The Dutch Disease In Ghana:Comparison Of Symptoms,Policy Analysis And Options

In 2007,Ghana discovered crude oil off the shores of its Western Atlantic Coast.Oil is a highly sought after natural resource hence,it is able to generate huge amounts of revenue for nations that produce and export it.However,the discovery of natural resources has often led to the occurrence of the Dutch Disease.This is an economic phenomenon which usually occurs when more attention is directed to the natural resource sector and less is focused on the manufacturing and agricultural sectors.This leads to exchange rate appreciation and inflation.In respect to oil there is also the likelihood of volatile oil prices.Proper management of the oil revenue generated is required to prevent the Dutch Disease with the use of optimal policies.Unfortunately,ten years after the discovery and production of oil in commercial sectors,critical sectors in Ghana's economy,agriculture and manufacturing have been consistently abysmal in performance.The research will therefore evaluate various resource rich countries and looked at how they managed to either combat or avoid the Dutch Disease.It also evaluated the PRMA and gathered information from various books and articles on ways of avoiding and combatting the Dutch Disease.In addition,information was obtained from experts that have done extensive research on the Dutch Disease and have suggested various optimal policies which can be used to manage oil revenue.The views of Ghanaian policymakers were also taken into consideration on how effective the PRMA is.With a combination of these various sources,optimal policies were generated in order to serve as recommendations for policymakers in Ghana.