Effects of real exchange rate and gross domestic product on yam exports in Ghana

Abstract

The objective of this paper was to evaluate the responsiveness of Ghana’s fresh yam export supply to real exchange rate and national income (GDP) with the use of time scries data from 1990 to 2004. Data collected from various secondary sources were fitted into econometric models in linear, semi-log and double-logarithmic functional forms by employing the Ordinary Least Squares (OLS) method. The study found that generally, there has been an increasing trend in Ghanaian yam production and export levels at average annual growth rates of 18% and 17% respectively. Real exchange rate and per capita GDP were found to significantly (P<0.05) influence annual yam exports positively. Yam export was found to have an inelastic response to changes in real exchange rate and GDP per capita. The government of Ghana should formulate and implement policies that will lead to prudent exchange rate management and substantial expansion of the economy so as to boost yam exports to generate foreign exchange earnings to fuel the country’s socio-economic development.