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Renowned economist, Prof. Godfred Alufar Bokpin, has disclosed that the recent strengthening of the Ghanaian cedi is not a temporary blip, but rather the result of deliberate and coordinated policy efforts by the government and the Bank of Ghana.
Speaking on Joy News’ Newsfile, as monitored by Elvisanokyenews.net, Prof. Bokpin explained that the rebound of the cedi is rooted in sound fiscal and monetary measures outlined in the 2025 national budget. He noted that the government’s clear intention to stabilize the economy is finally yielding tangible results
“It’s not a blip and again there are concerns about sustainability, there is a reason for what is happening, so it’s not purely accidental. From the 2025 budget, you could see that the government’s intention was to stabilize the economy, the economy was overheated.
“There were three things they announced in the budget, a shock therapy, expenditure-based fiscal consolidation, and a reduction in government spending, in nominal terms compared to 2024, total expenditure for 2025 went down in nominal terms by more than 10 billion.” He stated
Prof. Bokpin commended both the Finance Minister and the Governor of the Bank of Ghana for the close coordination and discipline shown in driving a unified economic agenda. He added that the Bank of Ghana has also played a vital role through tightened monetary policy, enhanced transparency, and aggressive liquidity sterilization measures. T
According to him, these measures, combined with increased inflows from gold, cocoa, and remittances, have created favorable market conditions for the cedi to strengthen.
“I want to commend the Minister of Finance and the Governor of Bank of Ghana, there’s coordination going on towards a common goal. From the monetary policy side, you can see the Governor in terms of the transparency.
“From the fiscal side, you can see fiscal discipline, you can see expenditure-based fiscal consolidation, so once government is not spending, there isn’t considerable injection of liquidity into the economy, and then you have the time, the favorable timing, in the sense that whilst from the fiscal side we are not spending, we are shrinking the expenditure, which is very good in terms of stabilizing the economy.” He said.
He continued, ”You also see that from the monetary point of view, there’s also tightening of monetary policy. There is also a doubling of effort in terms of sterilization, mopping up excess liquidity, so in terms of injection from the expenditure side is constrained, there’s also the morphing up of excess liquidity from Bank of Ghana point of view, then you’re also looking at the timing of inflows, uptake in terms of gold, cocoa, and then also remittances. If you look at all of these things, it looks like, okay, this is the time to move into the market and drag the rates.
But despite the technical wins, he sounded a strong caution. “There are concerns about sustainability. Yes, this rally is real, but can it hold?” He quizzed
Source: Elvisanokyenews.net
