Ghanaian Journal of Economics - Volume 2, Issue 1, 2014
Volume 2, Issue 1, 2014
Source: Ghanaian Journal of Economics 2, pp I –II (2014)More Less
This issue of the Ghanaian Journal of Economics is dedicated to the memory of Prof. Kwadwo Asenso-Okyere, a founding member of the editorial board who passed on in July 2014 after a long and dedicated service to Ghana and the international community. Prof. Kwadwo Asenso Okyere was the Vice Chancellor of the University of Ghana from 2002 to 2006 and the Director of the Eastern and Southern African Region of the International Food Policy Research Institute (IFPRI). His experience in research and advocacy focussed on economic development issues such as food and agriculture, health and nutrition and international trade policies and quantitative decision modelling. We at the Ghanaian Journal of Economics present this collection of articles on varied academic and policy subjects to capture the essence of both the academic and professional life of Prof. Kwadwo Asenso Okyere. Our first article is a contribution by Prof. Asenso Okyere's colleagues at the IFPRI. Dr. Shenggen Fan is the Director General of the IFPRI and Joanna Brzeska is a consultant of the same institute. The article 'moving from vision to reality: ending hunger and under-nutrition in Africa by 2025' underscores the critical policy conundrums surrounding hunger and under nutrition that Prof. Kwadwo Asenso Okyere devoted his professional life to. The article opines that sub-Saharan Africa's recent unprecedented economic growth has not translated into improving the food security situation on the continent. Although African leaders have pledged their commitment to combat the menace, the persistent challenge has been the willingness and capacity to translate the rhetoric into reality. Dr. Fan and his colleague succinctly propose some practical ways of tackling the food security problem in sub-Saharan Africa, including but not limited to strengthening climate-smart, nutrition-sensitive growth in agricultural productivity; establishing efficient and inclusive food value chains; promoting productive social safety nets and scaling up support for country specific, evidence-based policymaking.
Source: Ghanaian Journal of Economics 2, pp 4 –17 (2014)More Less
The world continues to face serious challenges of hunger and under nutrition and nowhere is this more evident than Sub-Saharan Africa (SSA). Despite the region's unprecedented economic growth in recent years, SSA is home to the highest prevalence of hungry people in the world and is one of the only two developing regions where the number of hungry people has steadily risen since 1990 (alongside Western Asia). In a monumental move, African leaders pledged in 2013 to work together to end hunger by 2025. This powerful commitment comes on the heels of the tenth anniversary of the Comprehensive Africa Agriculture Development Plan (CAADP), a regional framework that has helped spur food production and food security over the last decade. African governments have shown their commitment to achieving food security, but the task ahead for improving SSA's food security remains immense, especially given the spectrum of country-specific pathways required. The challenge remains how to transform the vision of ending hunger in SSA by 2025 into reality.
Source: Ghanaian Journal of Economics 2, pp 18 –48 (2014)More Less
This paper analyses Ghanaian households' demand for cereals and cereal products with the objective of determining consumption patterns across expenditure (income) groups and estimating price and expenditure elasticities. The Linear Approximate Almost Ideal Demand System (LA/AIDS) is employed and applied to two nationwide household surveys which involved 4,523 and 5,998 households. Missing commodity prices and household expenditure in the datasets were imputed using single and multiple imputation techniques respectively. Overall, the findings indicate that the various expenditure items - rice, maize, guinea corn, sorghum and bread - are price and expenditure (income) inelastic, with significant cross price effects. This shows the possibilities of substitutability and complementarity among cereals in Ghana. Furthermore, the elasticities for households in lower expenditure quintiles are generally higher than the estimates for households in higher expenditure quintiles, an indication that income and price stabilization policies on cereals in Ghana could have far-reaching impact on lower-income households.
Commodity-specific spatial integration : inter-commodity integration and substitution between maize and sorghum in GhanaAuthor Philip Kofi AdomSource: Ghanaian Journal of Economics 2, pp 49 –76 (2014)More Less
The main objectives of the study are; (1) to test for spatial integration of sorghum and maize: (2) to test inter-commodity integration, and (3) to test the existence and extent of substitution between sorghum and maize. The study used monthly real prices of sorghum and maize from 2006 to 2013. The Johansen approach is used to test for specific commodity spatial integration whilst the Bounds approach is used to test inter-commodity integration and substitution between sorghum and maize. The result showed that the sorghum and maize markets are spatially integrated. We found multiple market leaders both in the sorghum and maize markets, and that indicates simultaneous determination of prices in these markets. While the sorghum market provides arbitrage opportunities, we found that arbitrage opportunities in the maize market depend on the trade network established. The result also confirmed the existence of inter-commodity integration both in the long-run and short-run. Estimated half-life persistence indicators showed that markets are integrated to different degrees. Lastly, the result showed significant short-run and long-run substitution between sorghum and maize, but this is not perfect.
Source: Ghanaian Journal of Economics 2, pp 77 –96 (2014)More Less
Ghana has made significant progress with the reduction of poverty over the last two decades. Headcount poverty declined from 51.9% in 1991/92 to 39.5% in 1998/99 and to 28.5% in 2005/06. Nonetheless, the extent to which poverty declined varied across the country and amongst different population groups. Analysis of poverty trends in Ghana shows that poverty incidence among Male Headed Households (MHHs) is higher than Female Headed Households (FHHs), which is contrary to the "feminization of poverty" hypothesis. Moreover FHH and MHH have experienced differential rates of decline in poverty incidence over the past two decades. This paper examines empirically the factors that determine poverty among male-headed and female headed households as well as those that explain the gap in the poverty incidence between the two groups using a logistic regression model and a two-fold Blinder-Oaxaca decomposition technique respectively. Results indicate that factors that determine poverty among male-headed and female-headed households are similar but differ in terms of their effects. The two-fold Blinder-Oaxaca decomposition reveals that 61.7% of the poverty incidence gap is explained by differences in socioeconomic characteristics of male-headed and female-headed households whilst 38.3% is unexplained by these characteristics. The policy implications are discussed.
Source: Ghanaian Journal of Economics 2, pp 97 –118 (2014)More Less
This paper re-visits the old north-south migration discourse in Ghana by focusing on Nandom youth migrants in Accra. It explores the perspectives of resident Nandom youth migrants in Accra with emphasis on three key issues, namely perception, predisposing factors and impacts of their southern migration project on the Nandom community. Empirical field results show a multiplicity of factors undergirding the migration decision of Nandom youths in Accra. While both positive and negative perceptions emerge from the study regarding seasonal, long term and return migration of Nandom youths in Accra, the entire migratory project demonstrates a livelihood pursuit. Additionally, we identify a 'suitcase' of remittance types, the different kinds of remittance recipients and usages and also the conditions under which these migrants remitted. The discussion on remittances provides a platform for understanding the impact of their southward migratory project on the Nandom community.
The cost of urban water service delivery in Ghana : the case of the Kumasi and Accra-Tema water systemsSource: Ghanaian Journal of Economics 2, pp 119 –134 (2014)More Less
Rapid increase in water demand has necessitated water utilities in developing countries to maintain existing infrastructure to deliver services while extending services to the unserved population. Close attention to the two needs - keeping assets and reaching the unserved population, can be a difficult task. This study focuses on the cost of urban water supply of two biggest urban water systems in Ghana by examining the magnitude and relative magnitude of recurrent expenditure and the cost of extending services. The study is based on five-year historical cost data of the two water systems, Accra-Tema (AWSS) and Kumasi (KWSS). All costs were adjusted to 2012 US$ using the GDP deflators of the World Bank. The costs were determined in terms of cost per connection, cost per person served, and cost per cubic meter of water supplied. The dominant recurrent cost component is the operational expenditure (OpEx). Capital maintenance expenditure (CapManEx) levels represent 8% of fixed assets that key informants indicate was low due to backlogs of neglected maintenance, which was supported by relatively high levels of non-revenue water. The actual annual capital investments (CapEx-enh) are inadequate compared to expenditure levels required to achieve universal service coverage. The implication for the low current CapEx-enh levels is higher future capital investments to increase coverage especially to the unserved population. Unit cost in ATWSS was slightly lower than KWSS due to economy of scale. The costs details are discussed in relation to meeting universal coverage and maintaining assets for reliable service.
The relationship between economic growth and environmental sustainability : evidence from selected Sub-Sahara African countriesSource: Ghanaian Journal of Economics 2, pp 135 –153 (2014)More Less
Ensuring environmental sustainability amidst the quest to stimulate growth in Sub-Saharan Africa (SSA) remains an issue of great concern. In spite of this, the evidence for SSA is sparse, both at the theoretical and empirical level as literature has not adequately interrogated the effects of economic growth processes on the sustainability of the environment in SSA. Using a panel dataset from 1985-2010 covering 35 Sub Saharan Africa (SSA) countries, this study examined the environmental impact of economic growth and growth-enhancing factors such as trade openness, Foreign Direct Investment (FDI) and industrialization under the Environmental Kuznet Curve (EKC) framework. The environmental variables employed are CO2 emissions, Adjusted Net Savings (ANS) and energy consumption per capita. Employing the system Generalized Method of Moment, trade openness was found to reduce pollution/degradation through reduced CO2 emissions and energy consumption per capita while at the same time reducing environmental sustainability of SSA through reduced ANS. Industrialization was also found to unambiguously harm the environment while rapid urbanization is revealed to increase pollution/degradation through increased CO2 emissions and energy consumption. FDI is the only component found to be accompanied by a fall in pollution/environmental degradation through reduced CO2 emissions and energy consumption and a rise in environmental sustainability through increased ANS. Finally, while the Environmental Kuznet Curve (EKC) is confirmed for ANS and energy consumption, it is not established for CO2 emissions.
Author Nana Kwame AkosahSource: Ghanaian Journal of Economics 2, pp 154 –175 (2014)More Less
The paper examined the uncertainty and asymmetric effect of the dollar/cedi exchange rate using GARCH family models and the monetary policy implications of such uncertainties. The empirical results revealed that asymmetric and leverage effects were existent and persistent in the USD/GHS exchange rate such that negative news tends to exert a larger destabilizing effect on the volatility of exchange rate than positive news of the same magnitude. There is also a greater tendency for the volatility in domestic exchange rate to rise, largely driven by the continuous exchange rate depreciation. This study established that exchange rate volatility was remarkably restrained during the adoption of Heavily Indebted Poor Countries' Initiatives (HIPC) but has subsequently increased, following the adoption of inflation targeting (IT) in Ghana. The empirical results confirmed the effectiveness of interest rate (especially the interbank rate) in dampening the pass through of exchange rate volatility to inflation, albeit sluggishly, with a three-month policy transmission lag. The study therefore supports policy measures that rein in the rapid depreciation of domestic currency to help mitigate the upward bias in the volatility of USD/GHS exchange rate.
Author Franklin Obeng-OdoomSource: Ghanaian Journal of Economics 2, pp 176 –180 (2014)More Less
The 2008 Presidential and Parliamentary elections of Ghana were one of the most fiercely contested in the country. The elections ushered in the opposition National Democratic Congress (NDC) and drove out the ruling New Patriotic Party (NPP). The former was represented by the symbol of the umbrella and the latter by the osono or the elephant. The election was decided after three rounds because neither the first nor the second could determine a clear winner. Even after round three the difference between the victorious NDC, and the defeated NPP was a small margin: 50.277% to 49.77% of the valid votes cast, a difference of fewer than 41,000 votes.