Rethinking the Emergence of Dutch Disease Narrative in Ghana Economy: A Necessity to Avoiding Oil Miracle Turning to Debacle

The debate on why some countries that are blessed with mammoth natural resources such as gold, bauxite, diamond, and oil for example to have the tendency of performing woefully in their economic growth has been ongoing for decades. However, the most recent discovery of oil and natural gas in some countries in Africa including Ghana has intensified the debate around the Resource Curse thesis. As a result, there have been concerns about Ghana not becoming a victim of Resource Curse (RC) like Nigeria, Serial Leone and other resources abundant African countries that regardless of the fact that natural resources exploitation is not an alien phenomenon in Ghana. However, the competing debate on whether Ghana is already suffering, not suffering or can escape the Resource Curse make is imperative to examine the economic situation pre and post oil discovery to ascertain the possibility of Ghana not falling to victim to RC. We are asked two questions to understand the extent the variables of Resource Curse from the structuralist and institutionalist economics have effects on the Ghana economy at the advent of oil discovery in commercial quantity in Ghana and how can Ghana economy avoid becoming a victim of Resource Curse?. The findings revealed that the variables that structural economists argued that will cause Dutch Disease has not yet prevailed in Ghana, and although, the volatility of Terms of Trade, price of commodities, and Real Exchange Rate had impact on the economic growth of Ghana but did not find any correlation with hindrances in the export diversification. The study however argued that the panacea to the effect of these variables on the economy growth of Ghana is intertwined with policy response of Ghana to mitigate the effect. In conclusion, we argued that the oil discovery come at a time that Ghana seems to be better equipped, both with tools and historical know-how, to avoid past mistakes. This is something the neighbouring countries such as Nigeria and Serial Leone did not have when diamond and oil were discovered in the countries.