The role of the agricultural sector in Ghanaian development: a multiregional SAM-based analysis

Abstract

Ghana shows remarkable differences in employment and welfare between the southern and northern regions. The promotion of policy focus on the development of the northern regions requires the elaboration of specific databases describing the regional economies. Hence, this work outlines the construction of a Social Accounting Matrix (SAM) for Ghana for the year 2015 with a high disaggregation of sectors, household income groups and education levels across 10 administrative regions. Linear multisectoral models have been applied to this SAM to estimate socio-economic impacts of potential final demand policies down to a regional level in the Ghanaian economy. Further on, the structural path analysis is used to investigate the role played by different agriculture commodities in transmitting income to different types of households. The results allow for an identification of the most suitable sectors to be promoted due to their ability to generate the highest increases in output, employment and value added in the rest of the economy, as well as those with a significant impact on household income generation. As a result, the primary sector will play a key role in the economic and employment growth of the country. Notably, sorghum and millet, pulses, tobacco, cotton and fibres can be considered favourable crops for development in the Northern region.