Opinion: Businesses scared by threat of renewed lockdown

Business owners and corporate managers in Ghana are in a state of palpable unease in reaction to the warning delivered in a nationwide television address by President Akufo-Addo that Ghana may return to partial lockdown if the country’s Coronavirus situation continues to deteriorate.

By the end of last week, the warning seemed to already be eliciting the desired response with even small businesses insisting on adherence to basic COVID-19 protocols at their premises by customers and staff alike; over the past few months since government began rolling back erstwhile restrictions, compulsory adherence to coronavirus protocols had only been unfailingly insisted on by large and some medium sized enterprises and institutions.

The renewed adherence to the protocols have received further prodding by the enthusiasm with which the Ghana Police Service is now showing in enforcing the law concerning the compulsory use of face masks – within the first week of the President’s insistence on its enforcement, the police had arrested over 400 people in Greater Accra alone.

The President sounded the warning when he delivered his latest COVID-19 address on Sunday, January 17, 2021 and unsurprisingly, business leaders – and their employees as well – have reacted with deep worry.

The socio-economic restrictions imposed by government in response to the initial outbreak of COVID-19 in Ghana, culminating in an outright lockdown of the country’s two biggest economic hubs – Greater Accra and Kumasi – triggered an economic slump that saw thousands of small businesses close down and hundreds of thousands of Ghanaians thrown out of paid employment despite concerted efforts by government to ameliorate the effect of the restrictions by partnering commercial lenders to provide over GH¢1 billion in soft loans to small sized enterprises.

The hospitality and recreation industries were the hardest hit along with commercial transport, land, sea and air all inclusive.

Akufo-Addo noted that the partial lockdown imposed in the country last year caused a negative impact on Ghana’s economy; during the second quarter of 2020 the Ghanaian economy suffered unprecedented 3.2 percent contraction and this was followed by a further 1.1 percent contraction in the third quarter too.

However, data from the Bank of Ghana has since pointed to a strong economic rebound, although official data for the last quarter of the year will not be available until the final days of January this year.

But an emergent second wave of the virus, accompanied by the threat of renewed severe restrictions, has the potential to not just halt the economic rebound but send the economy into an even deeper tailspin than the one suffered last year. This is because government does not have the financial resources available to it during the first wave last year.

Although government has embarked on an ambitious three year GH¢100 billion Ghana COVID-19 Alleviation and Revitalization of Enterprises Scheme (Ghana CARES for short), of which it plans to stump up GHc30 billion itself – with the private sector providing the rest – in reality it has very little fiscal space left.

Its fiscal deficit for 2020 was an unprecedented 11.8 percent of Gross Domestic Product which pushed the public debt to GDP ratio above the generally accepted debt sustainability threshold of 70 percent, and government now plans to cut the deficit to 8.6 percent this year, which would require draconian public spending cuts.

All this means re-introduced restrictions cannot be accompanied by economic support programmes for business on last year’s scale.

However the President warned that another partial lockdown will be imminent if the country’s COVID-19 situation gets worse, insisting it’s better to be safe than sorry.

“We do not want to go back to the days of partial lockdowns, which had a negative impact on our economy and our way of life,” he noted during his address on Sunday evening.

“But should that becoming necessary, ie., 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. So together, let us all ensure that we respect the protocols.”

Ghana’s Coronavirus situation seemed to be improving towards the end of 2020 but there’s been a spike in cases in recent weeks.

As at the middle of last week the country had 1,776 active cases while 346 persons have died in the process, according to data from the Ghana Health Service.

Ghana’s COVID-19 infection rates are skyrocketing and include new strains of the virus not before seen in the country, filling treatment centres and threatening to overwhelm the health system, President Nana Akufo-Addo said on Sunday.

Since January 5, the number of active cases had risen to 1,924 from about 900, Akufo-Addo said in his speech. There are now 120 severe cases, up from 18 a week ago.

Ghana is not yet close to a peak seen during the first wave of infections in the middle of last year, but could quickly reach that level if cases keep rising at the current rate.

If they do, the president said he would impose another partial lockdown, despite worries about what that would do to one of West Africa’s largest economies.

“Our COVID-19 treatment centres have gone from having zero patients to now being full because of the upsurge in infections,” the president said. “At this current rate … our healthcare infrastructure will be overwhelmed.”

Across Africa, a second coronavirus wave is infecting twice as many people per day than at the height of last year’s first wave and has yet to peak, according to the Africa Centres for Disease Control and Prevention.

The rise has raised concern across the continent where, unlike in Europe and the United States, cash-strapped governments have been unable to secure supply deals with vaccine manufacturers, putting the onus for now on containment.

Akufo-Addo said details about access to vaccines and a rollout plan would be announced “very soon”.

He said that some people arriving from abroad had tested positive for “new variants” of the virus, without giving details.

A fortnight ago, Gambia recorded its first two cases of the highly infectious coronavirus variant first found in Britain, in what appears to be the first confirmation of its presence in Africa. Since then it has closer and closer to Ghana with reported cases in Nigeria, a country which has high illegal human traffic flows with Ghana.

Inevitably the first case of the new variant in Ghana was being reported by the end of last week.

“Work is ongoing to determine the presence and extent of spread of the new variants in the general population,” Akufo-Addo said.