Export Efficiency and Diversification in Ghana
Date
2022-05
Authors
Obeng, Camara K.
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research Consortium
Abstract
Ghana needs to expand its export base in order to generate sufficient foreign exchange
earnings for economic transformation. There is, therefore, a need to examine the
efficiency of the existing export basket and explore new products to add to it. This
study employs the stochastic frontier gravity model to investigate the efficiency
of bilateral exports of Ghana using a panel of 44 export destination countries for
the period 2000 to 2018. In addition, a product space analysis is carried out to
ascertain which other products Ghana has to diversify into in order to engender the
transformation required for the attainment of Sustainable Development Goal 8. As
a third objective, the study investigates the extent to which Ghana can leverage the
African continental free trade area for its diversification agenda. The study finds that
Ghana’s bilateral export trade is inefficient, implying huge potential exists. It further
reveals that Ghana’s economic complexity is low, leading to the production and export
of primary commodities. Moreover, the African continental free trade area offers an
opportunity for Ghana to crystalise its export diversification drive. It is recommended
that Ghana takes advantage of its membership of trade blocs to negotiate access
to foreign markets, improve on logistics, enhance macroeconomic stability, step up
vocational and technical education, and increase investment in land and reliable,
cheap electricity in order to grow its exports.
Description
Keywords
Export diversification, export efficiency, product space, Ghana