Trade and payments regime and the balance of payments in Ghana

Abstract

By 1982 the Ghanaian economy was in the doldrums, facing a severe foreign exchange constraint. This state of the economy was attributed partly to the trade and exchange rate policies which had created distorsions and disincentives against exporting in particular and production in general. Since 1983 Ghana, has, for the second time, embarked on a trade and payments liberalization program. This study examines the effect of the changing trade and payments regime on the balance of payments of Ghana. It provides some answers as to why the first liberalization episode was not sustained. It also contrasts the experience of controlled and liberalized trade regime episodes. The paper concludes by providing some lessons from the Ghanaian experience.