Economist Professor, Godfred Alufar Bokpin has suggested that Ghana's economy will witness notable growth in 2024 due to election-related activities.

Prof. Bokpin explained that the elections would lead to increased usage of hospitality services, particularly hotels and car rentals, injecting more liquidity into the economy and providing relief to Ghanaians.

In an exclusive interview with the Ghana News Agency reflecting on the 2023 fiscal year and the country's economic outlook for the coming year, he emphasized the importance of policies aimed at enhancing productivity and stability.

The economist highlighted the positive impact of election-year spending by politicians on businesses such as car rentals and the hotel industry.

However, he cautioned the government to implement measures preventing inflation from rising due to increased liquidity from political expenditures.

“There’s some good news next year because it’s an election year; politicians are going to spend, including travels across all the regions, and that in itself, would inject some liquidity into the system,” he stated.

“This means that there are some related businesses that will also pick up next year – car rentals and the hotel industry, and some Ghanaians whose lifestyles are indexed to political activities, this will be their harvest season,” he noted.

While acknowledging potential benefits for some Ghanaians, Prof. Bokpin advised caution, as excessive liquidity without a corresponding rise in production could lead to inflation.

Looking ahead, he predicted a reduction in external funds flowing into the country from the second half of 2024, potentially putting pressure on the Ghanaian Cedi. Prof. Bokpin explained that investors tend to adopt a "wait and see" approach during election periods.

“That pickup can benefit some Ghanaians, but we should be mindful that the same situation could cause inflation to go up, because there may be a lot more liquidity injection without a corresponding increase in production,” Prof Bokpin said.

He urged Ghanaians to moderate their growth expectations for 2024, emphasizing that challenges still exist and a sustained recovery requires careful management.

Regarding the government, Prof. Bokpin called for expeditious agreements with bilateral and commercial creditors for the second tranche of the $600 million loan from the International Monetary Fund (IMF) and the syndicated cocoa loan.

He emphasized that such agreements would mitigate economic uncertainty, support the Cedi, and maintain overall economic stability.

“The election fever begins from the second half of the year as experienced in all previous competitive elections, and many investors would not like to bring their funds into the country, but adopt the attitude of wait and see.

“We should be moderate with our expectations because we’re not entirely out of the woods and there’s still some considerable price that we have to pay to sustain the recovery.We need to conclude doing so, in addition to the syndicated cocoa loan,” the economist explained.