Import Demand and Economic Growth Analysis in Ghana

Abstract

The study has revealed that import trade plays a significant role in Ghana’s economic growth. The trend analysisof volume of imports, quality of imports and import elasticities over the study period suggests that import tradecontributes to economic growth as evidenced by increased imports of intermediate and capital goods. Thenormalized equation from the Johansen Co-integration methodology established a long-run relationship betweenimports trade, income, foreign reserves, exchange rate and domestic price. The study recommends the use ofimport tariffs and nontariff measures as policy instruments to influence import of raw materials in the medium tolong-term. Such trade policies should aim at optimization of import structure towards economic growth anddevelopment.

Keywords: Keywords: Import Demand, Growth, Elasticities, Co-integration, Granger Causality, ImpulseResponse.