With over 3 millions cases worldwide, the COVID-19 pandemic has impacted every economy in the world. Ghana is waging war against the deadly COVID-19’s assault not only on public health, but also on a national economy that was among the fastest growing in the world. As it tries to protect livelihoods as well as lives, the central government faces a daunting task of restoring international and domestic trading and investments.
To soften the economic impact, President Nana Akufo-Addo on April 20 lifted the lockdown in the two largest cities of Accra and Kumasi, urban areas hardest hit by the coronavirus. Ghana is the first African country to ease restrictions, however, border shutdowns continue. As of April 24, only 10 deaths and 1,279 cases have been reported, but those numbers change daily.
JoyOnline reported that before the pandemic the World Economic Forum had predicted Ghana’s economy would be the fastest growing in the world. At the close of 2019, Ghana was winding up three years of solid growth averaging seven percent annually. The World Bank’s projection for 2020 was 6.8 percent. Ghana’s finance minister now expects a 2.5 percent growth in GDP.
Coronavirus sickens oil and cocoa export trade
Ghana’s petroleum industry – about 20 percent of export revenues – has been knocked on its heels by the combined effect of COVID-19 and a production war in March between Russia and Saudi Arabia. Average crude oil prices plunged from 62.60 USD per barrel to 22.90 USD before it was settled in early April. Since then, prices have tumbled even more to unprecedented levels. With the current glut of oil supplies worldwide and the recent plunge in crude prices, prospects for a quick recovery in this sector are dim.
Also being pummeled by the pandemic is the nation’s biggest export commodity, cocoa. Ghana is the world’s second largest producer of cocoa. The CEO of the Ghana Cocoa Board, Joseph Boahene Aidoo, said the fall in cocoa prices so far this year has already cost the country $1 billion. However, Aidoo told JoyBusiness that he is securing international funding to finance production and purchases for the 2020/21 growing season.
Imports also have fallen dramatically. The decline in volume and value means a shortfall in badly needed tax revenues. The country’s deficit is expected to climb from GHS 18.9 billion ($3.3 billion) to GHS 30.2 billion ($5.2 billion).
Domestically, all sectors -- agriculture, mining, tourism, energy production and services -- are taking a serious hit. The virus also is battering the so-called “informal sector”, which comprises small to medium-size retail traders, artisans, casual wage workers, street vendors and some contract employees. Representing an estimated 86 percent of the national workforce, this sector is characterized by low income.
Steps by the government to stem the effects of COVID-19 so far include subsidizing utilities for households and businesses, free transportation for healthcare workers and direct assistance to low-income communities. Health officials have mounted an effort to provide COVID-19 testing for the entire population.
Coronavirus impacting stock trading in Ghana
At the start of December 2019, trading in Ghana was at its peak. The first quarter reached unprecented high level for Ghana's trading activities and economy. However, since the beginning of the pandemic, Ghana's Stock Exchange has seen a decrease in their trading activities due to the Bank of Ghana measures to stop banks from paying dividends to shareholders. Trading activities and Ghana’s Stock Exchange however continued to run during the partial lockdown of the country. The GSE has hit the lowest levels in 34 months and trading activities have remained low throughout March and April. Those measures were taken in order to support all customers throughout the COVID-19 pandemic. However, this has impacted the country's economy, with a decrease in investments and investors losing their money on companies that have now collapsed due to the coronavirus pandemic.
Ghanaians hopeful of early win in the COVID-19 fight
The government is simultaneously fighting disease and economic decline. Recent relaxation of its lockdown on major cities may help stir life into the sickened economy, even as expanded health services and testing helps combat the virus. The months ahead will reveal the likely outcome of this two-front war. However, the future remains uncertain. Ghanaians remain hopeful the war will be won sooner rather than later.