Crude oil production, quality institutions, capital accumulation and economic growth in Ghana

Abstract

The study examined the effect of crude oil production, quality institutions and capital accumulation on economic growth in Ghana spanning from January 2011 to December 2018 using the Nonlinear Autoregressive Distributed Lag (NARDL) approach to cointegration. The empirical findings revealed that the expected positive economic multiplier effects of commercial crude oil production in the form of more local employment with high incomes as well as more substantial local business participation has not yet been actualized and hence the resource curse effect is pronounced valid in Ghana. Also, the required capital accumulation and institutional capacity is at a level insufficient to complement the production of crude oil to cause economic expansion and reverse the resource curse. Based on these findings, it is therefore recommended that the institutions of state that oversee crude oil production and other expediencies related to crude oil production should be resourced to ensure efficient capital accumulation and to allow for sustainable economic growth