Government Spending Multipliers in Ghana: A Local Projections Approach

ABSTRACT Research on fiscal multipliers in sub‐Saharan Africa is a largely unexplored topic, with few country‐specific studies. Consequently, it has typically been assumed that the region has low fiscal multipliers, based on evidence from other developing countries rather than direct empirical analysis. This paper aims to address this literature gap, by estimating and analysing the cumulative fiscal multipliers for government consumption and government investment in Ghana, using quarterly data from 2006Q1 to 2025Q4. The local projections methodology is employed. Results show that the economy of Ghana is responsive to fiscal stimuli: The 1‐year multiplier for government consumption is 0.89, remaining relatively stable at 0.84 over a 2‐year horizon. In contrast, the multiplier for government investment is never significant, a difference largely attributable to a higher import content of investments. However, when isolating the domestically financed component of public investment, we find evidence of a significant medium‐term effect: The multiplier is 0.73 (non‐significant) at the 1‐year horizon, rising to 1.79 after 2 years.

Authors

Institutions

Publication Details

Journal
South African Journal of Economics
Published
2026-05-27
DOI
https://doi.org/10.1111/saje.70026
Primary Topic
Fiscal Policies and Political Economy
Type
article
Field-Weighted Citation Impact
0.00
Controls
|||
ALL TIME
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
article

Government Spending Multipliers in Ghana: A Local Projections Approach

Gordon Newlove Asamoah, Francesco Saverio Luciani
South African Journal of Economics
Fiscal Policies and Political Economy
article

Government Spending Multipliers in Ghana: A Local Projections Approach

Gordon Newlove Asamoah, Francesco Saverio Luciani
article en

Abstract

ABSTRACT Research on fiscal multipliers in sub‐Saharan Africa is a largely unexplored topic, with few country‐specific studies. Consequently, it has typically been assumed that the region has low fiscal multipliers, based on evidence from other developing countries rather than direct empirical analysis. This paper aims to address this literature gap, by estimating and analysing the cumulative fiscal multipliers for government consumption and government investment in Ghana, using quarterly data from 2006Q1 to 2025Q4. The local projections methodology is employed. Results show that the economy of Ghana is responsive to fiscal stimuli: The 1‐year multiplier for government consumption is 0.89, remaining relatively stable at 0.84 over a 2‐year horizon. In contrast, the multiplier for government investment is never significant, a difference largely attributable to a higher import content of investments. However, when isolating the domestically financed component of public investment, we find evidence of a significant medium‐term effect: The multiplier is 0.73 (non‐significant) at the 1‐year horizon, rising to 1.79 after 2 years.

South African Journal of EconomicsVol. 94(2)
Bangor University (GB), Beal College (US), Sapienza University of Rome (IT)
Partnerships for the goals
Openalex Percentile: Top 3%
Fiscal Policies and Political Economy
AI Navigator

Ask Laika to Summarize, Analyze, and Connect papers live on the map.

Summarize Papers & Methodologies

Extract key findings, datasets, and comparative methods across publications.

Benchmark Rankings & Visual Analytics

Rank top research institutions, authors, funders, topics, and journals by Field-Weighted Citation Impact (FWCI) and paper volume with instant charts.

Connect Distant Disciplines

Bridge topological clusters on the map to find hidden collaborative intersections.