Sacrificing Cereals for Crude: Has oil discovery slowed agriculture growth in Ghana?

Ackah, Ishmael (2016): Sacrificing Cereals for Crude: Has oil discovery slowed agriculture growth in Ghana?

Abstract

This study applies the quadratic hill climbing model, stepwise regression, and a dynamic generalized method of moments to investigate the relationship between oil rents and agriculture growth in Ghana. Agriculture, once considered the backbone of Ghana’s economy recorded a reduction of its contribution to GDP from 45% in 1992 to 22% in 2013 and a growth rate of 0.04 in 2015. The results from all models confirm an inverse relationship between oil rents and agriculture output. Further, availability of agriculture land is a major driver of agriculture output. Since oil resources are exhaustible and oil revenues are volatile, the study recommends a sustainable investment plan that emphasis on diversification, private investment in the agriculture value chain, and productive land use, and encourages higher percentage of revenues into agriculture.

• Item Type: MPRA Paper
• Language: English
• Keywords: Oil revenues, Agriculture, Ghana, Oil Production
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q10 - General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q48 - Government Policy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics

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