The Effect of Trade Liberalisations on Food Security in Ghana

ABSTRACT

The study examines the relationship between food security and trade liberalization in the context of Ghana using time series data from 1986 to 2016. The sum of imports and export over GDP is used as the key variable to measure the trade liberalization of the economy. Other than the key variable of trade liberalization, the study employs five variables namely food production index, consumer price index, real GDP, arable land, and reserve of foreign exchange to assess their effect on food availability which add to improve food security. The ARDL approach and the ECM were used to estimate the long run and short run effects of trade liberalization on food security respectively. The Granger causality test was also conducted to find the causal relationship between trade liberalization and food security. The findings indicated that trade liberalization positively affects food security both in the long run and short run. It also found a unidirectional causality from trade liberalization to food security implying that trade liberalization causes food security but food security does not cause trade liberalization. Moreover, with the exception of consumer price index and real GDP in the long run which have negative effect on food security, the other variables indicated a positive effect on food security in both the long run and short run. It is therefore, recommended that the Ministry of Trade and Industry should promote trade agricultural products especially food in order to improve the food security of the nation since more food can be made available through trade.