ABSTRACT
Free trade is considered the ―royal highway for enhancing
economic growth and decreasing the incidence of absolute poverty. Developing
countries including Ghana have therefore made several efforts to enhance their
trade flows. However, Ghana is still experiencing low export performance and
hence its persistent balance of payments deficit.
Also, there is a lot of gender inequality in
terms of employment, property ownership, education among others in Ghana even
though females make up about 51.2% of the total population. How does gender
inequality impact on trade in Ghana? Does Ghana stand a chance to gain from
trade by taking advantage from its relatively abundant female labour force?
This study seeks to answer these questions by examining the impact of
gender inequality on trade in Ghana using the ARDL model for the period 1980 to
2013. The empirical results reveal that; female employment, male employment and
male education positively affect trade. Also, gender inequality in education
has a negative impact on trade. The study therefore recommends that, policy
makers should make policies that are favourable for more female employment
since female employment affects trade more than male employment. Also, girl
child education policies should be intensified to promote female education and
reduce gender inequality in education since a reduction in gender inequality in
education promotes trade. More so, when male education is increased in the
short run, it has the tendency to decrease trade but in the long run it
increases trade, therefore policy makers should consider such policies which
will generally be beneficial in terms of trade.
CHAPTER ONE
INTRODUCTION
1.1 Background Study
Trade is the economic exchange of
goods and services and can happen nationally or across international borders or
territories in a legal fashion. A country‘s trade with other countries comprises
the imports and exports of goods and services of the country. Free trade is
considered the ―royal highway‖ for enhancing the growth of an economy and
decreasing the incidence of absolute poverty (Papyrakis et al., 2009;
Tran-Nguyen, 2004; United Nations Inter‐Agency Network on Women and Gender
Equality [IANWGE], 2014; Von Hagen, 2014; Zeray, 2015). This is because the
expansion of trade is an opportunity for economies to allocate resources more
efficiently, exchange of knowledge, transfer of technology and enhance
productivity and employment levels including the development of human and
physical capital (Papyrakis et al., 2009; 2012; Tran-Nguyen, 2004). This will
lead to livelihood sustainability for all (i.e. men and women) and hence reduce
the incidence of absolute poverty in the economy (IANWGE, 2014; Von Hagen,
2014). Exports trade generate the foreign exchange necessary to increase the
import capacity of the country, boost its industrialization, expand countries
markets and take advantage of economies of scale and overall economic
activities, which in turn, augments its economic growth.
Statistically, trade accounted for
25% of world gross national product in 1970, rising to about 45% as at 1995
(Fontana et al., 1998). Openness to trade (and FDI) has been key in the
economic success of countries in East Asia (e.g. Taiwan, Korea, Singapore,
Thailand, Hong Kong, Indonesia and
Philippines) (Seguino, 2000b; Bonuedi, 2013; Papyrakis et al., 2009; 2012).
The Washington Consensus on policy
reform measures, the IMF and the World Bank prescribe for ailing economies to
adopt trade liberalisation (Papyrakis et al., 2009; 2012; IANWGE, 2011).
Countries have therefore undertaken several efforts to enhance their trade
flows. Consequently, the establishment of the World Trade Organization, tariff
reductions, the construction of free-trade zones (ECOWAS, EU-EEA, NAFTA),
reducing capital controls, internal infrastructural building, foreign direct
investment (FDI) attraction, and institutional quality have all been considered
with the aim to increase national capacity of trade and the global capacity of
trade as a whole (Papyrakis et al., 2009; 2012).
However Africa still experience low
export performance. These therefore call for the investigation of other drivers
of trade. Gender inequality affects expansion of trade and specialisation in
particular commodities (Tran-Nguyen, 2004; Busse and Spielmann, 2005; 2006;
Randriamaro, 2012; Suranovic, 2010; IANWGE, 2011; Von Hagen, 2014). Gender
equality refers to the equality between women and men, girls and boys, in all
aspects of life including education, health, nutrition, access to economic
assets and resources, political opportunity and freedom from coercion and
violence, otherwise is gender inequality (UNCTAD, 2014). According to Cagatay
(2001), when there is gender inequalities over the control of resources like
land, credit and skills, it does not only prevent women‘s ability to make the
most of new opportunities brought about by the liberalization of trade, but it
also limit the output response and export volume of the economy as a whole.
Considering two countries with comparatively more labour force, an increase in the labour supply as
a result of a rise in the labour force of females and/or males in just one
country would improve its comparative advantage in labour-intensive products
according to the Heckscher–Ohlin (H-O) trade theory (Busse and Spielmann, 2005;
2006; Suranovic, 2010). It is therefore not surprising that over the last few
years, attention on the gender aspects of trade amongst policy makers and civil
society is on the rise (Randriamaro, 2012; Busse and Spielmann, 2005; 2006;
Suranovic, 2010; Von Hagen, 2014).
Ghana, like any African country has
made trade promotion a central policy since 1956. Reforms implemented under the
Economic Recovery Program (ERP) and Structural Adjustment Policy (SAP) such as,
the trade restrictive, import-substitution development strategy of the 1960s
and 1970s was replaced by a more liberalized, outward oriented and export-led
growth strategy, with serious governmental efforts towards diversifying and
broadening Ghana‘s export base into non-traditional items like handicrafts,
pineapples, canned, yams and smoked fish, processed foods, and wood products
(Bonuedi, 2013) where female productivity is believed to be high. The openness
of Ghana‘s external sector, measured by the share of export and imports in GDP,
kept fluctuating since 1982; from 60% in 1982 to 46% in 1992, to 116% in 2000
and then to 75% in 2010 (World Development Indicators [WDI], 2015). In 2013,
export as percentage of GDP is 42.35% as against import as percentage of GDP is
47.44%. However, it has been difficult in spurring exports growth over the
growth in imports, leaving the balance of trade in deficits for most of the
years between 1982 and 2014.
Among the different factors
affecting trade openness, the relationship between trade and gender inequality
warrants particular attention. Also as Ghana aspires to improve its middle-income status with an annual
increase in real growth rate there is the need to explore other drivers to
expand the volume of Ghana‘s trade by considering the effect of gender
inequality on trade to boost the pace of the nation‘s economic growth.
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