Structural Adjustment Programme, Deforestation and Biodiversity Loss in Ghana

An empirical investigation is undertaken into the impact of the Structural Adjustment Programme (SAP) on Forest and biodiversity loss in Ghana between the period 1965-1995. In the first part of the analysis, a four-equation recursive model, consisting of forest loss, cocoa land, maize land and timber production equations, is employed to examine the impact of the SAP on forest loss. The first equation is a function of the last three, and the last three are functions of mainly prices. Piecewise linear and switching regression approaches are used to distinguish between the influence of the post from the pre-adjustment impacts. These results together with a specie-forest area relationship are used to investigate the impact of the SAP on biodiversity loss. The overall results indicate that cocoa land expansion and timber production, but not maize land expansion, are the significant causes of forest loss in Ghana. However, the impact on forest loss in the post adjustment period was reduced. The rate of biodiversity loss also reduced in the post-adjustment period. Changes in relative output and input prices due to the SAP may have played a significant role in the reduced impact of agricultural and timber related deforestation and biodiversity loss in the post-adjustment period