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Oil discovery and macroeconomic management : the recent Ghanaian experience

Author

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  • Bawumia,Mahamudu
  • Halland,Havard

Abstract

This paper analyses the evolution of fiscal and monetary variables in Ghana, from the discovery of oil in 2007 through to 2014. It documents the deterioration of fiscal and monetary discipline over this period, which resulted in a rebound of debt, a deterioration of the external balance, and a decrease in public investment. The paper goes on to analyse the potential causes of this deterioration, including the political economy context, and the fiscal and monetary institutional framework. The suggested causes include the politics of Ghana's dominant two-party system. Finally, the paper discusses what Ghana could have done differently to avoid the various damaging effects associated with the oil discovery. It does not aim to provide specific fiscal policy recommendations for Ghana, but rather to give an empirical account of Ghana's experience that may be useful for other countries that discover oil.

Suggested Citation

  • Bawumia,Mahamudu & Halland,Havard, 2017. "Oil discovery and macroeconomic management : the recent Ghanaian experience," Policy Research Working Paper Series 8209, The World Bank.
    • Handle: RePEc:wbk:wbrwps:8209
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    Citations

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    Cited by:

    1. Regina Stéphanie Seri, 2021. "How giant discoveries of natural resources impact sovereign debt ratings in developing and emerging countries ?," CERDI Working papers hal-03144330, HAL.
    2. James Cust, 2017. "The role of governance and international norms in managing natural resources," WIDER Working Paper Series wp-2017-203, World Institute for Development Economic Research (UNU-WIDER).
    3. Ernest Aryeetey & Ishmael Ackah, 2018. "The boom, the bust, and the dynamics of oil resource management in Ghana," WIDER Working Paper Series wp-2018-89, World Institute for Development Economic Research (UNU-WIDER).
    4. James Cust, 2017. "The role of governance and international norms in managing natural resources," WIDER Working Paper Series 203, World Institute for Development Economic Research (UNU-WIDER).
    5. Mihalyi,David & Scurfield,Thomas, 2020. "How Did Africa's Prospective Petroleum Producers Fall Victim to the Presource Curse ?," Policy Research Working Paper Series 9384, The World Bank.
    6. Ernest Aryeetey & Ishmael Ackah, 2018. "The boom, the bust, and the dynamics of oil resource management in Ghana," WIDER Working Paper Series 89, World Institute for Development Economic Research (UNU-WIDER).
    7. Regina Stéphanie Seri, 2021. "How giant discoveries of natural resources impact sovereign debt ratings in developing and emerging countries ?," Working Papers hal-03144330, HAL.

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