Determinants Of Private Investment In Ghana

Despite efforts made by the government of Ghana to encouragernprivate investment, private investment ratios have remained veryrnlow and unstable during and after the ERP. Yet for Ghana to havernhigh and sustained real per capita income growth, investment,rnparticularly private investment, will have to rise above currentrnlevels. This thesis employs time series techniques to investigaternrnThe determinants of private investment in Ghana. The findings arernthat, in the long run, credit available to the private sector andrnreal GDP have positive influence on private investment, but realrnlending rates and public investment negatively influence privaterninvestment. In the short run real GDP was not significant, butrnreal per capita income growth rate was found to have a positivernimpact on private investment. Stationary tests carried out withrnthe ADF and DF tests reveal that the Private Investment seriesrnhas a permanent memory.

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