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The Economic Value of Environmental Capital Inputs Used to Produce the Gross Domestic Product in Ghana, 1993 to 2012

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  • Kwabena Asomanin Anaman
  • Felix Agyei-Sasu

Abstract

Ghana has been one of the fastest growing countries in the world over the last decade driven by exports of oil from newly-discovered offshore oil fields, the export of its traditional commodities of cocoa, gold and other extractive minerals, construction, and the expansion of services related to banking, information and communication technologies, and tourism. Measured by the change in real gross domestic product (GDP), the economy grew at a pace of 7.5% over the period from 2004 to 2013 and 8.6% from 2009 to 2013, and was among the top 15 performers in the world. The Ghanaian economy was formally classified as lower-middle-income in 2010 with a per capita income of over 1,300 United States dollars. Our study focuses on measuring the values of labour and capital inputs used to produce the goods and services incorporated in the GDP. We acknowledge the existence of two types of capital inputs used to produce final goods and services. These are (1) human-made or manufactured capital such as machinery and equipment and (2) environmental capital items such as proven oil and gas reserves, mineral deposits, forest and water resources that are required to produce final goods and services in the economy. We estimated the size of environmental or natural capital stock used to produce the GDP over the twenty-year period, 1993 to 2012 assuming that the economy as a whole exhibited a constant returns to scale feature. The results indicate that over the period, 1993 to 2012, the average share attributed to labour in the production of GDP was about 45%. Human-made capital inputs contributed on average about 19% of GDP. The remaining share of 36% was the estimated value of environmental capital inputs used to produce GDP. We also established that the aggregate environmental depreciation was significantly related to GDP in a positive log-linear fashion while its relationship to real interest rate was negative but not statistically significant.

Suggested Citation

  • Kwabena Asomanin Anaman & Felix Agyei-Sasu, 2014. "The Economic Value of Environmental Capital Inputs Used to Produce the Gross Domestic Product in Ghana, 1993 to 2012," Research in World Economy, Research in World Economy, Sciedu Press, vol. 5(2), pages 74-92, September.
    • Handle: RePEc:jfr:rwe111:v:5:y:2014:i:2:p:74-92
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    References listed on IDEAS

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    Cited by:

    1. Kwabena Asomanin Anaman & Gbensuglo Alidu Bukari, 2019. "Political Economy Analysis of the Macroeconomic Impact of National Elections in Ghana During the Fourth Republican Era, 1992 to 2016," Applied Economics and Finance, Redfame publishing, vol. 6(3), pages 28-44, May.
    2. Mohammed Muniru Abubakari & Kwabena Asomanin Anaman & Ama Asantewah Ahene-Codjoe, 2022. "Urbanization and Arable Land Use in Northern Ghana: A Case Study of the Sagnarigu Municipality in the Greater Tamale Area," Applied Economics and Finance, Redfame publishing, vol. 9(1), pages 68-84, December.
    3. Kwabena Asomanin Anaman & Gbensuglo Alidu Bukari, 2021. "Voter Turnouts in Presidential Elections in Ghana: A Political Economy Analysis Using District-Level Data," Applied Economics and Finance, Redfame publishing, vol. 8(1), pages 13-31, January.
    4. Kwabena Asomanin Anaman & Gbensuglo Alidu Bukari, 2019. "Political Economy Analysis of Voter Participation and Choices in National Elections in Ghana¡¯s Fourth Republican Era," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(3), pages 174-198, December.

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