Determinants of the Output of the Manufacturing Industry in Ghana from 1974 to 2006

In this paper it was sought to ascertain the determinants of manufacturing output in Ghana based on available data from 1974 to 2006 using cointegration and error correction model analysis. The measure of the output of the manufacturing industry was the share of the total economy attributed to the manufacturing industry based on the value added to the gross domestic product. The paper shows that the level of output of the manufacturing industry was driven in the long run period by the level of per capita real gross domestic product, the export input ratio and political stability. In the short run period , the level of output of manufacturing was driven by export-import ratio and political stability. The importance of the export-import ratio variable in affecting both long run and short run manufacturing output suggested that increasing level of manufacturing in Ghana would partly depend on the growth of export based manufacturing firms.