This study investigates the effects of trade and trade facilitation on economic growth in Africa. To do so, we measure trade facilitation by means of three indicators, namely trade, export and import related costs, constructed by using principal component analysis. These indicators, in addition to several policy‐relevant variables, are used as exogenous variables to estimate an augmented growth model which, with the aid of a dynamic system GMM estimation technique, properly addresses potential endogeneity concerns. The findings suggest that trade facilitation serves as an important channel through which trade affects economic growth.

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This paper investigates the long-run impact of foreign direct investment and trade openness on economic growth in Ghana (1970Ghana ( -2011 within the framework of the endogenous growth literature. Adopting the autoregressive distributed lag bounds testing approach to cointegration the results suggest that the interaction of foreign direct investment and exports has been crucial in fostering growth, thus validating the famous Bhagwati hypothesis. From a policy oriented point of view, the study recommends the channeling of foreign direct investment to export-oriented sectors and the promotion of export-led growth strategies in long-term development plans.

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Purpose The purpose of this paper is to examine macroeconomic determinants of interest rate spreads in Ghana for the period 1980-2013. Design/methodology/approach The autoregressive distributed lag bounds test approach to cointegration and the error correction model were used for the estimation. Findings The results indicate that exchange rate volatility, fiscal deficit, economic growth, and public sector borrowing from commercial banks, increase interest rate spreads in Ghana in both the long and short run. Institutional quality reduces interest rate spreads in the long run while lending interest rate volatility and monetary policy rate reduce interest rate spreads in the short run. Research limitations/implications The depreciation of the Ghana cedi must be controlled since its volatility increases spreads. There is a need for fiscal discipline since fiscal deficits increase interest rate spreads. Government must reduce its domestic borrowing because the associated crowding-out effect increases interest rate spreads. The central bank must improve its monitoring and regulation of the financial sector in order to reduce spreads. Originality/value The main novelty of the paper (compared to other studies on Ghana) lies on the one hand; analysing macroeconomic determinants of interest rate spreads and, on the other hand, controlling for the impact of institutional quality on interest rate spreads in Ghana.

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Abstract:There is ample evidence from economic growth literature that investment accelerates economic growth and development of developing countries, of which Ghana is not an exception. Based on this, recent growth and development policies in Ghana have focused more on encouraging private sector investment through the development of the financial sector. This paper investigates the short-and long-run impact of financial development on private investment in Ghana for the years 1970-2014. Additionally, to find out whether the measurement of financial development matters for private investment, several indicators of financial development are used. The results, based on the ARDL bounds testing approach to cointegration, suggest that financial development has not been a key driver of private investment in the long run, while, in the short run, the effect of financial development on private investment depends on how financial development is measured. Given these results, policy makers should be circumspect regarding the choice of financial development indicator used as a policy instrument in the design and implementation of private investment policies for Ghana.