Export Efficiency and Diversification in Ghana

Ghana needs to expand its export base in order to generate sufficient foreign exchange earnings for economic transformation. There is, therefore, a need to examine the efficiency of the existing export basket and explore new products to add to it. This study employs the stochastic frontier gravity model to investigate the efficiency of bilateral exports of Ghana using a panel of 44 export destination countries for the period 2000 to 2018. In addition, a product space analysis is carried out to ascertain which other products Ghana has to diversify into in order to engender the transformation required for the attainment of Sustainable Development Goal 8. As a third objective, the study investigates the extent to which Ghana can leverage the African continental free trade area for its diversification agenda. The study finds that Ghana's bilateral export trade is inefficient, implying huge potential exists. It further reveals that Ghana's economic complexity is low, leading to the production and export of primary commodities. Moreover, the African continental free trade area offers an opportunity for Ghana to crystalise its export diversification drive. It is recommended that Ghana takes advantage of its membership of trade blocs to negotiate access to foreign markets, improve on logistics, enhance macroeconomic stability, step up vocational and technical education, and increase investment in land and reliable, cheap electricity in order to grow its exports.