Ghana’s economy emerging in Sub-Saharan Africa – Dr. Damba

Dr Osman Tahidu Damba, making a presentation

Dr. Osman Tahidu Damba, a lecturer, at the Faculty of Agribusiness and Communication Sciences, University for Development Studies (UDS) said, Ghana is one of the emerging economies in Sub-Saharan Africa due to its continuous economic performance.

He said, the cocoa and gold business sectors were the major drivers of Ghana’s economic growth and have been identified by potential investors as the best options for portfolio allocation.

Dr. Damba revealed this in a presentation made on: “Options Market for Ghana’s Investment Drive: A Volatility Transmission and Hedging Approach” at the 13th National Association of Agricultural Economists Conference, Kahramanmaras, Turkey.

The presentation

The presentation assessed the best investments options among the cocoa and gold sectors within a fluctuating world crude oil price and the continuous weakening of the domestic currency against the US dollar.

Its findings confirmed that with unstable oil prices, the agriculture and mining sectors are directly influenced by the performance of the Ghana cedi against the US dollar. This is due to the stock market coupled with transportation and production costs.

This he said is evident from the significant shocks and volatility transmissions from effective exchange rates alone and in combination with other sectors to cocoa, gold and crude oil prices, adding, “oil combines with other sectors to transmit shocks and volatilities to other sectors.”

Dr. Damba who is at the Department of Climate Change and Food Security said, cocoa presented the best option for investments compared to gold.

According to him, this is attributed to improved premium prices for Ghana’s cocoa, adding that, the oil sector should be an integral part of a diversified portfolio of assets since Ghana has started drilling oil and increased volatility is expected with time.

He noted that the oil sector will enhance risk adjustment of the hedged portfolios and that Ghana’s government should continue with private-public partnerships of exploring alternative sources of energy for transporting and processing.

By Wisdom Jonny-Nuekpe