CRUDE OIL PRODUCTION AND MACROECONOMIC PERFORMANCE IN GHANA
Date
2021-02-12
Authors
Tunyo, Delali Aku
Journal Title
Journal ISSN
Volume Title
Publisher
University of Cape Coast
Abstract
This study investigated the impact of crude oil production on
macroeconomic performance in Ghana. The study employed monthly data from
January 2011 to December 2018. The structural vector autoregressive (SVAR)
model was employed to analyse the impact of crude oil production on
macroeconomic performance. The findings of the structural impulse response
function revealed that crude oil production had no impact on the agricultural
sector, manufacturing sector, services sector, real effective exchange rate and
inflation. However, crude oil production had a positive impact on fiscal balance.
The findings of the structural forecast error variance decomposition showed that
crude oil production accounted for a small amount of variation in all the
variables except fiscal balance for which it accounted for the largest portion of
the variation. The study concluded that crude oil production had no significant
impact on the non-oil sectors, real effective exchange rate and inflation.
However, crude oil production had a positive impact on fiscal balance. The
study recommended that the government through GNPC and major oil
stakeholders such as Tullow Ghana Limited, Kosmos Energy Ghana and
Anardako Petroleum Corporation should establish of oil refineries, petroleum
industries and fertilizer plants domestically and also the development of the
manufacturing and the services sector to provide the backward and forward
linkages that needs to be shared between the oil sector and other sectors of the
economy.