Why second lockdown may cripple Ghanaian businesses and must be dreaded

Second lockdown, Ghanaian Businesses and Local community

On Sunday, Akufo Addo delivered his 22nd update on measures taken to fight the coronavirus. In his address, Akufo Addo noted the upsurge in the number of active cases which stands at “ a little over nine hundred (900) to one thousand, nine hundred and twenty-four (1,924).”

According to Akufo Addo, the Ghana Health Service (GHS) records on average, 200 new COVID infections per day with an increasing number of patients requiring hospitalization.

“Particularly worrying is the fact that the Ghana Health Service is recording, on the average, two hundred (200) new cases of COVID infections daily. The number of patients requiring hospitalization and intensive care is rising. The number of severe cases, which stood at eighteen (18) a week ago, has increased sharply to one hundred and twenty (120). Two weeks ago, there was no critical case, we now have thirty-three (33) in our treatment facilities. Again, according to statistics from the Ghana Health Service, the considerable number of persons who are severely ill are, surprisingly, relatively youthful persons, with no previous underlying health conditions. The number of confirmed deaths has increased, sadly, from three hundred and thirty-eight (338) persons to three hundred and fifty-two (352) within the period,” said Akufo Addo.

He further stated that, if the number of active cases continues to spike he may be forced to re-impose restrictions.

“We do not want to go back to the days of partial lockdowns, which had a negative impact on our economy and on our way of life. But should that become necessary, i.e., should the number of active cases continue to increase at the current rate, I will have no option but to re-impose these restrictions because it is better to be safe than to be sorry,” Akufo Addo said.

It is indeed better to be safe than sorry. But can the business community withstand another lockdown?

Business resilience test

Judging from the devastating impact that Ghanaian businesses underwent during the partial lockdown in March of 2020, the business community may not be able to withstand another shock should Akufo Addo re-impose restrictions. Besides, most businesses have still not recovered from the sales drop and loss in revenue experienced during the ‘March lockdown.’

According to a survey conducted by the Ghana Statistical Service (GSS), in collaboration with the United Nations Development Programme (UNDP), and the World Bank between May 26 and June 17, 2020, close to 131,000 businesses had challenges accessing finance with an average decrease in sales estimated at GH¢115.2 million. Moreover, an estimated 42,000 employees were laid off during the COVID-19 partial lockdown.

Below are further highlights of the report conducted by the Ghana Statistical Service:
• 35.7% of firms closed down during the partial lockdown
• 46.1% of business establishments reported that they reduced wages for 25.7% (an estimated 770,124 workers) of the workforce
• The educational sector had the highest level of closure with 65.4%, Financial services (47%), Transport and storage (47%), and manufacturing (39.8%)

In the second round of the survey conducted between August 15 – September 10, 2020,
• 8% of firms reported that they were closed
• 28% of business establishments reported reducing wages in August/September (corresponding to an estimated 297,088 workers).
• About 1% of business establishments indicated that they laid-off workers, corresponding to 0.4%

These are devastating figures as many businesses and households are still recouping from the effects of the lockdown in March.
A lesson learnt, some businesses began to scale up their models to take advantage of the online marketplace hence cushioning the blow of a second possible partial lockdown.

The survey conducted by the Ghana Statistical Service (GSS), in collaboration with the United Nations Development Programme (UNDP), also found that 9.0% of firms have commenced or increased the use of the internet to do business.

Second lockdown

A second lockdown will not only affect businesses but the local community as well. According to the Ghana Statistical Service, 34.1% of localities witnessed an increase in crime with Lockdown localities recording the highest increase (47.1%) in crimes.
These are damaging figures and a second lockdown may cripple the business and local community. Ghanaians must thus adhere to safety and social distancing protocols to prevent another lockdown. It is worth mentioning that not all businesses, particularly those who have fully embraced digital solutions may face the crippling effect of a second lockdown should it take effect.

Solution by the President
In light of this, President Akufo Addo has therefore cautioned Ghanaians to adhere to all health protocols or face the law.

“I have instructed the Inspector General of Police to direct officers, men, and women of the Police Service to ensure the rigorous enforcement of the law on mask-wearing at all public places and in public transport. They are also to ensure the closure of all night clubs, pubs, cinemas, and beaches that may be operating in defiance of the law. They will be assisted by the other security agencies if need be.
Persons in market places, workplaces, and operators of public transport must conduct their activities in accordance with the hygiene and safety protocols. The wearing of masks in these places is mandatory. Regulatory agencies will undertake random checks to ensure conformity with COVID-19 rules. Should any facility or institution fail to comply with these directives, its activities will be immediately prohibited, and appropriate sanctions applied,” Akufo Addo said

“It is important that I remind all Ghanaians that severe punishments exist on our statute books for persons breaking the law on the mandatory wearing of masks. Should anyone be arrested by the security agencies disregarding this directive, that person will be dealt with strictly in accordance with the law,” he further said.

According to Akufo Addo, his government is intensifying its strategy of enhanced tracing, testing and treating, to allow for the identification of infected persons, isolate and treat them.

Also, “government is reactivating available treatment and isolation facilities across the country in anticipation of any further increase in infections. The provision of adequate medicines, equipment, and personal protective equipment to enable health workers attend to home-based patients is being effected,” Akufo Addo said.

Let us all adhere to all safety and health protocols particularly now with the discovery of a new variant of the virus and the rising active cases.

The post Why second lockdown may cripple Ghanaian businesses and must be dreaded appeared first on Ghana Talks Business.

Ghana Talks Business