A Professor of Finance and Economics at the University of Ghana, Godfred Bokpin, has cautioned that Ghana’s recent improvement in international credit ratings is coming at a high cost to ordinary citizens.
His remarks follow the decision by Fitch Ratings to upgrade Ghana’s Long-Term Foreign-Currency Issuer Default Rating from B- to B with a Positive Outlook.
Fitch explained that the upgrade reflected a major reduction in public debt, stronger fiscal discipline, economic growth, appreciation of the cedi, and improved international reserves.
The agency also projected that Ghana’s public debt could decline further to 46 percent of GDP by 2027, placing the country below the average level for economies with similar ratings.
Prof. Bokpin said the development did not come as a surprise because government policies in recent years have largely focused on improving Ghana’s standing with investors and international rating agencies.
“We had expected this, so I am not surprised. In fact, as of October last year, Ghana had made significant progress on many of those rating indicators, if you look at the rating methodology,” he said.
According to him, the government has concentrated heavily on tightening spending and improving macroeconomic indicators as part of efforts to stabilise the economy and reduce debt levels.
Prof. Bokpin explained that previous administrations often focused more on increasing revenue while maintaining public spending.
However, he said the current approach relies mainly on cutting expenditure to achieve fiscal discipline, a strategy he described as expenditure-based fiscal consolidation.
He warned that although the policy may produce attractive economic data in the short term, many citizens continue to bear the burden of the sacrifices involved.
“When you switch to expenditure-based fiscal consolidation, in the immediate, your books may look good, and the numbers may look very appealing, but you have sacrificed so much,” he stated.
