COVID-19 is estimated to cut Ghana’s GDP growth by at least 5.3% in 2020 bringing the country’s expected GDP growth to about 1.5%. The Ghanaian economy is highly exposed to global shocks with trade accounting for over 71% of the country’s GDP in 2018.
However, very little is known about exactly how the pandemic and the measures to contain the spread of the virus are affecting local firms. There are currently no up-to-date data on firms that provide reliable insights on these questions. Based on the expected negative impacts, the government has announced a GH¢1.2 billion (around £170million or $210million) Coronavirus Alleviation Programme (CAP) to support households and businesses.
This study aims to measure the impact of COVID-19 on local businesses in order to inform government’s implementation of the CAP. An effective mitigation programme would need to be carefully tailored to the peculiarities of different sectors and be sensitive to distinctions between firms. A firm’s internal capacity can significantly improve its disaster immunity. Ojha et al (2014) find a positive correlation between firms’ knowledge of their competitive environment and market acuity, and their disaster immunity.
These factors are likely to differ substantially across industrial sectors and scales in developing countries such as Ghana. Under these conditions, crises, both natural and otherwise, can put severe strain on the ability of firms to cope.