Businesses may need more time and support to recover from COVID-19, as 16000 estimated agribusinesses remain closed in Ghana - new survey reveals.
COVID-19 has affected almost all sectors of the economy and agribusinesses, which form an important part of the economy, have not been left out. New data on the impact of the pandemic on agribusinesses in Ghana suggest it may take a little more time and support for businesses to recover from the impact of the pandemic. The data reveal an estimated 16,000 agribusiness firms remain closed, with over 78,000 estimated staff laid-off and more than 267,000 workers having their wages reduced between May 2020 and January 2021.
The survey results released by the Ghana Statistical Service (GSS), funded by the German Ministry for Economic Cooperation and Development (BMZ) and implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, in partnership with the United Nations Development Programme (UNDP), collected data from about 8,000 agribusinesses across Ghana. The findings reveal an increase in the estimated number of job losses for agribusiness workers, from 51,111 during the lockdown to 78,412 in the post-lockdown period. In the same vein, workers with reduced wages increased from 175,255 during the lockdown period to 267,211 within May 2020 and January 2021.
“The Agribusiness Tracker builds on the COVID-19 Business Tracker and this is to enable us compare the data over time. This way, we are better positioned to inform Government and key stakeholders on the changes over time. We believe this panel data will guide the implementation of the Government’s Ghȼ100 billion COVID-19 Alleviation and Revitalization of Enterprise Support (Ghana CARES) Programme, seeking to enable the economy to recover”, noted Prof. Samuel Kobina Annim, Government Statistician.
The data also show slow demand for goods and services for most agribusinesses, with over 77,000 firms (61.5) reporting a decline in sales within the post-lockdown period under review. This implies that, though there is some improvement after the lock-down restriction (from 84,869 to 77,254 agribusiness firms reporting sales decline), agribusinesses are yet to recover to the level seen prior to the coronavirus pandemic. For example, sales growth was 30.2% prior to the pandemic, 10.7% during the lockdown and 15.4% after the lifting of the restriction.
Similarly, despite some improvement in inputs supply post-lockdown, about half of agribusiness firms (45.9%) still have challenges in getting supply inputs. The regional distribution shows that the Greater Accra region is the most impacted, with almost three out of ten firms (28%) reporting input supply challenges. Even though the drift in policy is relatively slow, as much as 8% of firms have started sourcing from domestic sources.
“Data is very critical in helping Ghana recover from the COVID-19 pandemic. This Agribusiness Tracker results will therefore help businesses in the recovery process, as the data will not only inform policy on building back better, but doing so inclusively”, noted Charles Abani, UN Resident Coordinator for Ghana.
However, there are some positive trends, as digital technology is beginning to play a significant role in the operations of firms, with almost 9 out of 10 firms leveraging digital platforms including social media to market their products. Similarly, mobile money and door-to-door delivery via courier services, and internet usage for business operations also increased, with about 8 in 10 firms (77%) increasing the use of the internet in marketing compared to 19% percent during the lockdown period.
It is heartwarming to know that using digital technologies to transform data into action is at the heart of Ghana’s COVID-19 response and recovery. It will be important to consolidate this gain through the effective implementation of the National Data Roadmap process to ensure equity and the protection of more businesses”, emphasized Dr. Angela Lusigi, Resident Representative of UNDP in Ghana.
Also, though increase in access to finance is yet to get to pre-pandemic level (22.5%), this has marginally increased from about 12% during the lock-down to 14% post-lockdown. Despite the slight increase, three in ten agribusinesses reported decrease in accessing finances mainly due to high interest rate.
The COVID-19 Agribusiness Tracker survey also enquired about the level of awareness among the firms on the African Continental Free Trade Area (AfCFTA) agreement, which is expected to provide a single market for goods and services in Africa. The findings suggest a low awareness level, with only one in four agribusiness firms knowing about the AfCFTA. The top three support the firms need to participate in AfCFTA include increased information on business opportunities, reduced cost of credit, and removal of policy or regulatory bottlenecks.
“Small and medium-sized businesses are the backbone of the economy. Agribusinesses especially, have great potential in Ghana with hard-working entrepreneurs needing support to un-lock their opportunities”, noted Regina Bauerochse Barbosa, Country Director GIZ Ghana.