The coronavirus virus pandemic seems to be creating problems in all facets of life, from education to health.
The world at large is set to struggle to revamp the ailing status coronavirus has bedeviled the world’s economy with. There is an unprecedented dip in economic growth and economists cannot begin to quantify the losses this pandemic has brought the world’s economy.
Even though events on the coronavirus pandemic are still unfolding, a preliminary analysis of the impact of the Coronavirus menace on the real sector shows that the 2020 projected real GDP growth rate could decline from 6.8% to 2.6% in the event of infected cases and 1.5% in the event of partial lock-down. The projected growth will further worsen in the event of a protracted coronavirus era.
Millions of people have lost their livelihoods through the virus and unemployment is fast skyrocketing, further deepening the unemployment conundrum of this country and Africa at large.
With this problem getting bigger by the day, some countries have started reopening farms, businesses, markets and factories to combat the threat of massive economic loss and famine.
In terms of trade, Ghana is already seeing significant reductions in trade volumes and values with many countries, especially China, which is Ghana’s highest import partner and the second highest of Ghana’s exports, the pandemic is having a huge negative impact.
The hospitality industry remains one of the worst hit sectors as hotels, airline business, tourist sites, and car rental services have had to lose huge sums due to this pandemic.
Hoteliers even started recording relatively low patronage before President Akufo-Addo called for a halt to their operations, with restaurants experiencing an average drop of 60% patronage, with scheduled international conferences cancelled as well.
Reductions in imported intermediate goods have significantly slowed down manufacturing of goods as well. Reductions in imports of goods and services have caused drastic reductions in demand for forex.
This however has had a favourable impact on foreign exchange volatility and on our net international reserves. It has also provided opportunities for import substitution, thereby, enhancing local production of goods and services. It is due to this that Ghana’s Cedi was ranked best performing currency in the world, few months ago.
The sharp decline in crude oil prices is set to result in significant shortfalls in petroleum revenue for the 2020 fiscal year.
There is also the likelihood of significant slowdown in our GDP growth, significant shortfalls in petroleum revenues, shortfalls in other tax revenues and increased health expenditures.
In a sector like agriculture, the impact of the pandemic may not be severe, since agriculture does not require significant imported intermediate goods even though growth could still experience some slow-down as a result of disruptions in the supply chain. However, uncertainty and fear could negatively impact planting decisions; and also, a reduction in the volume of main agricultural exports, as a result of the general downturn in economic activity.
There is however the need to note that if shortage in food supply is anticipated, then, it could lead to inflation of food prices. The current state of inflated prices on commodities could even surge more.
Transportation on the other hand is also a sector worst hit due to social distancing, closure of schools, and ban on public gatherings. Vehicles now take lesser than their usual capacity and many transport operators have been bitter about.
Since the outbreak of the pandemic, there has been significant decline in international price of crude oil, as a result of a fall in demand for crude oil. Obviously, decline in crude oil prices has resulted in significant shortfalls in petroleum revenue.
These effects on the world stage puts great responsibility on every citizen to exercise the highest level of self-discipline to win the fight against this pandemic.
The greater the level of self-discipline we maintain in observing enhanced protocols in hygiene and social distancing, the higher our chances of winning this battle.
Source: theindependentghana.com | Satsyi Esene Courage
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