Abstract

This study investigates the impact of oil and non-oil revenue on Ghana's economic growth from 2010 to 2023 using quarterly data and the Autoregressive Distributed Lag (ARDL) model. The analysis reveals that non-oil revenue significantly drives economic growth in both the short and long run. Specifically, a 1% increase in non-oil revenue leads to approximately 1.22 and 1.93% increases in gross domestic product (GDP) in the short and long run, respectively. In contrast, oil revenue has a negative but statistically insignificant effect on economic growth, suggesting challenges in harnessing oil wealth for sustainable growth. The study also finds that debt positively influences long-run growth, although sustainability concerns persist, while inflation negatively affects growth, emphasizing the need for price stability. The Granger causality tests show a unidirectional causality from economic growth to oil revenue, with no causal link between non-oil revenue and growth. The findings underscore the importance of economic diversification, efficient oil revenue management, and fiscal discipline for sustaining growth. Based on these results, policy recommendations include strengthening non-oil sectors, enhancing transparency in oil revenue allocation, and maintaining macroeconomic stability to promote sustainable economic growth in Ghana.

Key words: Oil revenue, non-oil revenue, economic growth, autoregressive distributed lag (ARDL) model, Ghana.