The Impact Of Trade Liberalisation On Economic Growth Of Ghana

Trade liberalisation is often measured to be helpful for economic growth.Furthermore to be relative advantage quarrel of the traditional economists,trade liberalisation advances competition,endorses big market,transmission of technology and hereafter competence in production.Due to some of this reason,most developing countries have included the trade liberalisation policy as part of structural reforms.Granting trade liberalisation has benefited some nations,the same thing cannot be said about many African nations,including Ghana;a condition point to the fact that trade reforms tend to create both winner and also losers.Ghana is a firm believer in the tenets of the Multilateral Trading System(MTS)and fully committed to its principles.This is why it joined the General Agreement on Tariffs and Trade(GATT)in October 1957 after attaining independence in March 1957 and became a founding member of the World Trade Organisation(WTO)in 1995.However,because of supply-side constrictions our country has not been able to noticeably take gain of the market access prospects offered by the MTS(Multilateral Trading System).Consequently Ghana has progressively opened its trade regime particularly after 1980 when Ghana putative too IMF and World Bank Physical Modification Programme.The focal drive of the liberalisation policy was to exposed the economy to upsurge rivalry to advance efficiency in local businesses so as to boost economic development.The broad objective of the study of paper is to investigate and analyse the impact of trade liberalisation on the economic growth of Ghana using Gross Domestic Product(GDP)as substitution.The specific objective of this study is to examine the trend of liberalisation and Gross Domestic Product(GDP)growth rate over the period 1977 to 2017 with total variables of ten was used for the analysis sampling.This study will conduct an analysis on the relationship between trade liberalisation and other economic growth indicators.The Autoregressive Distributed Lag(ARDL)tactic was used to approximate the model detailed for the work.The choice Autoregressive Distributed Lag of the tactic was mostly due to the littleness of the taster scope.The correlation research techniques that were used for the study included the Johansson Cointegration Test,Vector Error Correction Model,and Vector Error Correction granger causality,Impulse Response as well as the Variance Decomposition.The outcomes of the research have revealed that there is a relationship between trade liberalisation and economic growth in Ghana.The Johansen Cointegration test confirmed the correlation matrix results by affirming that there is constant interaction between the economic growth indicators identified.The test vehemently rejected the null hypothesis with significant probability of less than five percent of the required threshold.On causality score,the Granger Causality test score undertaken on variables has shown that trade liberalisation on its own cannot cause economic growth however on aggregation with other economic indicators a growth may be caused.With the result from this research,it is been suggested that both export and local consumers should be fortified to patronize domestic made goods and services.In a way of organisation of rural trade fairs and exhibitions to bring made in Ghana goods to the accesses of the public.Also been suggested that foreign direct investors(FDI)should be fortified to invest in the Industrial and agriculture sectors not only the mining sector.Infrastructure development should increase by Government as it is notable attention for places on social intervention programmes.This would bring about balance among infrastructure development and social intervention programmes to raise the country's gross capital formation that is deteriorating.