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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?

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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.

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