Assessing Rice Market Competitiveness in the Greater Accra Region of Ghana

Abstract

Although Ghana has increased its rice production, it still relies on imported rice. The Ghanaian government has shown its concerns about this import dependency that may negatively influence the competitiveness of domestic rice. However, does the price of imported rice really affect that of domestic rice? This paper examines the price relationship between local rice and foreign one at markets in the Greater Accra region of Ghana. The study selected Makola and Tema markets, the two major markets in this most populated region of the country. For analysis, we used annual retail prices of local and foreign rice in the two markets from 2006 to 2015. The Granger causality model test was applied to examine the relationship between local and foreign rice prices. The Johansen co-integration test was used to test the long-term price relationships of local and foreign rice prices. The Granger causality test results revealed that the price of foreign rice does not have any significant influence on that of local rice. The result of the Johansen co-integration test confirmed the existence of a long-term co-integration between local and foreign rice prices.