Goldstreet Business Editorial: Key supply chains must be kept working

Anyone who thought Ghana could get off lightly with regards to the effects of the global coronavirus pandemic must be having a hard rethink by now. The number of confirmed numbers is not just growing – the rate of confirmations is accelerating.

This trend should have been expected; the slow pace of confirmed case growth initially was simply due to lack of testing capacity. Now that testing is in full swing, the number will rise further.

Consequently, the second period of lockdown will most likely not be the last, because by the end of this week the number of confirmed infections will be considerably higher than the number now.

This means the adverse impact on Ghana’s economy will be even worse than originally anticipated. It is instructive that the World Bank now forecasts that West Africa as a whole will enter a full blown recession this year, in contrast to the optimistic projections of both the Ministry of Finance and the Bank of Ghana which have envisaged slow, but still positive growth for the country this year.

On the bright side though, the incidence of COVID-19 infection in Ghana is still largely localized, with the overwhelming majority of identified cases restricted to Greater Accra and Kumasi. If the situation can be kept that way, then there is hope that a full blown, nationwide epidemic can still be averted.

However to do this, the two urban epi -centres of the outbreak have to remain isolated from the rest of the country. The snag here though is that apart from being the most populous places in Ghana they also host most of the country’s economic production capacity.

Therefore they are vital to Ghana’s supply chains in the production and distribution of goods that are vital to the well being of the nation’s citizenry. This means government has to focus on how to keep those supply chains running, without opening the door to the spread of the virus from these key locations to the rest of the country.

This will be a most difficult task. Indeed keeping the supply chains in essential goods and services at all will be difficult – but it must be done.

Which is why this newspaper suggests that the maintenance of working supply chains should be the next objective of government’s economic stimulus efforts. So far, such efforts have understandably been directed primarily at keeping the most vunerable segments of society and the enterprises that sustain them, above water; consequently business support is being focused on SMEs.

However there is the need to consider the importance of enterprises within their respective sector supply chains as well as size; while for instance a company like Unilever has the financial capacity to stay afloat, even if it has to suspend production for months, this would disrupt a supply chain upon which thousands of small scale economic operators rely. Such a disruption would also adversely affect millions of households that rely on its products.

Therefore even as government seeks to protect SMEs and informal sector micro operators and workers, it also needs to ensure that their linkages with large corporations are not broken.

On a wider scale, government needs to identify the most crucial supply chains for essential goods and services and protect them, no matter the size and wherewithal of some of the players along those supply chains. If not we will discover to our chagrin that in many cases, the poor are the worst affected by a down turn in the economic affairs of the rich.