90% of local businesses see sales decline due to COVID-19 – GSS
New data released by the Ghana Statistical Service (GSS) has revealed that the coronavirus pandemic led to a significant decline of sales in about 90 percent of local businesses surveyed in 2,770 localities in the country from May to June 2020.
The report, dubbed ‘COVID-19 Local Economies Tracker’, which aims at accessing the impact of the pandemic on the local economy, stated that as a result of lock down measures and other restrictions imposed by government to contain the spread of the virus, about 72 percent of businesses experienced a decline in production, resulting in nine out of ten of those businesses also seeing drastic decline in sales.
Besides decline in production and sales, another area which was heavily impacted is labour, as the tracker shows about 36 percent of the businesses experienced labour shortages. Prices, on the hand, increased, with food and non-alcoholic beverages experiencing the highest price increase of 4.8 percent.
Commenting on the report, Government Statistician, Prof. Samuel Kobina Annim, says the revelations in the survey should awaken the nation of the need to resource local assemblies so that they can take the necessary initiatives to bring development to communities, rather than handling everything from the national level.
“The results show that COVID-19 had both economic and social effects on localities. These imply that strengthening of district assemblies to take initiatives during shocks, provision of basic amenities, strengthening of social structures, the involvement of district security agencies and non-state organisations would assist localities to deal effectively with future shocks,” he said.
The tracker further reveals that there is a general expectation that the global pandemic is here to stay and will be around for a longer period of time.
“Almost two out of every five localities reported that it will take more than a year for the local economy to recover from the pandemic. However, a quarter of the localities think they will recover from the COVID-19 pandemic within a year. Over 30 percent of localities have no idea when the local economy might recover from COVID-19. A greater proportion of localities in lockdown districts have worse expectations on when they might recover from the pandemic than the rest of the district types,” the report said.
The coronavirus pandemic has really hit the country’s economy hard as GDP figures show it contracted by 3.2 percent in the second quarter with more than 161,066 businesses closing as of June 2020.
From the GDP data, businesses in the services sector recorded the highest number of closures as more than 96,200 businesses were not operating within the period under discussion. Trade followed with more than 27,200 business closures, with accommodation and food also seeing more than 16,900 businesses closed in the period.
The manufacturing sector also had more than 14,900 businesses closed; with agriculture and other industry also seeing 5,157 and 445 businesses closed.
This also affected sales revenue of all businesses impacted by the lock down measures and restrictions on movements. Accommodation and food businesses, for example, saw sales revenue drop to as low as GH¢700,000 in April compared to GH¢2.5 million in April 2019.
The manufacturing sector also saw sales revenue slashed by almost half, recording GH¢25.6 million in April compared to GH¢44.9 million same period last year. Restrictions on travel and trade also saw sales revenue from the sector drop to GH¢30.5 million in April from GH¢45.5 million in 2019 same period.