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Economic transformation in Ghana: Where will the path lead?

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  • Kolavalli, Shashi
  • Robinson, Elizabeth J. Z.
  • Diao, Xinshen
  • Alpuerto, Vida
  • Folledo, Renato
  • Slavova, Mira
  • Ngeleza, Guyslain K.
  • Asante, Felix Ankomah

Abstract

In the context of the Ghanaian government’s objective of structural transformation with an emphasis on manufacturing, this paper provides a case study of economic transformation in Ghana, exploring patterns of growth, sectoral transformation, and agglomeration. We document and examine why, despite impressive growth and poverty reduction figures, Ghana’s economy has exhibited less transformation than might be expected for a country that has recently achieved middle-income status. Ghana’s reduced share of agriculture in the economy, unlike many successfully transformed countries in Asia and Latin America, has been filled by services, while manufacturing has stagnated and even declined. Likely causes include weak transformation of the agricultural sector and therefore little development of agroprocessing, the emergence of consumption cities and consumption-driven growth, upward pressure on the exchange rate, weak production linkages, and a poor environment for private-sector-led manufacturing.

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 1161.

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Date of creation: 2012
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Handle: RePEc:fpr:ifprid:1161

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Keywords: economic growth; Economic transformation; agricultural sector; Private sector;

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  1. Breisinger, Clemens & Diao, Xinshen & Kolavalli, Shashidhara & Al Hassan, Ramatu & Thurlow, James, 2011. "A new era of transformation in Ghana: Lessons from the past and scenarios for the future," Research reports clemensbreisinger, International Food Policy Research Institute (IFPRI).
  2. Robinson, Elizabeth J. Z. & Kolavalli, Shashi L., 2010. "The case of tomato in Ghana: Processing," GSSP working papers 21, International Food Policy Research Institute (IFPRI).
  3. Justin Sandefur, 2010. "On the Evolution of the Firm Size Distribution in an African Economy," CSAE Working Paper Series 2010-05, Centre for the Study of African Economies, University of Oxford.
  4. Delgado, Christopher L. & Hopkins, Jane & Kelly , Valerie & Hazell, P. B. R. & McKenna, Anna A. & Gruhn, Peter & Hojjati, Behjat & Sil, Jayashree & Courbois, Claude, 1998. "Agricultural growth linkages in Sub-Saharan Africa:," Research reports 107, International Food Policy Research Institute (IFPRI).
  5. Barry Eichengreen & Poonam Gupta, 2011. "The Service Sector as India's Road to Economic Growth," NBER Working Papers 16757, National Bureau of Economic Research, Inc.
  6. Ackah, Charles & Medvedev, Denis, 2010. "Internal migration in Ghana : determinants and welfare impacts," Policy Research Working Paper Series 5273, The World Bank.
  7. Breisinger, Clemens & Diao, Xinshen, 2008. "Economic transformation in theory and practice: What are the messages for Africa?," IFPRI discussion papers 797, International Food Policy Research Institute (IFPRI).
  8. Francis Teal, 1999. "Why Can Mauritius Export Manufactures and Ghana Not?," The World Economy, Wiley Blackwell, vol. 22(7), pages 981-993, 09.
  9. Fabian Barthel & Matthias Busse & Robert Osei, 2011. "The Characteristics and Determinants of FDI in Ghana," The European Journal of Development Research, Palgrave Macmillan, vol. 23(3), pages 389-408, July.
  10. Derek Headey & Dirk Bezemer & Peter B. Hazell, 2010. "Agricultural Employment Trends in Asia and Africa: Too Fast or Too Slow?," World Bank Research Observer, World Bank Group, vol. 25(1), pages 57-89, February.
  11. Aryeetey, Ernest & Baah-Boateng, William, 2007. "Growth, investment and employment in Ghana," ILO Working Papers 397933, International Labour Organization.
  12. Melo, Patricia C. & Graham, Daniel J. & Noland, Robert B., 2009. "A meta-analysis of estimates of urban agglomeration economies," Regional Science and Urban Economics, Elsevier, vol. 39(3), pages 332-342, May.
  13. Nicholas Nsowah-Nuamah & Francis Teal & Moses Awoonor-Williams, 2010. "Jobs, Skills and Incomes in Ghana: How was poverty halved?," CSAE Working Paper Series 2010-01, Centre for the Study of African Economies, University of Oxford.
  14. Clemens Breisinger & Xinshen Diao & Rainer Schweickert & Manfred Wiebelt, 2009. "Managing Future Oil Revenues in Ghana - An Assessment of Alternative Allocation Options," Kiel Working Papers 1518, Kiel Institute for the World Economy.
  15. Akramov, Kamiljon T. & Asante, Felix Ankomah, 2008. "Decentralization and local public services in Ghana: Do geography and ethnic diversity matter?," GSSP working papers 16, International Food Policy Research Institute (IFPRI).
  16. Francis Teal & Geeta Kingdon & Justin Sandefur, 2005. "Labor Market Flexibility, Wages and Incomes in sub-Saharan Africa in the 1990s," Economics Series Working Papers GPRG-WPS-030, University of Oxford, Department of Economics.
  17. Clemens Breisinger & Xinshen Diao & James Thurlow & Ramatu M. Al Hassan, 2011. "Potential impacts of a green revolution in Africa—the case of Ghana," Journal of International Development, John Wiley & Sons, Ltd., vol. 23(1), pages 82-102, January.
  18. Gustavo Anríquez & Silvio Daidone, 2010. "Linkages between the farm and nonfarm sectors at the household level in rural Ghana: a consistent stochastic distance function approach," Agricultural Economics, International Association of Agricultural Economists, vol. 41(1), pages 51-66, 01.
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Cited by:
  1. Chapoto, Antony & Mabiso, Athur & Bonsu, Adwinmea, 2013. "Agricultural commercialization, land expansion, and homegrown land-scale farmers: Insights from Ghana:," IFPRI discussion papers 1286, International Food Policy Research Institute (IFPRI).
  2. Diao, Xinshen & Cossar, Frances & Houssou, Nazaire & Kolavalli, Shashidhara & Jimah, Kipo & Aboagye, Patrick, 2012. "Mechanization in Ghana: Searching for sustainable service supply models:," IFPRI discussion papers 1237, International Food Policy Research Institute (IFPRI).

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