Emerging “Dutch disease” in emerging oil economy: Ghana’s perspective

Abstract

Purpose – The purpose of this paper is to examine the Ghanaian economy within the context of its macro-economic indicators and the performance of the agricultural sector against the backdrop of the exogenous economic explanation of the resource curse. This is aimed at equipping policy makers with the tools needed in identifying symptoms of the Dutch disease as it transitions from an agrarian to an oil economy. Design/methodology/approach – This is a research paper, employing quantitative and qualitative data of the macro-economic indicators in the last ten years (2000-2010) and policy initiatives since the discovery of oil in commercial quantities in Ghana. Furthermore, it also examines theoretical perspectives of the Dutch disease as frames of analysis to gauge the existence of any symptoms of the latter. Findings – The paper questions a previous World Bank (2009) report classifying the Ghanaian economy as already showing signs of the Dutch disease. The paper suggests that the macro-economic indicators show resilience and stability of the economy which is necessary for growth. It is observed that various government policies are aimed at improving agriculture inspite of the emerging oil industry. The paper recognizes some areas of concern and recommends further studies to observe the changes in dynamics when the “petro-dollars” begin to flow into the economy. Originality/value – This is a pioneering work which seeks to provide early warning signals of the Dutch disease in an emerging oil economy. Keywords Resource curse, Dutch disease, Ghana, Oils, Gas, Gases Paper type Research paper