The Economic Impacts of COVID-19 in Ghana

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RICHMOND, Virginia — While most countries’ economies have incurred adverse economic impacts due to the global pandemic, each country is impacted in ways unique to its circumstances. Unfortunately, the economic impacts of COVID-19 in Ghana have been severe. Due to the nature of its economy, much of Ghana’s population was pushed further into poverty as a result of the pandemic.

Economic Impacts

Located in a coastal nook of Western Africa, Ghana is home to approximately 30 million people. Africa as a whole is expected to see a GDP reduction from an expected 3.2% to 1.8% as a result of COVID-19; Ghana takes a sharper dive from an expected 6.2% to 2.8%. With a market-based economy primarily powered by international trading and imports, disruptions to global commerce and supply chains significantly impact Ghana’s economy. Reduced trade and reserves ripple over to reductions in government revenues and increased unemployment even as the country incurs the increased expenditure and debt-burdens costs of the pandemic. Ghana’s economy’s open nature has made it particularly vulnerable to global economic volatilities.

Internally, agriculture is a crucial sector that provides about 90% of Ghana’s food needs. It is also labor-intensive. Production and distribution have been impacted by the reduced workforce during lockdown conditions and restricted movement, while consumers spent more on healthcare than food. Collectively, these various factors have caused significant downturns in this economic sector. Manufacturing represents another primary sector impacted adversely given its dependence on imports of raw materials, a sharply disrupted supply chain as noted earlier. Economic impacts in the service sector such as tourism, hotels, restaurants, telecommunications and education have also been steep given the internal and external travel restrictions and physical distancing requirements.

Impacts on Living Standard

Studies based on population surveys bring to light the impacts of the economic downturn of 2020, which affected individuals and families the most. The COVID-19 crisis impacts those at the poverty line the worst. Half of Ghana’s regions have poverty rates higher than the national average. The economic downturn of 2020 embeds poverty more deeply into areas already mired in penury. Along with countries in sub-Saharan Africa, Ghana is one of the world’s most impoverished areas, struggling even before the COVID-19 crisis to meet SDG goals. The pandemic has pushed the country back in its goals of eliminating poverty by as much as seven years.

Lost incomes, employment, access to health care and food impact families. The Cogent study shows that close to 58% of people have had periodic food deprivation during the pandemic. At the same time, more than half of those surveyed reported challenges to accessing clean water at different times in that period. The survey also shows increased difficulties with access to fuel, medicine and cash income during COVID-19 compared to prior periods. The crisis impacts female-led households disproportionately, with a 58% increase in poverty than about 54% in male-led families. The adverse economic impacts of COVID-19 are global but particularly acute in regions already deeply entrenched in poverty.

The Africa In Me

The stories of impacted individuals from her home country inspired Rhodline Hamelo to start a nonprofit, The Africa In Me, in 2020 with a mission to stop hunger and provide job security in affected areas of Ghana and other neighboring countries. Organizations such as The Africa In Me seek to reach those in need directly, sustaining them with food, medical supplies and employment through challenging times. Stories such as Grace Amankawa’s offer a glimpse into the anguish of those already living on the edge of poverty, with the pandemic taking away already meager sources of income.

Long-term, sustained actions through private and public endeavors are necessary to alleviate the acute economic impacts of the COVID-19 pandemic in Ghana. Increased funding and aid to affected countries through legislation, such as COVID-19 relief packages, and continued investment in the International Affairs Budget are important ways to help countries like Ghana through this crisis.

Mala Rajamani
Photo: Flickr

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