Last week, we brought the first part of this article. The Part one focused on the impact of COVID-19 or Coronavirus on Ghana’s economy and specifically on the Agriculture and Petroleum sectors . This part however is focusing on the key sectors such as tourism, health, education & financial services. Here is a sector-by-sector impact analysis of Coronavirus pandemic on Ghana’s economy
If you missed the part one, here is a link to bring you up to speed with issues discussed. Click here for it.
Tourism sector- Impact of Coronavirus pandemic
For the Tourism Sector, statistics from the Ghana Tourism Authority indicate that the sector will witness a downsize in the next five months. This may result in revenue loss of $170 million in its entire value chain due to the COVID-19 impact on Ghana’s economy.
The Minister of Tourism, Arts and Culture, Mrs Barbara Oteng-Gyasi, affirmed this recently at a stakeholders’ meeting held in Accra to assess the effects of the COVID-19 on the industry. Last year, following the year of return initiative, the tourism sector raked in about $1 billion dollars in revenue. This according to the Tourism Minister.
Based on this success, another initiative dubbed “beyond the return”, was birthed. This was expected to bring in more revenue for the country. However due to the uncertainties as to when the pandemic will be over, it is unclear whether the “beyond the return” initiative would come to light.
Health– Impact of Coronavirus pandemic
The Health sector in Ghana is currently facing its biggest challenge yet, due to the coronavirus pandemic. The picture, in terms of confirmed cases, for Ghana looks frightening as the number of cases keep soaring since the country recorded it first two case on March 12, this year.
As at the last update, April 30, Ghana’s case stood at 2,074 with 212 recoveries and 17 deaths recorded.
But the outbreak of the virus in the country, fortunately or otherwise, has stemmed good sentiments for health workers and the health sector in general. The health sector is gaining significant attention, albeit for positive reasons.
There is greater appreciation for health workers in a manner never seen before in recent times in Ghana’s history. So far, GH₵572 million has been pumped into the sector, to procure PPEs and provide incentives to the front-line health workers, in the against the pandemic.
However total ﬁscal impact from revenue shortfall and cost of preparedness and response plan, according to figures released by Deliotte, is pegged GH₵9,505 million.
Furthermore, the President of the Republic, Nana Akuffo-Addo, in his last Covid-19 update, Sunday, April 26, 2020, promised to build 88 new district hospitals within a period of eight months and six new Regional Hospitals for the newly created regions.
Mining Sector- Impact of Coronavirus pandemic
The mining sector, other sectors, is enjoying some relative success despite the impact of the Covid-19 on Ghana’s economy. In fact, players in the industry are confident of improving upon the previous year’s production of more than 4 million ounces of gold.
The Chief Executive Officer of the Ghana Chamber of Mines Mr. Koney is reported to have said in the B&FT Newspaper, that economic crisis occasioned by the coronavirus pandemic bodes well for the mining sector. Specifically because of the increase in the price of gold, which is translating into higher earnings for producers and the country at large.
“For us to benefit from this firm price of gold, we want to have a seamless production. Production should not be halted because revenue is both a function of the price of the good, as well as, the volume of production in this particular case.He however, admitted that there has been some negative impact on the industry’s supply chain, and mining support services – firms that provide support services to miners.
“Although we are expecting some improvement, we have had a little blip by way of uncertainty around the supply chain. We rely heavily on mine support services,” he is said in B&FT reportage.
The coronavirus pandemic has created a disruption in the educational calendar in the country, the sector is currently under suspension.
This means that all the schools in the country, that is from primary to tertiary, are closed down temporarily in adherence to the government’s schools closure directive. This is creating untold hardships to teachers and administrators of private schools.
As an alternative, the ministry of education in collaboration with some television stations in the country, announced e-learning platforms solely for the purpose of churning out educational content to keep the school children occupied while at home.
Prior to this, the university community in the country moved lectures online, relying on communication platforms like zoom and skype, among others.Some have even initiated plans to conduct their end of semester examinations online, but University student across the country are agitating against this mode of assessment.
However, the Minister of Education, Mr Mathew Opoku Prempeh has come out to say that there will be no exams for public institutions in the country, explaining that discussions are ongoing to determine the appropriate mode of assessing academic work.
The financial sector
The impact of Covid-19 pandemic may erode gains made in the financial sector in Ghana following the recent clean up by the Bank of Ghana.Client Investment with banking sector, which grew by 7.2% as at February 2020, per the latest Banking Sector Report, is estimated to drop in the near future. The drop may even worsen in the coming months should the pandemic prolong.
This is because many people who have savings or investments with the various banks and financial institution are expected to callback their investments to cushion themselves, their families and businesses in the wake of the economic hardship occasioned by the coronavirus pandemic.
Again, it is estimated that demand for loans by clients will increase due to the growing hardship in the system as imposed by the coronavirus pandemic.
The BoG’s Banking Sector Report shows that the total Non-Performing Loans (NPLs) of banks declined further by 4.5 percent to GH₵6.33 billion in February 2020, following a decline of 14.4 percent a year earlier. However, there is a fear that if the banks don’t handle the loan requests appropriately, there may be an increase in non-performing loans in the books of banks in the ensuing months.
By Salifu B.B. Moro