Businesses recovering from COVID-19 amidst few challenges - survey

Adnan Adams Mohammed
The second edition of Ghana's COVID-19 Business Tracker Survey has indicated that businesses are recovering from the impact of Coronavirus pandemic lockdown and its attendant’s effects.
The survey, conducted between August-September, revealed that many firms now fully re-opened but continue to report a decline in sales, difficulties in sourcing inputs, and challenges in finding financial resources to cover revenue shortfalls.
Businesses reported an average decline in sales of an
estimated 85.5 million Ghana Cedis (51.5 percent), but this is an improvement
compared to results from the first round Business Tracker, carried out in
May/June, which reported an estimated decline in sales of 115.2 million Ghana
Cedis (61percent).
“The COVID-19 Business Tracker is one of the three COVID-19 impact studies being carried out by GSS with nationally representative samples. The results from this second wave of the Business Tracker Survey aim to provide critical information in monitoring the effects of the pandemic on businesses”, noted Professor Samuel Kobina Annim, Government Statistician.
The findings show a decline in sales continuing to impact on
employment and the operating model of firms. Despite improvements over the
first-round results, the latest results indicate the COVID-19 shocks forced
many firms to continue to cut costs by reducing staff hours, wages, and in some
cases laying off workers.
About 297, 088
estimated workers had their wages reduced in August-September, whilst 230,361
estimated workers had reductions in their working hours, with 11,986 estimated
employees being laid-off. Though the number of workers affected has reduced
compared to findings in May/June, (where 770,124 had their wages reduced,
297,088 workers had reduced working hours and 41,952 workers were laid-off),
the results show the pandemic continues to negatively impact on labour.
Cash Flow problems persist, with 7 out of 10 firms (70% from
76% in the first tracker) reporting a deterioration in their cash flows, an
indication of continuing weakness.
“The findings indicate that there have been some
improvements, but Ghanaian businesses continue to be affected by the pandemic
in various ways. Through our current initiatives to support businesses, we will
continue to work with all partners to support the Government's efforts to help
businesses to fully recover from the pandemic”, said Silke Hollander, Deputy
Resident Representative of UNDP in Ghana.
In terms of digital uptake, about half of the firms
increased the use of mobile money as against 38 percent in May/June. However,
the share of business establishments that have adopted or increased the use of
the internet for sales fell marginally from 9 percent in May-June to 8 percent
in August-September. This calls for policies and business development services
to facilitate technological upgrading, including the use of digital
technologies to support firms adjust to the “new” normal to increase
productivity.
“Even though the survey shows some improvements, Ghana’s
private sector remains deeply affected by COVID-19. The World Bank will
continue to work with the Government of Ghana to mitigate negative impacts, but
also to create pathways for long-term recovery and economic growth to make the
economy more resilient to shocks such as COVID-19,” said Pierre Laporte, World
Bank Country Director for Ghana, Liberia and Sierra Leone.
The survey shows that firms which benefited from Government
support almost tripled, compared to the first-round results, with currently 9
percent of firms (up from 3 percent in the first-round survey). Many firms
continue to indicate that they were not aware of support programs, suggesting
the need for increased awareness and clarity on the guidelines and requirements
of current programs.
Moreover, trading under the African Continental Free Trade
Area (AfCFTA) is expected to start in January 2021, and this second round
survey enquired about the businesses’ knowledge and perspectives of the AfCFTA.
Only a quarter of firms (26.2 percent) report that they are aware of the
AfCFTA.
“Let’s leverage the fact that Ghana is hosting the
secretariat of the African Continental Free Trade Area to explore how best to
enable businesses to benefit from the agreement”, added Ms Hollander.
The results of the survey suggest that policies are needed
to support firms both in the short- and medium-terms. The continued decrease in
demand, as well as difficulties in financing cash shortfalls, but many firms in
a difficult position. Firms continue to report that measures that aim at
improving liquidity (subsidized interest rates, cash transfers and deferral of
payments) are the most desired policies.
In the medium and longer-term, steps should be taken with
policies that support the private sector in the recovery stage from the
pandemic, and with credit guarantee schemes for those accessing finance,
assistance with input procurement, and trade facilitation.
0 comments: