Achieving Higher GDP Growth Rates in Ghana: Which Sector is to Lead?
Emmanuel D K Havi2013
Sign up for access to the world's latest research
checkGet notified about relevant papers
checkSave papers to use in your research
checkJoin the discussion with peers
checkTrack your impact
Abstract
The study is on achieving higher GDP growth in Ghana: which sector is to lead. The main objective of this paper was to examine the contributions of the agricultural, service and industrial sectors to economic growth in Ghana. Time series data from 1966 to 2011 on all the variables of interest was obtained from the World Development Indicators 2012 series. The Ordinary Least Squares estimation technique was used for the analysis. The results showed that a 1% increase in the growth of the agricultural sector will cause GDP growth to increase by 0.452849%. Also, a 1% increase in the growth of the services sector will lead to 0.376308% increase in GDP growth. Finally, 1% increase in the growth of the industrial sector will bring 0.1827% increase in GDP growth. All the explanatory variables are statistically significant at the 5% level of significance. It is concluded that the agriculture sector contributed most to the overall growth. It is recommended that for Ghana to achieve higher GD...
Related papers
Analysis of the Agricultural Sector of Ghana and Its Economic Impact on Economic Growth
The research seeks to determine the impact of the agricultural sector on Ghana’s economic growth and the effect of the various sub- sectors of the agricultural sectors on Ghana’s economic growth. The study uses time series (1996-2006) data on agriculture, service, industry and the various sub-sectors under agriculture, which includes forestry, fishery, crops/ livestock and cocoa. A regression model was specified and OLS was employed to estimate the respective impact of agriculture, service and industry on GDP growth. At the end of the study agricultural output had a significantly positive impact on Ghana’s growth as compared to the other sectors (agricultural output (0.354515); service output (0.283401); industrial sector (0.303257)). In addition, the study further analysed the effect of the various sub sectors under agricultural sector in GDP growth since the agricultural sector contributed more significantly to GDP. At the end of the study cocoa sub-sector was identified to be vital to economic growth and development in Ghana. Hence, the cocoa sub-sector should continue to be priority position even with the discovery of oil.
Comparison of Growth of Overall GDP on Three Sectors of the Ghanaian Economy: A Time Series Analysis from 2001-2020
American Journal of Industrial and Business Management, 2021
The Ghanaian economy has been growing for the past three decades, but growth, redistribution, and sustainability have all faced obstacles. The economy has been largely grown in three major sectors of the economy i.e., Agriculture, Service and Industry after 64 years of independence. This article is a comprehensive discussion of the contribution of three sectors of the economy to the overall GDP, and it does cover all of the nitty-gritty intricacies of the Ghanaian economy. Finally, the paper seeks to provide some thoughts on the literature for readers on the state of the Ghanaian economy from 2001 to 2020, taking into account the contributions of three major economic sectors. The researcher based the dataset on the work of several researchers and included a significant quantity of fresh data from both primary and secondary data sources such as the Ministry of Finance (MOF), the Bank of Ghana, the Ghana Statistical Service, and the World Bank. The data were gathered from the website of the MOF, Bank of Ghana and the Ghana Statistical Service. The conclusions of the study found that there is a positive relationship between overall GDP (domestic and external) and growth in Ghana’s economy, and urge, among other things, that government debt borrowing be discouraged and tax reform initiatives be promoted. According to the findings, interest rates should be kept low enough to allow individuals and investors to borrow and invest while also allowing the economy to expand through industrialization, which will enhance the trade balance and economic growth by raising aggregate demand or income.
Part-II: Social Sciences and Humanities ACHIEVING HIGHER GDP GROWTH RATES IN GHANA: WHICH SECTOR IS TO LEAD
The study is on achieving higher GDP growth in Ghana: which sector is to lead. The main objective of this paper was to examine the contributions of the agricultural, service and industrial sectors to economic growth in Ghana. Time series data from 1966 to 2011 on all the variables of interest was obtained from the World Development Indicators 2012 series. The Ordinary Least Squares estimation technique was used for the analysis. The results showed that a 1% increase in the growth of the agricultural sector will cause GDP growth to increase by 0.452849%. Also, a 1% increase in the growth of the services sector will lead to 0.376308% increase in GDP growth. Finally, 1% increase in the growth of the industrial sector will bring 0.1827% increase in GDP growth. All the explanatory variables are statistically significant at the 5% level of significance. It is concluded that the agriculture sector contributed most to the overall growth. It is recommended that for Ghana to achieve higher GDP growth rate, she should activate/strengthen the agricultural sector to lead the growth in the Ghanaian economy.
ACHIEVING HIGHER GORWTH RATES IN GHANA: WHICH SECTOR TO LEAD?
The study is on achieving higher GDP growth in Ghana: which sector is to lead. The main objective of this paper was to examine the contributions of the agricultural, service and industrial sectors to economic growth in Ghana. Time series data from 1966 to 2011 on all the variables of interest was obtained from the World Development Indicators 2012 series. The Ordinary Least Squares estimation technique was used for the analysis. The results showed that a 1% increase in the growth of the agricultural sector will cause GDP growth to increase by 0.452849%. Also, a 1% increase in the growth of the services sector will lead to 0.376308% increase in GDP growth. Finally, 1% increase in the growth of the industrial sector will bring 0.1827% increase in GDP growth. All the explanatory variables are statistically significant at the 5% level of significance. It is concluded that the agriculture sector contributed most to the overall growth. It is recommended that for Ghana to achieve higher GDP growth rate, she should activate/strengthen the agricultural sector to lead the growth in the Ghanaian economy.
Factors Affecting Economic Growth in Ghana: Bases for a New USAID Approach to Economic Growth
USAID Results and Potential for Growth USAID's past efforts in TIP, TIRP and TIPCEE are analyzed in detail in the full report, responding to the question, "Is USAID getting anywhere?" The answer to this question is important in thinking about future USAID activities aimed at promoting economic growth. If USAID efforts in the past in Ghana in export and economic growth promotion have yielded little, there is scant reason, short of a total rethinking of the USAID approach, for expecting better in the future. Fortunately, the past USAID track record, though mixed, has promoted forward progress. Each of the three projects addressed a different, and evolving, development context. And each achieved significant results that helped Ghana move to a more advanced stage, requiring a different type of intervention. And through its past projects, USAID has experimented with various different sectors, looking for export engines. This is a sound approach, as Ghana would benefit from being able to export its abundant resources-low-cost labor and abundant land and natural resources-to countries with different endowments. TIP supported export horticulture along with non-traditional exports generally, as well as exports of tourism services. Much of TIRP focused on macro policy issues and government financesfinancial reform, improvements in tax and expenditure systems in the national government. The EBD portion promoted export horticulture, but also exports of handicrafts, wood and furniture, textiles and apparel, as well as tourism. TIPCEE narrowed the focus to the main chance-export horticulture-but its efforts in some promising areas were attenuated by the shift in project focus required by USAID 1-1/2 years into implementation. Both TIP and TIRP identified the relative lack of foreign investment in Ghana as a significant impediment to the pace of modernization, to technological progress, and to access to foreign markets. TIP NPA was conditioned on the creation and staffing, with help from the IFC/World Bank FIAS, of the Ghana Investment Promotion Council. TIRP attempted to strengthen GIPC, with few results to show for the effort. Thus, albeit with numerous failed experiments and dead ends, USAID has moved to support the most promising emerging export sectors. There is little doubt that Ghana is a more prosperous place, with far more developed systems and capabilities in relevant export sectors, particularly horticulture, than it had at the beginning or end of TIP or at the end of TIRP. Real progress has been made, big time. Nevertheless, the lack of up-to-date and reliable export statistics in the country is an important impediment to the country's insertion into the world economy. Its trade/GDP ratio has increased substantially over the last two decades, but Ghana still benefits too little from international trade. A more focused effort by the government to increase exports, based on much more up-to-date tracking of exports and foreign investment, is a critical component for achieving the goal of GPRS-II: reaching middle-income status by 2015. The Way Forward Ghana's GPRS-II is an important step forward for Ghana. Notably, there was a change in the name, from Ghana Poverty Reduction Strategy for GSPR-I, to the Growth and Poverty 6. Business management training for mid-level and senior agribusiness managers and entrepreneurs Essentially all of the difference in the growth rate from the 1990's average of 4.1%/year to the 2001-05 rate of 5.2% was due to growth in TFP. Some things in the policy environment clearly have improved.
AN EMPIRICAL EXAMINATION OF THE DETERMINANTS OF ECONOMIC GROWTH IN GHANA Samuel Yeboah Asuamah PhD Candidate at Business School, Accra Institute of Technology (AIT), Accra, Ghana, and a Senior Lecturer at the Business School, Sunyani Polytechnic
The study investigate the long run and the short run determinants of economic growth in Ghana for the period 1970-2011 using autoregressive distributed lag model to contribute to the body of knowledge in the area of macroeconomic determinants of economic growth. The variables are unit root in levels but attained stationarity in first differencing. The results produce evidence of statistically stable long run relationship and short run adjustment among the variables in the estimated model. More importantly, the results suggest that Ghanaian economy has benefited from trade liberalisation policy, expansionary fiscal policy, increases in prices of goods and services but not from investment and financial development, proxied by gross capital formation and money supply respectively. JEL classification: E44, E62, F11, F14, F43, F44, O47 The aim of the paper is to contribute to the body of knowledge in the area of economic growth by investigating the determinants of economic growth in Ghana, using autoregressive distributed lag model (ARDL) approach to cointegration over 1970-2011 period.
uIMPACT OF AGRICULTURAL SECTOR OUTPUT ON ECONOMIC PERFORMANCE OF NIGERIA (1986 – 2014
This research work investigates the contribution of the agricultural sector output to economic performance in Nigeria using the Solow-Swan growth model as the framework and time series data from 1986 to 2014 using macroeconomic time series variables of agricultural output, gross fixed capital formation and school enrollment and gross domestic product. Time series data were sourced from Central World Development Indicators (WDI), meanwhile, the study employed Ordinary Least Squares (OLS) econometric technique as the estimation method. In the study, it was found that the agricultural output has contributed positively and consistently to economic growth in Nigeria, reaffirming the sector’s importance in the economy. The major conclusion drawn is that agriculture is an engine of economic growth in Nigeria and efforts should be made to add value to the sector through increased investment. Thus, it is recommended that since agriculture has positive impact on the Nigerian economy, the government should see that a higher percentage of allocations are invested on agricultural sector so that the economy will keep on growing in an increasing rate.
Does Agricultural Sector Contribute to the Economic Growth in Case of Republic of Benin?
Journal of Social Economics Research, 2018
Every nation has his own resources contributing to the well-being of population and the creation of wealth. The sector that contributes in the country growth is not unique, but there are some who require a close look because they have large contribution in the economic growth such as agriculture sector. The determinants of a country economic growth are a lot but contribute differently to the growth. In this paper, we will discuss the extent of agricultural sector to the economic growth in Republic of Benin and how much it contributes. We will use time series data from 1970 to 2016 and co-integration method considering the order of integration. The results reveal that the GDP per capita, agricultural value added and the human development index have long-run relationship. In addition, an expansion of agricultural sector will have a significant impact on the economy in the long-run and ameliorate the living condition of population. Contribution/Originality: This study is one of very few studies which have investigated the relationship between agricultural sector and the economic growth in Republic of Benin. It gives the empirical answer to the extent of agricultural sector contribution in the economy of Republic of Benin.
Part-II: Social Sciences and Humanities WHICH MACRO FACTORS INFLUENCE AGRICULTURAL PRODUCTION IN GHANA?
This study identifies the macroeconomic factors which influence agricultural production in Ghana. The main purpose of the study is to find out the key macro factors that influence agricultural production in Ghana. The Cobb-Douglas production was employed and the Ordinary Least Squares estimation technique was used. Our dependent variable is agricultural output. The independent variables are labour force, inflation, real exchange rate and Real GDP per capita. We found that 1% increase in labour force caused agricultural production to decrease by 0.655946%. Also a 1% increase in inflation caused agricultural production to increase by 0.00459045%. In addition, a 1% increase in real exchange rate caused agricultural production to increase by 0.083949%. Finally, a 1% increase in real GDP per capita caused agricultural production to decrease by 1.05825%. Apart from inflation, labour force, real exchange rate and real GDP per capita were statistically significant. Therefore, the key macro ...
An Econometric Investigation of the Contribution of Major Sectors to Ethiopian Economic Growth: A Time Series Analysis
The Journal of Social Sciences Studies and Research Online ISSN: 2583-0457, 2023
The main objective of the study was to analyze the major sectors contribution to Ethiopian economic growth in the 1982-2021 in Ethiopia. Data were collected from World Development Index database data. A Stationarity test was performed before conducting the data analysis. The result from the unit root test indicated that both dependent and independent variables were stationary at level and a multiple linear regression model for data analysis was applied. The variables were the annual growth of agricultural sector, industrial sector and service sector annual growth. The results indicated that agriculture, industry, and services service sectors affected the growth level of Ethiopian economic statistically significantly at less than 5% significance level. The coefficient of the variable Agriculture is big and indicated that the main growth engine of the Ethiopian economy was the Agriculture.
Related topics
Related papers
Understanding Economic Growth in Ghana in Comparative Perspective
World Bank Policy Research Working Paper, 2019
Ghana has experienced a decade of solid and exceptionally high growth. Between 2005 and 2015, income nearly doubled. This paper analyzes the factors driving this impressive growth performance, using tools such as structural change decompositions and growth regressions. For the comparative perspective, the paper compares Ghana with its structural and aspirational peers. The paper finds that the contribution of structural change to growth has been limited and attributes this to labor that was freed up in agriculture not being absorbed by high-productivity sectors. Looking at factors that drove growth since 2000, financial development and infrastructure had the most important impacts. A benchmark analysis suggests that those areas should remain the policy focus over the longer term, but that near-term priority should be given to stabilization policies.
Statistical Analysis of Population and Economic Growth in Ghana
Journal of Actuarial Research, 2023
Purpose: The relationship between population and economic growth has been a subject of extensive research and debate for decades. Population of a country is driven by factors such as fertility rate, mortality rate and migration. Rapid population growth can strain resources, infrastructure, and social services, potentially hampering economic development. However, it can also create a demographic dividend when the working age population surpasses dependent age group, leading to increased productivity and economic growth. Methodology: The researchers performed statistical analysis on population and economic growth using Time Series. The study revealed that Ghana's age profile is much concentrated at the youthful age, which is also the most fertile part of the age distribution. Findings: The Percentage Change of Population (PCPOP), Per Capita Gross Domestic Product (PCGDP) and Exchange Rate (EXCR) are statistically significant. Also Population and the economic growth in Ghana are inversely proportional to each other. Unique contributor to theory, policy and practice: Furthermore, the future values of the population of the country is relatively high for the next ten years and there is a negative correlation between the population and economic growth hence the future population is likely to face poverty. Stakeholders and policy makers are to ensure that future policies are directed towards Entrepreneurship and Skills Training to enable income generation in the Country.
Determinants of economic growth in Ghana
Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.
Identifying key policy options for growth and gainful employment in Ghana
2018
Farm inputs subsidies have been a major component of agricultural sector policies in many developing countries, including Ghana. In this study, we examine the economy-wide impact of the fertiliser subsidy programme in Ghana with a focus on agricultural sector productivity, overall economic growth, employment, and welfare. We adopt a modified version of the standard PEP-1-t model. Our results suggest that the fertilizer subsidy programme improves GDP growth and sectoral productivity, notably, the main agricultural sub-sectors and the food industry. Specifically, compared to the business as usual scenario, the implementation of the fertilizer subsidy programme improves the productivity of the maize, sorghum and rice sub-sectors by about 8.3%, 4.5% and 3.8%, respectively, in 2017. These impacts are however about four-times, three-times and six-times higher in 2020 than their 2017 levels, respectively. Also, we observe important positive impacts on the value added of the food industry, ...
Long-Run Growth in Ghana: Determinants and Prospects
Policy Research Working Papers, 2014
ABSTRACT Ghana’s economic growth picked up in the early 2000s and has been exceptionally strong over the past few years, with price booms of its main commodity exports, gold and cocoa, and the initiation of commercial oil production in 2011. This paper examines recent econometric evidence on Ghana’s long-term growth and evaluates its sustainability. The empirical evidence surveyed finds that Ghana’s main growth drivers were investment, oil, and mineral rents, while government consumption acted as a growth retardant.Based on various scenarios for its determinants, per capita GDP growth rates are predicted to be between 3.5 and 4.5 percent for 2014 – 34. Nevertheless, the predictions are subject to considerable uncertainty associated with the expected trends and volatility of the drivers of growth, particularly to sustaining investment levels and external factors such as commodity prices and international capital flows. A growth decomposition exercise shows that Ghana’s past growth was led by capital accumulation, which will be difficult to sustain given the high current account deficits and the volatility of capital flows. Hence, a switch toward a productivity-based growth strategy, instead of the investment-led growth strategy of the past, is the only viable alternative to sustain the recent high growth rates. For that, Ghana needs focus on policies that enhance government effectiveness and public spending efficiency. To mitigate the risk of falling into the so-called growth traps like many other countries, Ghana must resolve its macroeconomic imbalances and resume the institutional reform to enhance the quality of institutions and make growth more inclusive.
THE RELATIONSHIP BETWEEN DOMESTIC AGRICULTURAL INVESTMENTS AND ECONOMIC GROWTH IN GHANA
Scientific Papers Series Management, Economic Engineering in Agriculture and Rural Development, 2023
We investigated the contribution to economic growth emerging from Ghana's investment intodomestic agriculture. To this effect, time series data spanning 1965 to 2020 was used. For data analysis, stationarity was achieved using Augmented Dicky-Fuller and Phillips-Perron test; the ARDL bounds approach adopted for cointegration; finally, the Error Correction Model and Granger causality test were used for determining the long-run and short-run causal effects. From the results, in both long-run and short-run, the nation's domestic agricultural investment was not a positive contributor to economic growth. Positive contribution to economic growth was from investment in other sectors (industrial and service sectors) and trade openness index. Moreover, government expenditure index contributed negativelyto economic growth. In the short-run, unidirectional causality was from economic growth to government expenditure index, other sector investments to economic growth, and economic growth to trade openness index. In this study, we strongly advocate for considerable government domestic investment into the agricultural sector besides other sector investments, and further relaxing trade policies since it is the only surety to achieving the government's twofold agenda of zero tolerance for hunger and poverty while simultaneously increasing agriculture's contribution to economic growth with partial dependence on donor funds.
AN EMPIRICAL EXAMINATION OF THE DETERMINANTS OF ECONOMIC GROWTH IN GHANA
The study investigate the long run and the short run determinants of economic growth in Ghana for the period 1970-2011 using autoregressive distributed lag model to contribute to the body of knowledge in the area of macroeconomic determinants of economic growth. The variables are unit root in levels but attained stationarity in first differencing. The results produce evidence of statistically stable long run relationship and short run adjustment among the variables in the estimated model. More importantly, the results suggest that Ghanaian economy has benefited from trade liberalisation policy, expansionary fiscal policy, increases in prices of goods and services but not from investment and financial development, proxied by gross capital formation and money supply respectively. JEL classification: E44, E62, F11, F14, F43, F44, O47 Keywords: Economic Growth, Long Run, Cointegration, Price, Investment, Trade Openness
THE IMPACT OF AGRICULTURAL SECTOR ON THE ECONOMIC GROWTH IN NIGERIA (2008-2017
This research work is to study the impact of agricultural sector on the economic growth of Nigeria between the year 2008 and 2017. The study employed the econometric approach of OLS which involved the use of regression analysis (multivariate). This will be used to examine the impact of Total Agricultural Output (TAO), Government Expenditure on Rural Healthcare (GERH), Government Expenditure on Rural Road Network (GERN) and Government Expenditure on Rural Electrification (GERE) on economic growth (Gross Domestic Product(GDP)).These independent variables were carefully selected to take along as many of such variables that will impact on economic growth of Nigeria. For instance, the popular saying that 'Health is wealth' is an understatement. Rather, 'health is everything including wealth'. The specific objectives of this study are to examine the impact of the above independent variables on the economic growth in Nigeria. Secondary data is used. The data was sought from appropriate agencies-Central bank of Nigeria (CBN) and National Bureau of Statistics (NBS). By theoretical framework, we intend to examine some existing theories that can be used to study the nexus between agricultural sector and economic growth and development. These theories are the Lewis theory of development, the Solow-Swan neoclassical growth, the Harrod-Domar growth model and the theory of balance growth. The findings will be used to make recommendations to policy makers. It will also be added to the existing body of knowledge on the topic.
Role of Agriculture in Economic Growth & Development: Nigeria Perspective
The study explored empirically the role of agriculture in development of Nigeria between 1981 and 2012. The study is borne out of the curiosity to examine the role agriculture plays in the development of a nation having being neglected in this part of the world over a considerable period of time by the government and policy makers while the whole attention pis paid on the crude oil. The term-paper takes analytical and quantitative dimension. The quantitative technique is employed in a multivariate study with the adaptation of the Solow Growth model that include Capital proxy by Gross Capital Formation (GCF), labour proxy by post secondary school enrolment, Agricultural Output and Economic Growth and Development proxy by RGDP. Restricted Error Correction Model is used with the aid of Econometrics View Package (e-view). The study reveals that the Agriculture plays a significant role in economic development of the nation. In addition, the sector has been neglected to the extent that its contribution to the GDP has been dwindling since 90’s. Consequently, the barriers to the agricultural sector performances were identified and the necessary policy recommendations were proffered.
Loading Preview
Sorry, preview is currently unavailable. You can download the paper by clicking the button above.