Exchange Rate Volatility and Employment Growth in Ghana’s Manufacturing Sector
Michael Mensah, Dadson Awunyo-Vitor, Henry Asare-Menako

Abstract
The study aimed at determining how employment growth in the Ghanaian manufacturing sector is affected by the fluctuating exchange rate. The data was obtained from World Bank development indicators’ and the Ghana Statistical Service as well as the state of the Ghanaian economy. The study employed Ordinary Least Squares (OLS) regression technique to examine the effect of exchange rate volatility on employment growth. The study revealed that exchange rate volatility has effect on employment growth in manufacturing sector firms in Ghana. That is the depreciation of the Ghanaian currency against US Dollar significantly slows the rate of employment at the manufacturing sector in Ghana. Similarly, interest rate has a negative relationship with employment growth in the Ghanaian manufacturing sector. However, Gross Domestic Product (GDP) exhibits a positive relationship with employment growth. Through the prudent management of exchange rate, employment in the manufacturing sector can see a significant growth. Hence, policy makers should liaise with Monetary Policy Committee of the Bank of Ghana which set base rate and bankers to use the interest rate as a tool to facilitate employment growth in the manufacturing sector.

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