FiscalAlert12: Ghana’s Economic Development: Past, Present and the Future.
May 8, 2018
FiscalAlert13: Mid-Year Review of the 2018 Budget Statement & Economic Policy
August 5, 2018

Economic Shocks And Growth 
In Post-Independence Ghana, 1957 To 2017 [Occasional Paper 14]

Economic Shocks And Growth 
In Post-Independence Ghana, 1957 To 2017

The study analyses economic growth based on annual changes in real gross domestic product (GDP) in Ghana during the post-independence period from 1957 to 2017 using an econometric approach involving an autoregressive modelling scheme that incorporates several economic shocks as separate independent variables. The economic shocks included in the model are world cocoa price shock, world oil price shock, weather shock due to an El Nino weather phenomenon, and political instability shock for military coups or attempted military coups. The results of the analysis confirm the considerable impact of various economic shocks on economic growth. Using the standardised regression estimates, the most important variable affecting economic growth in Ghana over the 60-year period was political instability shock followed by world oil price shock, weather shock dealing with the El Nino weather phenomenon, and then world cocoa price shock. The results indicate the need for policy makers to pay more attention to economic shocks in the development of programmes to enhance sustainable and broad-based economic growth in Ghana. Several policy proposals are made in the paper including the establishment of enhanced and larger stabili- sation funds for export commodities such as cocoa. It is recommended that policy makers see the Ghana- ian economy as vulnerable to intermittent major economic shocks, including natural hazards, which require their close monitoring and the use of adaptive measures.

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