The Ghanaian manufacturing sector 1991-1995: firm growth, productivity and convergence

The removal of high levels of protection combined with substantial real devaluations has changed the environment in which Ghanaian manufacturing firms have operated in the 1990s. The changes in output, composition and productivity, which have occurred over this period, are examined in this paper. Survey evidence for the growth of the sector is shown to be consistent with data from sales tax returns. Analysis of the panel survey shows that, in a comparative context, the rate of job creation in Ghana`s manufacturing sector is high. This rate is highest in medium sized firms; small firms have not grown more rapidly than larger firms. There has been no underlying growth in technical efficiency and output growth has been matched by a commensurate growth in labour and capital inputs. Labour productivity differs substantially by firm size due primarily to differences in physical, not human, capital endowments.