Economic and Policy Foundations of Agricultural Exports from Ghana: A Co-integration Analysis

Topics: International trade, Economics, International economics Pages: 37 (7508 words) Published: June 26, 2014
Available online at http://www.journalijdr.com

International Journal of

DEVELOPMENT RESEARCH

ISSN: 2230-9926

International Journal of Development Research
Vol. 4, Issue, 6, pp. 1240-1248, June, 2014

Full Length Research Article
ECONOMIC AND POLICY FOUNDATIONS OF AGRICULTURAL EXPORTS FROM GHANA: A COINTEGRATIONANALYSIS 1*BoansiDavid, 2LokononBoris

OdilonKounagbé, 2AppahJohn and
1GebremariamGebrelibanosGebremedhin

1Department
2West

of Economic and Technological Change, Center for Development Research (ZEF), Bonn, Germany African Science Service Center on Climate Change and Adapted Land Use (WASCAL), UniversitéCheikh Anta Diop-FASEG, Senegal / Center for Development Research (ZEF), Germany

ARTICLE INFO

ABSTRACT

Article History:

This study was primarily undertaken to help bridge information gap and inform agricultural trade policy prescriptions on how growth observed in Ghana’s agricultural export sector could be sustained and scaled up. Achievement of this purpose was sourced through usage of the Johansen Full Information Maximum Likelihood test.Findings from the respective estimations reveal that, structural weaknesses in production, trade and marketing environments preclude the country from exploiting growth enhancing opportunities in the short-run, while potential barriers to trade yield similar implication in the long-run. Minimization of both short and long-run inhibitions could further enhance agricultural export growth for Ghana. Based on estimates observed in this study, sustenance and scaling up of the Ghanaian agricultural export sector requires addressing of existing structural weaknesses and inefficiencies in production, trade and marketing, increased diversification of agricultural exports, increased openness to trade, attraction of export enhancing foreign direct investments, and increased domestic production.

th

Received 24 March, 2014
Received in revised form
18th April, 2014
Accepted 05h May, 2014
Published online 25th June, 2014

Key words:
Agricultural exports;
Co-integration;
Export diversification;
Export growth; Ghana

Copyright © 2014 Boansi, D. et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

INTRODUCTION
Anchoring economies on firm economic and policy roots is
key to shielding such economies from economic storms. A key
root in this regard for most developing economies has been, is and would continue to be agriculture. Agriculture employs not only over 50% of the total workforce in most developing
countries, but most importantly, the sector has been a relevant and effective tool in the fight against poverty worldwide. In addition, the sector has been a key source of income
generation for many small-holder farmers, processors and
marketers in rural economies, and enhances earning of foreign exchange. Being primarily agrarian, Ghana’s economy has
since the immediate post-independence period been steered by developments and depressions in the agriculture sector.
Having inherited fortune from the pre-independence era, use
of inappropriate domestic policies (under the socialist model of the 1960s) including currency overvaluation, fueling of
inflation, extreme reliance on cocoa exports,import licensing, price controls (Stryker 1990, 1991; Leith and Söderling, 2000; *Corresponding author: BoansiDavid
Department of Economic and Technological Change, Center for
Development Research (ZEF), Bonn, Germany

Tsikata, 1999) and ineffective state interventions exposed the Ghanaian economy to a “pseudo” resource curse. This in April 1983 incited the country’s adoption of a more liberal model under the auspices of the IMF and the World Bank. Opting for a more liberal model by the then government was to help

address prevailing fiscal, financial and marketing
inefficiencies in...


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