Sometimes something might seem like bad news but could turn out to be a blessing in disguise. It is an open secret that the outbreak of coronavirus (COVID-19) has been a catastrophic turn of events in economies and business. However, it has also created business space for others to capitalise on.
The coronavirus pandemic has exceptionally ravaged the global economy (small and big economies). To say the least, it has been a grim for businesses by causing widespread collapses, layoffs, pay cuts and furloughs.
With virtually the entire world economy going under some form of lockdown or restriction, obviously, the pandemic has had dire consequences on countries all over the world. Small and medium-scale enterprises (SMEs) have been worst-affected by the outbreak of the dreadful virus. The COVID-19 era has been a torrid season for actors in the hospitality industry, resulting in massive layoffs.
In quantifying the global contractions in monetary terms, the Asian Development Bank (ADB) estimated the global economic impact of COVID-19 to be between US$5.8trillion and US$8.8trillion – representing losses equivalent to between 6.4 percent and 9.7 percent of global GDP. The ADB further estimated that mitigating measures such as travel restrictions, lockdowns, border closures among others instituted by various countries to curb the spread of the disease will reduce global trade by between US$1.7trillion and US$2.6trillion.
Ghana’s situation epitomises a better appreciation of the shock on economies. The pandemic continues to pose significant challenges to the Ghanaian economy. Households and businesses across the country have been hard hit with significant job losses and reduced incomes. Sectors heavily affected include the hotel and hospitality industry, foreign direct investment, trade and industry, agriculture, health, transportation, manufacturing, real-estate, financial services and education.
Statistics from the Ministry of Finance indicate that, so far, 19 out of the 28 state-owned enterprises (SOEs) are projecting losses up to GH¢1.55billion for 2020. Collectively, 1,531 job-losses were recorded between April to June 2020 from eight companies within the Ceramics, Timber, Food and Agro-processing industries in the manufacturing sub-sector.
Also, data collected by the Ghana Tourism Authority, as of 31st May, 2020, revealed that 979 accommodation facilities had shut down. This represents almost 25 percent of licenced facilities. The related job losses are over 2,300 personnel. In addition, the Tour Operators Association presented evidence of 11,558 tourists cancelling their visits to Ghana – leading to projected year-to-date revenue losses of GH¢4.8million.
Created Business opportunities
Despite the devastating impact of COVID-19 on businesses, it has created a business vacuum for others to exploit. Some of these business opportunities have been created thanks to the adopted health safety protocols and restrictive measures like closure of the borders.
Boost for local cashew processing
Excessive export of raw cashew nuts (RCN) has been identified as a major bane of local cashew processing companies, especially indigenous ones who do have the financial muscle to compete with exporters for the raw material. However, COVID-19 has disrupted the international cashew market – thus making export of RCN a difficult and unattractive venture. This has made RCN available at competitive price on the Ghanaian market for local processing companies.
On the backdrop of this development, the Ministry of Food and Agriculture supported seven indigenous cashew processing factories that hitherto were shut down to bounce back. There are about 14 cashew processing factories in the country with total installed capacity of about 65,000 metric tonnes. Most of these companies were out of business due to fierce competition from exporters for RCN, but COVID-19 has changed that narrative.
Face mask & shield sales
As the spread of coronavirus lingers on and the world adopts strategies into a new normal, wearing masks has been recommended or has become mandatory in certain instances – especially public places like in commercial transport. In Ghana, President, Nana Addo Dankwa Akuffo-Addo has signed a Law (E. I164) that criminalises the act of not wearing a face mask that fully covers the mouth and nose in public places. The law states that those who are found guilty will be fined a minimum of GH¢12,000 or a maximum of GH¢60,000, or will be sentenced to spend between four and ten years in prison.
The high cost and scarcity of clinical and surgical masks have made it imperative for fashion designers (tailors and seamstresses) to design fabric ones which are comparatively affordable. The prices vary from as low as GH¢2 to GH¢10. The outbreak of COVID-19 and its consequential restriction on social gatherings such as funerals, church activities, weddings and parties hugely affected the business of fashion designers. However, the increasing demand for fabric-made face masks has given a lifeline to their troubled businesses. The use of face shields is also fast becoming one of the preventive lifestyles, thus making their sale another booming business on the streets.
In an interview with B&FT, Michael Asare Yeboah – Chief Executive Officer of Mackenzie Clothing in Sunyani-Bono Region, said before COVID-19 the company used to produce school uniforms and sports kits including football jerseys and running vests, but it has suspended those production lines to produce face masks for survival.
He said: “Currently, we sew between 3,000 and 4,000 ordinary pieces of fabric face masks on a daily basis. We also produce 1,000 branded or customised ones every day. I’m looking forward to scaling up production to between 6,000 to 10,000 pieces. I pray government will offer us a contract to produce more, as many companies in Accra have been contracted to produce for the state”.
Besides the face mask production opportunity, COVID-19 has also created trading opportunity for the young and old who sell on the streets to make ends meet. All manners of persons have joined the sale of face masks on the streets of Ghana. They include food vendors, stationery shop operators, and sachet-water sellers. Some students who are at home due to the closure of schools have also joined the new COVID-originated enterprise to make money.
A second-year Senior High School student, Stella Kyeremaa, sells face masks and shields on the streets of Sunyani, particularly at vantage points like motor traffic intersections and lorry stations. “On a good day, I’m able to make total sales between GH¢50 to GH¢100. I do this to support my parents whose income levels from petty trading have fallen in the past months. I’m very optimistic that the little savings from this business will go a long way to support my education when school reopens.”
Face mask sales joint in Sunyani
Hand sanitiser business
In accordance with global COVID-19 prevention guidelines, the use of alcohol-based sanitisers has been one of the safety protocols in Ghana. This has triggered massive patronage of the commodity across the country. Along the line, the increased demand coupled with limited local production and delayed imports resulted in scarcity, thus fuelling the price on the market. This informed government to support local pharmaceutical industries and others to expand production of hand sanitisers. The situation has attracted industries such as beverage manufacturing companies Kasapreko Company Limited and Angel Group of Companies to join the fray.
Others who are outside the bracket of the business have also joined the hand sanitiser manufacturing industry. One of such new entrants is a teacher at the Sunyani Senior High School (SUSEC). After securing the relevant certifications from regulatory bodies like the Food and Drugs Authority (FDA), Victoria Konadu started producing hand sanitiser in commercial quantity during April 2020.
She has since been supplying institutions comprising schools, hotels, financial institutions and churches among others. Her clients are scattered across the country in places including Accra, Kumasi, Takoradi, Goaso, Berekum, Atebubu, Sunyani and Seikwa in the Tain district of Bono Region. So far, Ms. Konadu has employed three casual workers and expects to employ more, subject to expansion of the business.
“I intend to expand production in the soonest time. Initially, access to finance was a challenge; but thanks to government’s stimulus package for SMEs and other facilities, I’m currently in a process to secure funds for expanding the business. I need the money to purchase industrial equipment and more production materials,” she said.
Booming sales of local foodstuff & fruit
Since the outbreak of COVID-19, health experts have been advocating healthy eating – especially consumption of local foodstuffs and fruit to boost the immune system. This was also echoed by President Akufo-Addo during one of his nation addresses. The majority have paid heed to the call, thus increasing the demand for items such as oranges, pineapple, watermelon, kontomire, mushrooms and brown rice.
Mr. Ishmael Kyere Aboagye, a 43-year-old farmer at Yawsae near Atronie in the Sunyani Municipality said: “There has been significant increase in the demand for local farm produce. Buyers from cities have been trooping in to our village to buy these items. The increased demand has positively reflected on our incomes. This has motivated farmers here to expand production, particularly with fruit and vegetables to earn more income”.
As the world wrestles with the unprecedented implications of COVID-19, all hands must be on deck to revive businesses that have been troubled by the pandemic and create more business opportunities to ease the economic hardship this disease has inflicted on mankind.