Over 80 per cent of agribusinesses in Ghana confirm that the COVID-19 pandemic has had a toll on their operations and services, a new survey report has found.
The businesses complained that disruptions in normal business operations, increase in business expenditure, cut in supply/production and difficulty in meeting monthly revenue target and payment of salaries and wages were the topmost effects on the sector.
A survey on the effects of the pandemic on such businesses said other difficulties included honouring tax obligations, debt repayments and threat to employees’ health and life.
The Agribusiness Sector Survey Report, 2020 by the Chamber of Agribusiness Ghana (CAG) indicated that generally, majority of agribusiness firms in Ghana lost revenue due to the lockdown and social distancing policies necessitated by COVID-19.
“Compared to pre-pandemic periods, Ghanaian agribusiness firms’ average monthly revenues ranged from zero to 100 per cent,” it said.
Some details
Averagely, monthly revenue of Ghanaian agribusiness firms reduced by 61.2 per cent during the COVID-19 restriction periods.
Small-scale agribusiness firms suffered the largest revenue shortfalls of about 77.4 per cent.
Perhaps, the high small-scale agribusiness firms’ revenue shortfall may be due to undeveloped or poorly developed business linkages, weak incorporation of technology, including information and communications technology, processing, poor raw material supply chains and inventory management.
Large-scale agribusiness firms experienced the least revenue shortfall over the same period, which may have resulted from good work or employee arrangements, improved raw material supply chains and good market arrangements.
The survey indicated that since Ghana had a large informal sector in which employee income is linked to daily wage activities, COVID-19 restrictions could have a dire effect on consumers’ disposable income.
In an interview, the Chief Executive Officer of the CAG, Mr Anthony Morrison, noted that even with employees who had regular sources of income, uncertainties associated with COVID-19 lockdowns and easing of social distancing might have prompted them to save to mitigate any future income disruptions.
“Consumers might have limited their expenditure on non-food agribusiness goods and services,” he said.
From the study, average monthly revenue of Ghanaian agribusiness firms reduced by 61.2 per cent during the COVID-19 restriction periods.
Small-scale agribusiness firms suffered the largest revenue shortfalls of about 77.4 per cent with large-scale agribusiness firms experiencing the least revenue shortfall over the same period.
Even for the agri-food supply businesses, government lockdown and restrictions on some consumer food demand sectors such as hotels, educational institutions, social events and restaurants ruptured the linkages between agribusinesses and other interactive sectors of the economy.
It said these disruptions were characterised by panic buying, hoarding and expectation shocks, leading to high food prices for consumers, high food transport and delivery costs for agribusinesses, and, thus, rising food inflationary pressures.
Recommendations
The survey recommends that smallholder farmers and agribusinesses be included in the government’s stimulus package and social protection programmes addressing the crisis.
“As restriction measures are gradually easing, demand has mounted for home delivery of foodstuffs and e-commerce. This trend should be encouraged and promoted,” it said.
Source: Daily Graphic
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