The Ghana Statistical Survey (GSS) has indicated that, 46.1 percent of business establishments reduced wages for 25.7 percent of their workforce.
According to its latest Business Tracker Survey, the findings reveal that, Ghanaian businesses are affected through a multiplicity of channels (demand shocks, supply shocks, financial shocks and continued uncertainty) and expect continuing impacts in the future.
“In the short-run, policies that support firms in managing financial shocks can be expected to be beneficial, including increasing awareness of current schemes”.
It further noted that firms closings totaled, 35.7 percent during the partial lockdown, with 16.1 percent continuing to be closed after the easing of the lockdown, “with firms in the accommodation and food sector being the most affected (24.0 percent had to close)”.
“46.1 percent of business establishments report that they reduced wages for 25.7 percent of the workforce (an estimated 770,124 workers). Only 4.0 percent of firms indicate that they have laid off workers, corresponding to 1.4 percent of the workforce (an estimated 41,952 workers)”.
The pandemic brought in its wake the increased usage of digital solution as “more than a third of firms (37.5 percent) started or increased their use of mobile money, and about a tenth of firms (9.0 percent) started or increased their use of internet to do business”.
Similarly, only 3.5 percent of firms report that they received government assistance, with “not being aware” of government programs indicated as the most common reason.
Business confidence, which also gained precedence in the survey reported that, firms report substantial uncertainty in future sales and employment, with average expectations of declines of 24 percent of sales and 15 percent of employment in the worst-case scenario.
GSS posits that, to better comprehend the impacts of COVID-19 on the private sector, they collaborated with UNDP and the World Bank, and interviewed 4311 business establishments and household firms.
“These firms were sampled from the 2013 Integrated Business Establishment Survey (IBES) and the 2017 Ghana Living Standard Survey (GLSS), supplemented with listings of SMEs provided by the National Board for Small Scale Industries (NBSSI) to ensure inclusion of recently founded firms”.
Following the global spread of COVID-19 and the arrival of the first cases in Ghana, the survey maintains the partial lockdown forced many businesses to close, while even those firms not affected by the lockdown measures found themselves with fewer customers and orders.
“Firms also had increased difficulties in sourcing inputs and found it difficult to cover revenue shortfalls”.
The Ghana Statistical Survey further cited policies are needed to support firms both in the short and in the medium term. The decrease in demand as well as difficulties in financing cash shortfalls puts many firms in a difficult position. Firms report that measures improving liquidity (subsidized interest rates, cash transfers and deferral of payments) are the most desired policies. However, at the same time only few firms (3.5 percent) report that they had received support.
“Many firms indicated that they were not aware of support programs, suggesting the need for increased awareness and clarity on the guidelines and requirements of current programs”.
As part of policies suggested by the survey, it stated that, in the longer term, policies that increase customer and business confidence as well as “help reestablish broken supply channels and assist firms adjusting to the new reality (e.g., by leveraging digital technologies) can be expected to help businesses recover from the shock”.
