The Effect Of Export And Import On Economic Growth In Ghana

In line with neoclassical economic growth which suggest that outward-orientation enhance economic growth,since independence from Britain in 1957 Government of Ghana has placed international trade at the centre of its economic development agenda.In spite of this theoretical affirmation of the trade-growth relationship,some empirical studies that have been done both in the country and abroad show diverse results.This prompted this study to be undertaken with the aim of analyzing the effect of Export and Import on economic growth in Ghana from 1990 to 2017.This study has used a neoclassic economic growth model containing gross domestic product,exports,imports,capital,FDI,Trade Openness,Trade policy reforms and labour forceas variables of analysis.After collecting annual time series data(quarterly)on the variables for the period 1990 to 2017 from the Central Bank of Ghana,Ordinary Least Squares regression and several econometric tests were run on the model to ensure robust and accurate results.Statistical accuracy of the findings was further cemented by use of the 5 percent level of significance.Exports and imports were found to have a positive and statistically significance effect on Ghana?s economic growth,labour also had a positive effect on economic growth even though was statistically insignificant.On the other hand Capital,Trade Openness,Trade policy Reforms and FDI showed a negative effect on economic growth and was statistically insignificant except Trade Openness and Trade policy Reforms which were of significance.The above results strongly suggest that Ghana should continue with its export-led economic growth strategies.Government of Ghana should strengthen the competitiveness of export sectors by combining the imports of foreign high-technology by direct buying or indirect FDI.Ghana should gradually reduce exports of raw materialand low-value-added goods while it encourages more importation of foreign technical expertise and intermediate capital goods.Furthermore,the country should also improve the quality of the labour force and capital formation.