The Trend and Impact of Balance of Payment on the Economy of Ghana. (2000-2005)

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Balance of payment has implications on growth of a nation's economy. Over the years, much has not been said about the trend and its impact of Ghana's balance of payment as regards the research by individuals. It is in this respect, that this project was carried out to assess the trend of the overall balance of payment of Ghana from the year to 2005. The research involved analyzing data on the components of balance of payment of Ghana and overall balance of payment for each of the years under review. It was evident from the study that Ghana recorded an overall balance of payment deficit in 2000 and 2004. High import price of crude oil, machines, foreign technology and other imported commodities might have contributed to the deficit. Fluctuation in the world price of Ghana's major export commodities (eg cocoa, gold etc) might have enhanced the recorded deficit. However, Ghana witnessed favourable balance of payment situation in the years 2001, 2002, 2003,and 2005. Fall in crude oil prices and other « imported commodities coupled with a rise in the world price of Cocoa and cocoa products, minerals and other export commodities of Ghana had impacted positively on the balance of payment during the period. In general, Ghana recorded a surplus and favourable balance of payment position over most of the five year period reviewed. This could be an important clue as to what the country should expect in terms of economic growth, in every five years, if the various factors influencing balance of payment position shift and remain in favour of the country. The researcher used the secondary method of data collection to obtain information for the research.
A Thesis submitted to the Dep artment of Accounting and Finance Kwame Nkrumah University of Science and Technology In partial fulfilment of the requirements for the degree Of Master of Business Administration (Banking and Finance) KNUST School of Business College of Art and Social Sciences, 2008