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Business News of Sunday, 12 July 2020

Source: thefinderonline.com

Coronavirus: Woes of businesses persist - Business community

The business community in Ghana says it is cautiously optimistic about a boost in economic activity and growth prospects for businesses, in the next six months, even with a total relaxation of the COVID-19 restrictions.

The lifting of the three-week partial lockdown some six weeks ago and the recent partial lifting of restrictions on social gatherings have made little or no impact on business activities.

The Association of Ghana Industries (AGI), the Ghana Union of Traders Association (GUTA) among other business associations have told Business Finder even a total lifting of restrictions will not restore businesses and economic activities any time soon.

Grappling with the uncertainty unleashed by the COVID-19 pandemic, with the country’s borders closed, international flights banned, most businesses are not operating at full throttle.

President of GUTA, Dr Joseph Obeng maintained that business activities cannot change much, in spite of the easing of some restrictions, as long as the country’s borders remain closed.

“For majority of our members who ply their trade outside our shores, they cannot travel because flight restrictions remain in force; so the partial relaxation of restrictions will have no impact at all on traders whatsoever,” Dr Obeng said.

Dr Obeng admitted that even though some pockets of businesses, especially those who deal in garments would see some renewed activity, “Ghana is not an island; we are part of the whole and so once flights are not coming and going, international trade is affected.”

Chief Executive Officer (CEO) of the AGI, Mr Seth Twum Akwaboah, told this reporter “almost all businesses relate to events. The restrictions have been partially lifted, but the country’s borders remain closed, you cannot travel outside, investors cannot come in as they used to so there situation is largely unchanged”.

The fact that funerals can now be held with 100 from 25 people (300 per cent increase) means “the numbers have gone up and so for catering services, instead of the initial 25 people, they can expect some level of improvement.”
The AGI cautions that “even though the numbers have increased, it does not reflect an immediate boom in economic activity.”

Woes of hospitality industry persist

In spite of the easing of restrictions, albeit partially, “we still have a long way to go, as long as the borders remain closed and we don’t have a lot of international visitors coming in, hoteliers will continue to suffer.”

Mr Akwaboah admitted that internal movement of persons, goods and services could improve slightly, as people move from Accra to Kumasi and Takoradi and vice versa, and as such hotels could experience some gains.

For many hotels, they may not readily resume operations since a few customers or extremely low occupancy cannot meet their fixed costs, they would be better remaining shut.

Immediate past President of the Ghana Hotels Association, Mr Herbert Acquaye, told Business Finder, “the local market is very weak as there isn't much movement and most companies are having virtual conferences. Annual General Meetings (AGMs) are virtual, everything has become virtual so there isn’t much movement to allow the use of hotels.

The hospitality sector, he indicated was battling with uncertainty.

“Until we reach the threshold where we can open up like the way America has opened up, we are stuck.... that is why America didn't open up face out like this and limit people and say ok only for 100 people; they opened up. because if you want to open up the economy we can open up this way and feel that industry will be able to benefit,” Mr Acquaye noted.

Manufacturing sector bleeding from COVID-19 restrictions

The absence of funerals, weddings, naming ceremonies, amongst other social events has impacted the beverage industry significantly.

“You need to have the weddings, the funerals and other big events, to keep the manufacturers in business, but with the restrictions, the volumes reduced drastically and not even the partial lifting is able to restore the numbers; this is because churches cannot have big conventions, people cannot have big parties or weddings.

“Pharmaceutical products are essentials and so demand for them has remained high, but for those in the food and beverage industry most of which depend on large social events and to thrive, their volumes have come down.”

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