Firms in Ghana continue to recover from the shocks caused by the COVID-19 pandemic, the Covid-19 Rapid Firm tracker produced by The Ghana Statistical Service (GSS) in collaboration with the United Nations Development Programme (UNDP) and the World Bank, has said.
The GSS, the UNDP and the World Bank say they continue to track the impact of the pandemic on Ghanaian businesses with the Business Tracker Survey.
The survey aims at providing critical information to help the Government of Ghana, development partners and other organizations monitor the effects of the COVID-19 pandemic on businesses.
“The third round was conducted between 1st to 30th September 2021, following up on the second and first rounds conducted
between May 26 and June 7, 2020, and August 15 and September 10, 2020 respectively. A balanced panel of 3,602 firms across the three waves were used for the analyses,” the tracker which was released on Thursday February 17 said.
Key findings are: Reopening of permanently closed firms: In Wave III, 97.5% of firms were open, an increase of 22
percentage points since Wave I with firms in accommodation and food recording the greatest increase (32 percentage points). Almost half (49.5%) of firms that fully closed in Wave II were fully opened in Wave III.
• Employment: Employment response to the pandemic has also changed considerably with declines in reduced hours of work which was about five times lower in Wave III (14.8% to 3.2%), reduced wages which was about four times lower (16.5% to 4.1%) and leave without pay which fell from 7.2 percent to 0.8%. Across business establishments, 1.0 percent of the workforce were laid off in Wave III compared to 1.3 percent in Wave I.
Government intervention: Government stimulus led to an increase in sales by 11.5 percent with small firms benefitting the most with almost double the increase (22%). Sales increased by 33 percentage points between Waves I and III with the change mainly driven by firms in the top 35th percentile.
Access to inputs and finance: Access to inputs increased six-fold between Waves I and III (3.5% to 24.1%) while access to finance rose from less than 1 percent to almost 8.6 percent.
Expectation: When asked about their most likely scenario for the next six month, firms report that they expect an increase in sales of 26.8 percent on average. Under a more pessimistic and optimistic scenario, the expected change in sales is respectively a decrease of 22.9 percent and an increase of 38.9 percent. This indicates that the overall outlook of firms is positive (and an improvement compared to the first round), but that uncertainty remains.
Digital solutions: During Wave III, the use of mobile money by businesses increased. About 70 percent of firms report using mobile money in the third-round survey, compared to 53.4 percent in the second round. The share of business establishments that have adopted or increased the use of internet for sales increased from 8.4 percent to 13.2 percent.
AfCFTA: Generally, awareness of the Africa Continental Free Trade Agreement (AfCFTA) by firms increased during the third wave. Now more than half of firms (53.1%) report that they are aware, up from a quarter (26.1%) in Wave II.
Firms’ policy desires: Across the three waves, Cash transfer (33.5 percentage points) and Access to new credit (26.7 percentage points) were firms’ policy desires that recorded the highest percentage points increase.
The findings indicate that there have been remarkable improvements through a variety of channels, and some continuing impacts in the future can be expected. Firms have shown adjustments in their operations – through reopening, increased usage of digital solutions for sales – and also government interventions have provided support to firms.
In the longer term, policies that (i) increase customer and business confidence, (ii) help reestablish broken supply channels, and (iii) assist firms adjusting to the new reality (e.g., by leveraging digital technologies) can be expected to help businesses recover from the shock.