-than-expected fiscal outcomes.

“The government had indicated that they were going to do a primary surplus of 1.5%. Government ended up doing a primary balance of 2.6%, 1.1% of GDP more than they said they were going to do,” he stated.

Prof Bokpin said the achievement came at a cost, including reduced infrastructure spending and delayed development projects.

“That will come with huge expenditure cuts, foregone infrastructure spending, foregone development, and bear that in mind,” he cautioned.

He also commended the government for what he described as “renewed leadership in terms of expenditure discipline” and praised the recalibration of the fiscal strategy beginning in 2025.

However, Prof Bokpin warned that the current gains in inflation reduction may not last because the underlying structure of the economy remains weak.

“It will come back to bite you because you cannot sustain that level of gains with those kind of approach,” he warned.

Although inflation has dropped sharply, he said that the measures used to bring it down did not fundamentally transform the economy.

“The structure of our economy currently cannot and will not be able to support low inflation for long at 3.2% or 3.4% or so, because the measures we adopted in bringing inflation down did not alter the structure of the economy,” he said.

Prof Bokpin further explained that once the government begins to ease the strict expenditure controls, some of the economic gains could reverse.

“So once you exit, you unwind. When you unwind, you begin to see how the economy itself would also reverse,” he added.