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Business News of Tuesday, 26 May 2020

Source: Class FM

Coronavirus: Ghanaian agribusiness firms monthly revenue falls by 61.2%


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The average monthly revenue of Ghanaian agribusiness firms reduced by 61.2% during the COVID-19 restriction period, according to a survey conducted by the Chamber of Agribusiness Ghana on the effects of COVID-19 on agri-business in Ghana.

According to the survey, small-scale agribusiness firms suffered the largest revenue shortfalls of about 77.4 %, with large-scale agribusiness firms experiencing the least revenue shortfall over the same period.

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 communication technology, processing, poor raw material supply chains and inventory management, the report emphasised.

It explained that large-scale agribusiness firms experienced the least revenue shortfall over the same period, adding, the relatively low revenue shortfalls of large-scale Ghanaian agribusiness firms may result from good work or employee arrangements, improved raw material supply chains and good market arrangements.

The report indicated that Ghana has no clear pathway to salvage the sector players from the global pandemic.

Even with the government’s promises and efforts to offer stimulus packages to vulnerable groups, the report said agribusinesses and smallholder farmers are despairing to see the government’s immediate roadmap to mitigate the threat of the pandemic as the country nears food insecurity.

Participants in the survey were both local- and foreign-owned agribusinesses located across 16 regions of Ghana.

The size of agribusinesses surveyed ranged from medium-scale (29%) to large-scale (36%).

Most of the agribusinesses (57%) had an average of five workers while, at least, about 7% have more than 50 workers.

The number of years of agribusinesses surveyed followed 1 – 5 years (67 %), 5 – 10 years (16 %) and more than 10 years (17 %).

Over 80% of agribusinesses surveyed admitted the pandemic has had a toll on their operations and services.

Paramount effects of the COVID-19 pandemic on agribusinesses were disruption in normal business operations, increase in business expenditure, cut in supply/production, difficulty in meeting monthly revenue target, and payment of salaries and wages; difficulty in honouring tax obligations/debt repayment, and threat to employees’ health and life.

The chamber assessed the extent of the impact of COVID-19 and provided data-driven inputs and proposals to the government to map out immediate interventions to cushion the sector and salvage the industry from the obvious impact of this pandemic.

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