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The Ghana Industries Association says that more than 70 percent of companies
optimistic that the business situation would improve in the next six months.
In its research report on assessing the impact of Covid-19 on companies in the country, the Association said that by June 2021, 80 percent of companies expect to recover from the negative impact of Covid-19.
“There is a significant recovery for all sectors and groups by size with different magnitudes. The service sector is recovering faster and construction is slowly returning to normal, ”said Mr. Seth Twum Akwaboah, CEO of AGI, at the presentation of the report.
The research showed that 89 percent of companies were negatively affected by Covid-19, while overall around 75 percent of companies in all sectors reduced production in the year.
Presenting the research findings, Akwaboah said the reduction in production was slightly higher with small businesses and African giants.
He said that most companies were operating between 25 and 50 percent, adding that there was a steady decline in sales turnover over the past three quarters.
Between the fourth quarter of 2019 and the second quarter of 2020, there was an overall decrease of more than 60 percent in sales volume across all business sectors.
The research showed that a vast majority of companies, representing 81%, are unlikely to reach their revenue target this year.
However, the reality is more pessimistic for the construction sector, with only seven percent that could meet this year’s target, Akwaboah said.
In the second quarter of the year, about 60 percent of companies experienced worse business situations.
However, in the third quarter, 17 percent returned to normal and nine percent saw an improvement in their business situation.
On the likelihood of employing and investing, Akwaboah said that about a quarter of companies planned to hire more workers in the next six months and that construction had a 30% higher intention to hire.
However, there is a higher proportion of 44 percent who plan to make new investments.
It is highly likely that 45 percent of companies will repeat the layoff of workers with almost the same proportion as in 2020 if the pandemic persists, the research showed.
Akwaboah said that among the top 10 challenges for companies during the period were cash flow constraints, lack of orders, high cost of available supplies, difficulty paying staff and the market for goods and services.
He said companies were still waiting for the government’s stimulus package, tax breaks or temporary tax breaks with flexible loans from commercial banks.
“Tax breaks or temporary tax breaks, government stimulus package, corporate tax reduction, flexible loans from commercial banks, electricity and water subsidies are, in this order, the most important.
things that companies hope to alleviate the impact of covid-19, “said Akwaboah.
To improve revenue, companies consider adopting new marketing strategies, government tax relief, and investing in infrastructure as the three most important decisions to implement.
The overall objective of the study supported by BUSAC Fund was to determine the impact of the coronavirus pandemic and restrictions on the industry and also to assess the level of business confidence for the third quarter of 2020.
The impact of the pandemic on input supply, production, labor force and projected annual income was also assessed and determined how SMEs can build resilience and local production capacity for AfCFTA for the next
year.
