文摘
Conventional wisdom holds that, without environmental benefits and revenue recycling, fossil fuel subsidies removal would lead to welfare losses. First, this study tests the usefulness of general equilibrium theory for validating these claims and draws similar conclusion. Subsequently, the model is readjusted to reflect simulation with two non-traditional policy options. This time, the results suggest that removing subsidies on fossil fuels would create opportunities provided that such is done in tandem with complementary policies. In particular, we show that a mix of ‘agricultural productivity improvement’ and a ‘reduction in trade transaction costs’ (at 15% in each case) would provide benefits for fossil fuel subsidies removal in Ghana. These results underscore the need for structural reforms in Ghanaian agricultural sector especially those aimed at promoting mechanized agriculture.