This paper explores both political and economic trends affecting the impact of Ghanas current eco-political policies. Furthermore, this paper examines the liberalization of trading system reform policies within Ghana, with the goal that readers see that eradication of poverty is necessary from these crippling tariffs disrupting the economic state of welfare, and gauge the poverty impact of trade liberalization in Ghana. Finally, this paper analyzes statistic gathered from a plethora of cited resources modeling a four-year moderate growth projection analysis following the years 2019-2023. The audience of readers must understand the task beforehand cannot be solve overnight- Lest Rome was not built in one day. An innovative approach, for economic initiatives, will strengthen Ghanas economic infrastructure through careful consideration and exploring new business development opportunities. (The Economist, 2018).
According to the scholarly peer journal review conducted by the International Journal of Economics, Commerce and Management United Kingdom. Trade liberalization has been at the epicenter of monetary changes in Ghana since 1983. Trade liberalization is typically connect to disposal of taxes of different services which also includes tariffs and other different type of trading barriers such as like imports, subsides and non-tariffs on trade. With the trade it will open more free market and market information, of many different types of monopoly and oligopoly power. So that free movement of trade of capital and labor between different countries. This has prompted an expansion in the volume and estimation of imports which is enquired to expand import income in the nation. The investigation comprised of Time Series information on Ghana to look at both the short and long haul connection between exchange progression and import income. The investigation explicitly centers around crafted by the Johanen and Juselius (1990) Integration test and the Ganger (1997) causality to analyze both long run and short elements. The observational outcome demonstrates that exchange advancement upgrade imports both over the long haul and short run. Once more, the outcome demonstrates that there is a positive unidirectional causality running from exchange advancement to import income without the input in Ghana. This proposes approaches concerning imports can be supported in terms of professional career advancement in the economy of Ghana.(Global Journal of Economics, Commerce and Management 2014)
Exploring Ghanas Economic-Political History Since the 1990s:
Ghana is geographically positioned within the western section of Africa among the French-speaking country of La C?te d’Ivoire, Burkina Faso, and Togo in the west, north, and east respectively and bordered in the south with the aid of the Gulf of Guinea. With an estimated population of 24 million of which 70 percent stay in rural areas, Ghana covers a vicinity of 238,537 rectangular kilometers with a population density standing at 88/sq. km. The population growth price of 1.9 percent as of 2009 (GSS, 2011). Ghana in 1957 became the first sub-Saharan country in colonial Africa to advance its liberation from out of the jaws of British colonial rule. Ghana has continued to become a flourishing country while having a stable democracy in 1992 and is viewed as a regional model for political and economic-reform. The New Patriotic Party (NPP) is led by President Nana Akufo-Addo who won the presidential election in 2016 against,
A year in the wake of choice for Presidency in a quiet decision, President Akufo-Addo has had a few difficulties. Satisfying his decision vows including setting up a manufacturing plant in every one of the countries is 216 areas, one dam for each town and giving free secondary school training. Although the legislature has begun executing a part of its guarantees, for example, planting for sustenance and for employment, and free optional instruction. The specialists need to focus on proper adjusting and subsidizing in the years ahead.
Ghana’s monetary execution enhanced fundamentally in 2017 after a troublesome 2016. The monetary shortage dropped to 6% of the total national output (GDP) in 2017 from 9.3% in 2016, supported by genuine financial combination endeavors. Regardless of that add up to income (grants) did not meet expectations by 1.1% of GDP, the monetary turnaround was carried out through consumption cuts (1.3% of GDP), which were forced on intermittent and capital uses. The legislature additionally topped exchanges to Earmarked Funds at 25% of assessment incomes. The essential equalization enhanced from a deficiency in 2016 to an excess of 0.8% of GDP in 2017. The obligation to GDP proportion is assessed at 69.2% in December 2017 down from 73.4% in 2016 mirroring a logjam in the rate of outer obligation gathering, and additionally higher GDP development. Residential income preparation is a key need for the legislature, and the World Bank bolsters these endeavors through specialized help to the Ghana Revenue Authority. (Wikipedia, Ghana Economy, 2018)
Recent Economic Developments in Ghana
Ghana Statistical Service, has shown in April 2018, Ghana’s economy extended by 8.5% in 2017 from 3.6% every year back driven by the mining and oil segments. The use of oil has climbed emphatically because the Offshore Turret Remediation Project that was conceded from 2017 to 2018. Not with standing this erratic effect of, gold yield remaining high in depend and remembering that coca age levels remained stable. Even regardless, of non-oil advancement of the declined to 4.8% from 5.1% in the year of 2016 as improvement in the organizations part decelerated in 2017.(Ghana World Bank 2018).
The outside part enhanced, the cedi stayed stable, while the remote stores rose. End-2017 information proves a considerable narrowing of the present record shortage because of the huge surplus in the exchange balance and higher private exchanges. This attitude reflects more grounded execution in profit from oil, gold, and cocoa, which curbed imports. The exchange balance enhanced to a surplus proportionate to 2.3% of GDP at end 2017 (from a deficiency in 2016). The present record deficiency limited to 4.6% of GDP (USD $2.1 billion) from 6.7% of GDP) a year prior. Net worldwide stores were evaluated at USD $ 7.6 billion, identical to 4.5 long stretches of imports, up from USD $6.2 billion compared to 3.1 months in 2016.
According to Economic Times, Ghanas economy extended 5.4 percent year-on-year in the second quarter of 2018, the same pace as in the earlier period. It stayed the weakest growth rate since the third quarter of 2016, mostly due to
a stoppage in the services sector. On a quarterly basis, the gross domestic product grew 1.3 percent. The country rebased its nationals accounts from 2006 prices to 2013. (Trading Economics, 2018).
Analyzing Ghanas Economy
Throughout the history of Ghana, there have always been political, economic, and psychological effects that have led to both positive and negative impacts on the economic development of Ghana. In recent months leading up to 2019, Ghanas sustainable development has strengthened within its economic infrastructures, as the government begins to prioritize industrialization to catapult employment creation and emerging marketing economies, but a tight financial budget will restrain the pace of progress. According to The Economist, an online source for the globalization of economic past, present, and future trends within a countrys emerging markets, the economic growth of Ghana will be strong, but will be focus around the oil and gas sector. However, further data forecast shows that in 2019-2023 there will be an increase of sustainable developments by pro-business reforms and following steady improvement within Ghanas power supply that shows a positive trade surplus for the four-years ahead. (The Economist, 2018)
According to Wikipedia, Ghanas GDP totaled to a staggering 50% in 2012, that is structured from its economic services and the workforce employment that make of 28%. Ghana workforce which consists of 53.6% of Ghana’s workforce became employed in agriculture in 2013. Ghana embarked on a currency re-denomination exercise, from Cedi (?) to the new currency, the Ghana Cedi (GH?) in July 2007. The transfer rate is 1 Ghana Cedi for every 10,000 Cedis. Ghana is now Africa’s second-biggest gold producer (after South Africa) and second-largest cocoa producer. It is also rich in diamonds, manganese ore, bauxite, and oil. Most of its debt canceled in 2005, but loose government spending was later allowed to inflate. Fixed with a plunge in oil prices, this led to an economic crisis that forced the government to negotiate a $920 million extended credit facility from the IMF in April 2015. (Wikipedia, Ghana Economy 2018)
Out of Many West African nations, Ghanas economy unquestionably links to worldwide commodities. This gives Ghana economy a comparative advantage, because Oil, gold, and cocoa are the three fundamental sources of foreign currency and income; in any case, cost swings over 2015 and 2016 for these three assets, a strengthening US dollar, as well as domestic issues such as economic slippage, developing debt, and mounting inflation have combined to moderate the pace of improvement, forcing to a deteriorating cash and a budget setback. Despite this, Ghanas financial prospects for 2018 point to steady growth, as mentioned earlier shows a positive incline for a four-year projection analysis for 2019-2023. Taking after a belt-tightening handle, the government has both brought down the risky financial shortfall and channeled capital investing towards need ventures by capping budget exchanges to statutory stores. The Ghana government moreover has plans industrialize unpolished districts, progress the trade environment, saddle the monetary segment and move forward get to credit for private on-screen characters. (Oxford Business Group Bloomberg Terminal Research, 2018).
In conclusion, this paper explored both political and economic trends affecting the impact of Ghanas current eco-political policies. Furthermore, this paper examines the attitudes in which must be adapted to further strengthened Ghanas liberalization of the trading system. Findings from supporting literature such as the likes of from the (International Journal of Economics, Commerce, and Management, 2014) reform policies must be discussed within Ghana, readers see how through reform of these policies the eradication of poverty will strengthen its domestic economy; and further avoid crippling tariffs, thus this will gauge the poverty impact of trade liberalization in Ghana. Finally, this paper analyzed statistic gathered from a plethora of cited resources modeling a four-year moderate growth projection analysis following the years 2019-2023. Furthermore, findings mentioned previously in this research literature, PWC reminds us that Ghanas annual GDP growth is around 10.3% between 2010 and 2012, and forecasted to average 5.9% between 2012 and 2017, Ghana is among the worlds fastest-growing countries and a rising star in Africa. Ghanas investor attractiveness is sustained by its political stability (one of Africas most stable governments), economic liberalism, abundant natural resources, and diverse economy. Foreign direct investment inflows have flourished in recent years, especially since the commercialization of oil began in 2007, which is a further factor contributing to Ghanas investor attractiveness. On the downside, critical limiting factors are the rising tax burden, weak rule of law, as well as Ghanas battled with its monetary fiscal budget. PWC, confidently affirms that Ghana will continue to foster its reputation and position to be known as a safe gateway to West Africa and an ideal point of arrival for newcomers to Africa. (Ghana, PWC, 2018)
In the body of this paper, I empirically examined the findings used for the long run, short run and causal relationship between trade liberalization and import revenue for Ghana. The Johansen and Juselius (1990) approach to cointegration is the reference. The result shows evidence of both long run and short-run relationships between the series for Ghana. From the results of both the long-run and short-run estimates, all the explanatory variables in the model were significant in explaining variations in the import revenue. Thus, the results of the VECM also showed that the error correction term for the import revenue model was significant and did carry the expected negative sign. Finally, findings have shown that there is a uni-directional causality running from trade liberalization to import revenue without feedback. This study in unison with the empirical literature confirmed both the long run and short run relationship between import and its determinants. Also, further findings showed that trade liberalization, real GDP, government expenditure, foreign asset, and foreign exchange reserve had a positive effect on import revenue with the greatest arising from trade liberalization and foreign asset respectively both in the long run and short run. The exchange rate, on the other hand, had a negative effect on import revenue. (International Journal of Economics, Commerce and Management, 2014)