Ghana’s economy will grow during election year – Prof Bokpin

Economist Professor Godfred Alufar Bokpin has projected a notable growth in Ghana’s economy in 2024, attributing it to election-related activities. In an exclusive interview with the Ghana News Agency, Prof Bokpin emphasized that the elections would spur increased patronage of hospitality services, particularly hotels and car rentals, injecting liquidity into the economy and offering relief to Ghanaians.

Highlighting the positive impact of political spending, he anticipated growth in businesses related to election activities, such as car rentals and the hotel industry. For individuals whose lifestyles are closely tied to political events, he referred to the election year as their “harvest season.”

However, Prof Bokpin urged the government to implement measures to prevent inflation from surging due to the influx of liquidity resulting from political and election-related expenditures. While acknowledging the potential benefits for some Ghanaians, he cautioned against an imbalance where increased liquidity doesn’t align with a corresponding rise in production.

Looking ahead to the second half of 2024, Prof Bokpin predicted a decline in external funds flowing into the country, exerting pressure on the Ghanaian Cedi. He attributed this trend to the onset of election fever, which historically prompts investors to adopt a cautious “wait and see” approach.

Managing expectations, the economist advised Ghanaians to be moderate in their growth expectations for 2024, emphasizing that challenges persist, and sustained recovery requires careful navigation.

In addressing the economic landscape, Prof Bokpin urged the government to expedite agreements with bilateral and commercial creditors, specifically for the second tranche of the US $600 million loan from the International Monetary Fund (IMF). Emphasizing the importance of reaching agreements, he suggested that this step, along with the syndicated cocoa loan, would help mitigate uncertainty, safeguard the Cedi from cumulative pressures, particularly against the Dollar, and maintain economic stability.