Ghana among strong emerging economies in sub-Saharan Africa – Dr. Damba

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

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

Dr. Damba disclosed 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 held in Kahramanmaras, Turkey.

The presentation assessed best investments options within the cocoa and gold sectors, given a fluctuating world crude oil price and 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 cedi’s performance against the US dollar 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 presents the best option for investments even 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 while exploring alternative sources of energy for transporting and processing.