Natural resource dependence and economic growth in Ghana: the effect of oil production

The main objective of this paper is to examine the effect of natural resource dependence on economic growth in Ghana. The paper employs EDA technique to examine the extent to which the Ghanaian economy is dependent on natural resource exports and its implication for growth as well as how the production of oil which began in 2010 has affected the economy. Examination of export composition shows a heavy dependence on natural resource export dominated by gold, cocoa and recently crude oil which makes the economy vulnerable to price volatility. Reflecting on previous argument and examination of net barter terms of trade indicates that, as a resource-based commodity exporting country, the terms of trade has been volatile over the years. Production of crude oil has been associated with increased economic growth and human capital accumulation while recent slowdown in growth is attributable to falling crude prices.