Towards the end of 2019, many Ghanaians were hopeful, excited, and eager to behold the dawn of a new year.
New year resolutions were listed for 2020, plans were drawn and goals were set to usher in a ‘glorious year’. With the seeming lack of providence, 2020 became a year of uncertainties, and trial times for a majority of Ghanaians. No thanks to the COVID-19 pandemic and the adverse effects it has had on some business sectors. 2020 has thus been categorized by some, as the year of COVID-19.
On March 12, Ghana recorded its first two cases of the coronavirus. According to health authorities, two individuals from Norway and Turkey returned to Ghana with the virus. They were kept in isolation and contact tracing began. Since then, the number steadily increased. As it stands now, almost at the end of 2020, the total number of active cases stands at 54,503 with 333 death and 53,301 recovered.
In line with the objective of combatting the virus, the President, Nana Akufo Addo outlined five (5) key targets which were to:
1. limit and stop the importation of the virus;
2. contain its spread;
3. provide adequate care for the sick;
4. limit the impact of the virus on social and economic life and;
5. inspire the expansion of our domestic capability and deepen our self-reliance.
2020, year of Covid-19: Notable events that shaped Ghana’s businesses
The government thus instituted a 3-week partial lockdown and social distancing protocol that will have a lasting impact on the business and financial community.
1) On March 12, the first two COVID-19 cases. By July 13, the country had 24,518 confirmed cases and 139 deaths.
2) On March 15, The Government of Ghana announced social distancing measures, and a day later, restricted the entry of foreign nationals into the country
3) On March 16, travel restrictions on entry into Ghana took effect except for resident permit holders. Travelers from countries with over 200 positive COVID 19 cases were not allowed to enter the Ghanaian jurisdiction.
4) On March 18, the Bank of Ghana reduced the Monetary Policy Rate (MPC) by 150 basis points to 14.50 percent, which it has maintained to this day,
5) On Monday, 23 March 2020, some major markets were closed down and disinfected. These markets included but not limited to Makola, Okaishie, Abossey Okai, and Kumasi central markets
6) On March 30, under the Imposition of Restrictions Act, 2020 (Act 1012), a partial lockdown was imposed in several big cities that lasted more than three weeks. Panic buying of food, LPG Gas, and intense intra-city vehicular traffic characterized the last day before the partial lockdown in Ghana.
7) The government implemented several measures to mitigate the social and economic impacts of COVID-19 such as the COVID-19 Alleviation Fund and food relief programs. The government covered water and electricity bills for the population (100% for the very poor and 50% for all others including businesses), provided food assistance, and supported small and medium-scale enterprises. It also gave a tax holiday to health workers over six months, as well as a 50% salary top-up to these health workers for seven months which began in March.
8)The Finance Minister announced that Ghana would lose GHS5.7 Million in petroleum revenue due to the Coronavirus pandemic. GNPC would receive GHS642 Million less than what was originally expected
9) On 06 April, The Ghana Association of Bankers (GBA) released an official statement that 23 universal banks are reducing their lending rates on both current and imminent loans by 2%. Banks were already receiving a high number of loan restructuring modalities and requests.
10) The Institute for Energy Security (IES) forecasted between a 16% and 24% drop in prices of fuel on the local market in the first Pricing-window for April 2020.
11) As of June 24, Ghana had the second-highest number of confirmed COVID-19 cases in the West and Central Africa region after Nigeria, and the third-highest number of cases across the WHO Africa region (after South Africa and Nigeria).
12) As of July 13, the fatality rate of all cases was 0.6% and 4,192 people were receiving treatment (17.1% of all cases). Among all confirmed cases, 57% have been male and 43% female.
13) The Ghana Statistical Service (GSS), in collaboration with the United Nations Development Programme (UNDP), and the World Bank conducted a business tracker survey between May 26 and June 17, 2020. They found the following:
- 35.7% of business establishments had to close during the partial lockdown, with 16.1 percent continuing to be closed after the easing of the lockdown. Firms in the accommodation and food sector were the most affected (24.0% had to close).
- 46.1% of business establishments reported that they reduced wages for 25.7% of the workforce (an estimated 770,124 workers). Only 4.0 percent of firms indicated that they had laid off workers, corresponding to 1.4% of the workforce (an estimated 41,952 workers).
- More than a third of firms (37.5%) started or increased their use of mobile money, and about a tenth of firms (9.0%) started or increased their use of the internet to do business.
- Only 3.5% of firms reported that they had received government assistance.
- Firms reported substantial uncertainty in future sales and employment, with average expectations of declines of 24% of sales and 15% of employment in the worst-case scenario.
14) The volume of Mobile Money Interoperability transactions from January to June rose to 13.8 million from 2.5 million in the same period last year which represents an over 400% increase.
15) On Thursday, July 23, the Minister of Finance, Ken Ofori-Atta presented the Mid-Year Review of the Budget Statement and Economic Policy of the Government of Ghana. The following was captured.
- A GH¢3.2 billion investment by the Government to implement Free SHS, resulting in over 1.2 million teenagers enrolling in secondary school. This translated to GH¢2.2 billion in savings for parents and guardians.
- A GH¢1.6 billion investment in 100,000 jobs for unemployed graduates under the NABCO initiative.
- Headline inflation rising to 10.6% and 11.3% in April and May, respectively spurred by panic buying.
- A debt stock of GH¢258.37 billion as of June 2020, representing 67% of GDP. This compares to GH¢217.99 bn, equivalent to 62.4% of GDP at end of 2019.
- An expenditure revised upward by GH¢ 11.7 billion from GH¢86.0 billion to GH¢ 97.7 billion.
- A requested approval spending of an extra Gh¢11.8billion for the 2020 fiscal year.
- An overall growth projected at about 0.9% compared with the pre-Covid-19 estimate of 6.8%.
- A revised revenue estimate downward by GH¢ 13.4 billion from GH¢ 67.1 billion (16.9% of GDP) to GH¢ 53.7 billion (13.9 % of GDP).
16) Communication Service Tax (CST) dropped by 4% to reduce the cost of communication services to the consumer as more and more people work remotely and utilize online services.”
17) On August 14, 2020, as part of the government’s agenda of “Ghana beyond Aid,” Parliament approved the Agyapa Royalties Investment Agreement which was established to raise capital from the proceeds of the extractive (mining) sector to finance the country’s developmental projects.
The Agyapa Royalties Limited is expected to secure close to $1 billion for four key areas, namely, education, health, primary capital, and infrastructural development. The deal has however been met with scrutiny.
The Minority in Parliament called for a withdrawal of the contract with Agyapa Mineral Royalties Limited citing a conflict of interest and difficulty in monitoring since the Agyapa Royalties Limited is an offshore company situated in a tax haven. The deal also underwent a Corruption Risk Assessment by the Office of the Special Prosecutor.
18) South Africa’s Telecommunication giant, Mobile Telephone Network (MTN) emerged in the number one spot as Africa’s most valuable brand with a brand value of US3.3 billion despite recording a 1% loss in brand value.
19) On September 29, the Ghana Statistical Service (GSS), in collaboration with the United Nations Development Programme (UNDP), and the World Bank released the COVID-19 Local Economies Tracker Wave 1. The report revealed that;
- Prices of almost all products increased, with food and non-alcoholic beverages experiencing the highest price increase of 4.8%
- 41.5% and 40.8% of lockdown localities received support from churches and philanthropists respectively
- close to 25% and 78% of localities did not benefit from the subsidies on electricity and water respectively because of the unavailability of these amenities
- Approximately 38% of localities think it will take more than a year for the local economy to recover from the COVID-19 pandemic.
20) By the end of September, Ghana hits GHc273.8 billion in total debt placing Ghana’s debt to GDP ratio at 71.0% which crossed the sustainability threshold for the first time since December 2016.
21) In November, the inflation rate slowed for the fourth consecutive month to 9.8% compared with 10.1% in October
22) Ghana and Ivory Coast decided to cancel all cocoa sustainability schemes that Hershey, a U.S based chocolate manufacturer, runs in their countries. Both countries accused the chocolate manufacturer of trying to avoid paying $400 a tonne Living Income Differential which is aimed at combating poverty amongst cocoa farmers.
23) On December 7, Ghana headed to the polls with Akufo Addo winning a second term in office.
24) The Kaneshie, Odawna, and Kantamanto markets in Accra were razed with fire in December. Market traders constantly lose investments running into millions of Ghana Cedis to market fires. A situation that calls for urgent attention of all stakeholders to resolve
25) The Ghana Commodity Exchange on Monday 14th December added Ghana’s local rice to the number of commodities traded on its electronic trading platform. This is a boost to rice farmers, and will create a wider market for local rice.