TITLE:
An Empirical Assessment of the Nexus between Sectoral Structure, Inflation, Exchange Rate and Economic Growth in Ghana
AUTHORS:
Selasie Asigbetse, Jones Lewis Arthur, Kwame Oduro Amoako, Emmanuel Opoku Marfo, Sonny Davis Arthur
KEYWORDS:
Sectoral Structure, Inflation, Exchange Rate, Economic Growth
JOURNAL NAME:
Open Journal of Business and Management,
Vol.10 No.5,
August
19,
2022
ABSTRACT: The study examined the relationship between inflation
and exchange rates in Ghana, the sectoral structure of the economy of Ghana and
also explored how this structure influences economic growth when inflation and exchange
rates are under consideration. The study gathered data over the sampled period of
1980- to 2019 and used appropriate techniques to test for unit roots and co-integration
in the data. After applying the appropriate regression techniques results obtained,
it was identified that there was a negative relationship between inflation and exchange rates in Ghana from
1980- to 2019. Also, results obtained from the descriptive analysis and correlation
results showed that the current structure of the economy was dominated by services
value-added, followed by industry value added and then agriculture value-added.
Finally, results showed different impacts of interactions between inflation and
sectoral structure on economic growth in Ghana, as compared to the interactions
between exchange rates and sectoral structure in Ghana. The study concluded that
the structure of the economy of Ghana has also evolved—from one dominated by agriculture
value added to one that is now dominated by services value-added. This change in
the structure has resulted from changes in economic policies and the adoption of
liberalization policies that have allowed for more trade and free markets. It was
recommended that the real issue for policymakers should not be how to control inflation
or the exchange rate. Instead, policymakers should focus on how to structure the
economy of Ghana to take advantage of the dynamics of the global marketplace and
reduce the influence of the exchange rate on the economy of Ghana. Also, there is
a need for more public education on the importance of consuming and patronizing
locally manufactured goods and services.