The three-week partial lockdown imposed on some parts of the country as a result of the outbreak of COVID-19, as means of curtailing the spread of the virus, forced many organizations to take measures to prevent its collapse.
The measures included reducing staff working hours, cutting down wages, and in some cases, laying off some workers, particularly within the 3-week partial lock-down.
This report comes from the COVID-19 Business Tracker Survey which was conducted by the Ghana Statistical Service (GSS), in collaboration with the United Nations Development Programme (UNDP), and the World Bank from May 26 to June 17, 2020, to weigh the impact of the coronavirus on businesses.
In a statement issued by the Ghana Statistical Service, Government Statistician, Professor Samuel Kobina Annim noted that:
“Government has already put in place diverse supports for businesses including the establishment of a Coronavirus Alleviation Programme to protect jobs, livelihoods and support small businesses. And, also is the Government’s GH¢600 Million Stimulus Package to small and medium scale enterprises (SMEs). The findings of the Business Tracker provide specificity on the pathways of effects, variation in the effects for different categories of businesses, their geographical areas, and the extent of effects.”
The Business Tracker Survey also showed that about 770,000 workers representing 25.7% of the total workforce, had their wages reduced and about 42,000 employees laid off during the country’s partial lock-down. Again, the pandemic led to the reduction in working hours for close to 700,000 workers, all purposely to reduce further spread of the virus.
During this exercise, about 4,311 firms were interviewed. Also, the data showed that during the lockdown, about 244,000 firms began adjusting their business models by relying more on digital solutions, such as mobile money and the internet for sales. Firms within the agricultural sector and other industries used relatively more digital solutions, representing 56%, with establishments in the accommodation and food sector recording the least that adopted digital solutions with a percentage of 28%.
According to the Economic Advisor for Ghana and The Gambia, Fredrick Mugisha, who works with the UNDP, he also revealed that:
“If businesses, especially SMEs are provided with the needed support to adopt best practices, particularly in the use of digital solutions, this could go a long way to increase their productivity and resilience to future challenges”.
On a general perspective, the results indicated that during the country’s partial lockdown, businesses received shocks in the supply and demand for goods and services with close to 131,000 businesses faced with challenges accessing finance and expressed uncertainty in the business environment.
The average decrease in sales, according to the findings also suggested that it was estimated at 115.2 million Ghana Cedis, with firms in the trade and manufacturing sectors, including exporting firms, being the largely affected sector. Also, more than half of these firms had difficulties in sourcing inputs due to non-availability or increase in costs, leading to challenges in covering revenue shortfalls.
Although the lockdown has been relaxed, the survey result shows a high degree of uncertainty in the expectations of firms regarding sales and employment over the next 6 months.
On the side of the World Bank’s Country Director for Ghana, Liberia, and Sierra Leone, Pierre Laporte, he also stated that:
“The survey shows that COVID-19 has had a deep impact on Ghana’s private sector, through several channels. Firms are experiencing lower demand for their products, difficulties in accessing finance and sourcing inputs, and face an extended period of uncertainty. The World Bank is working closely with the Government of Ghana to mitigate these negative impacts and assist businesses to survive the pandemic and build resilience in the face of the changed economic conditions.”
Suggestions made by the survey
According to the survey, it suggested that to reduce the impact of the coronavirus, it said there was a need for policies to support firms in the short and medium-term. The most desired policies cited by the private sector include measures to improve liquidity such as subsidization of interest rates, cash transfers and deferral of tax payments. Many firms were not aware of the government’s support programs, hence, it suggested the need for increased awareness and clarity on the guidelines and requirements of current interventions.
The results of the survey also suggest that efforts should be concentrated on re-establishing channels that were adversely affected during the pandemic. These should include re-establishing supply chains by providing credit guarantee schemes for those accessing finance, facilitating input procurement, and access to foreign markets to boost demand.
The report also proposes support for firms with grants and business development services to upgrade technologies to increase productivity.
The Business Tracker Survey is part of a global Business Pulse Survey (BPS) initiative of the World Bank, surveying the impact of COVID-19 on the private sector in more than 40 countries.
