The Impact of Maize Trade on the Development of the Maize Industry in Ghana

Abstract

This paper examines the impact of maize trade on the development of the maize industry in Ghana using a time series dataset for 1980-2019. The study adopted the multivariate vector error correction model (VECM). We assess whether maize trade spurs development in the maize industry and hence economic growth. The study further examined whether other production variables such as fertilizer, machinery, and FDI efficiently stimulates development in the maize industry. The empirical analysis results suggest that maize trade and other variables positively impact the maize industry in the long run. Firstly, the results show that the import and export of maize positively impact maize productivity in Ghana, hence growth in the maize industry development in the long run. Secondly, the inputs of production including, Land, Machinery, Labor, have a long-run positive significant relationship with the development of the maize industry in Ghana. Thirdly, other production inputs such as fertilizer have a positive non-statically long-run effect on the maize productivity in Ghana. Based on these findings, we recommend that governments look into policy initiatives on the development of the maize industry. The policy initiatives should provide financial and non-financial incentives such as fertilizer and certified seed subsidies, complimentary service provisions on inputs, good agronomic practices. Also, marketing of outputs over an E-Agriculture platform, and reduce trade restrictions to maximize maize production.