Estimating An Aggregate Import Demand Function For Ghana

Stable Food Crops Turning Into Commercial Crops: Case studies of Teff, Wheat and Rice in Ethiopia  Imports are very crucial for the survival of a small open economy such as Ghana. In this paper, we estimate an import demand function for Ghana for the period 1970 to 2002, as well as consider the time series properties of the data. The time series behaviour of the data indicates a long term relationship between real exchange rates, GDP, and merchandise import. Our empirical estimates suggest that real income (GDP) is the main factor influencing imports in Ghana. The results also indicate that economic growth (real GDP) and depreciation in the local currency could stimulate increased demand for merchandise imports. Further analysis revealed that shocks to imports, real GDP and real exchange rate are important in explaining various innovations in the error variance of each of these variables at different time horizons and at different magnitudes. Particularly, the evidence shows that at short time periods about 65%, 95% and 80% of shocks to real exchange rates, merchandise imports and GDP respectively, are attributed to own shock

The Measurement and Determinants of Economic Efficiency of Microfinance Institutions in Ghana: A Stochastic Frontier Approach

Microfinance institutions have become central players in socio-economic development especially in developing countries. This paper investigates empirically the economic efficiency of microfinance institutions in Ghana using a Cobb-Douglas Stochastic frontier model. A total of 135 MFIs were sampled for the period from 2007-2010. The underpinning assumption is that there is a possibility for economies of scale in lending if only firms improve strategies of mobilizing savings and provide good quality service to their clients. The estimated results showed an overall average economic efficiency of 56.29%; indicating a high degree of inefficiency in the economic behaviour of the units in the industry. The study further exposed that age and savings indicators of outreach and productivity, and cost per borrower were significant determinants of economic efficiency. It is therefore recommended that practitioners improve upon technical training programmes, operate diversified savings products to improve on portfolio quality and ensure sustainability; and also heighten the extent of social commitment to both staff and client