Comparative Analysis of the Contribution of the Agricultural Sector to the Gross Domestic Product of Ghana: Before and Within COVID-19 Pandemic

International Journal of Research and Scientific Innovation (IJRSI) | Volume IX, Issue VI, June 2022 | ISSN 2321–2705

Comparative Analysis of the Contribution of the Agricultural Sector to the Gross Domestic Product of Ghana: Before and Within COVID-19 Pandemic

Christiana C. Nyarko, Michael Affam, Samuel K. Obeng
University of Mines and Technology, Tarkwa, Ghana

Abstract: This paper seeks to analyse the trend of contributions of the Agriculture sector to the GDP of Ghana. A Time Series analysis was used to forecast the quarterly contributions of the Agricultural sector to the Gross Domestic Product (GDP) of Ghana from 2008 to 2019. The paper also compared contribution of the agricultural sector to the GDP before and during the COVID-19 era using data ranging from first quarter of 2018 through to third quarter of 2020 in millions of Ghana cedis from the Ghana Statistical Service. Results indicate that ARIMA (2, 1, 2) model was found to be the most suitable model with the least Normalised Bayesian Information Criterion (BIC) and Akaike Information Criterion values. It was further observed that the two – year forecast values of the model shows an increase in the subsequent years to the GDP of Ghana. However, due to the COVID-19 pandemic, the GDP from the Agricultural sector dwindled from 15,569.5 million Ghana cedis in the first quarter of 2019 to 12,080.10 million Ghana cedis in the second quarter of 2020. The differences between the first and second quarters from 2018 to 2020 were statistically significant at 95% confidence level. Although it picked up in the third quarter of 2020, it was just slightly higher than what it used to record pre-COVID-19 era.

Keywords: GDP, ARIMA, Agriculture sector, BIC, COVID-19

I.INTRODUCTION

Gross Domestic Product (GDP) is a term initiated by Simon Kuzetz in the 1930’s as a way to measure a country’s economic growth (Grytten, 2020). It sets a value on a nation’s production, the wealth of a country and it is divided by the population in the country (Brodny and Tutak, 2020). GDP covers buyer spending, investment consumption, government expenditure and net exports, which shows an extensive picture of an economy and gives knowledge on the pattern of an economy by considering the GDP levels as an index (Collinao et al., 2021). Estimation of GDP gives the general strength of the economy. It serves as an indicator by most governments and economic leaders for planning and policy making. Gross domestic product helps financial analysts by giving them direction about the condition of the economy. A declining GDP shows signs of economic instability (Phan et al., 2021). At the point where the GDP improves, economic development also increases. When GDP development rate turns negative, the nation’s economic strength begins to collapse (Eregha & Mesagan, 2020). Without an increase in GDP, there will certainly be weaknesses in economic development (Eregha and Mesagan, 2020).

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