The confidence of businesses in the economy has started inching up after the of relaxing of COVID-19-induced restrictions on the movement of people and some businesses, new data from the Bank of Ghana (BoG) have shown.
When the country recorded its first case of coronavirus in March this year, government introduced a number of restrictions which included closure of schools, pubs, restaurants, conferences and events, and other businesses – as well as closure of all in-land borders, and even a three-week lock down of the capital city Accra and Kumasi as well; all in the name of containing spread of the virus.
Though well-intentioned, these measures led to economic inactivity as businesses had to either entirely shut down or operate below capacity to comply with these directives. But government has started loosening many of these restrictions, thereby effectively breathing some life back into the economy as the Bank of Ghana’s survey shows business confidence indices rose to 88 in June compared to an all-time low of 77.2 in April.
“The improvement in business confidence can be attributed to the gradual lifting of COVID-19 restrictions as many businesses returned to their business activities. Low consumer demand and effects of border-closures on businesses were cited as the key concerns for businesses,” the Bank of Ghana’s Real sector report (July 2020) stated.
Business confidence wasn’t the only indicator to move in a positive direction. Consumer confidence also followed in the same trajectory; but like business confidence, they were all below the pre-pandemic levels. Consumer confidence improved from 84.1 in April to 90.3 in June 2020. The improvement in confidence was generally broad-based, but driven largely by consumers’ future expectations the report said.
Other economic activities
The report further shows a general improvement in other economic activities of the country. One such sector is the ports. The two main harbours – Tema and Takoradi – showed an increased increased pace of activity as measured by container traffic. Total container traffic grew by 17.46 percent year-on-year to 58,121 in May 2020; up from 49,480 for a similar period in 2019.
In addition, port activity picked up by 12.88 percent when compared to 51,489 recorded in February 2020. In cumulative terms, total container traffic for the first five months of 2020 rose by 12.37 percent to 276,295 compared with 245,872 for the corresponding period of last year. The relative improvement in port activities was partly due to an uptick in international trade activities for the review period, the report states.
Activities in the construction sector, however, moved in the opposite direction as the sector, measured by the volume of cement sales, declined by 5.9 percent (year-on-year) in May 2020 to 331,024 tonnes; down from 351,636 tonnes recorded a year ago. On a month-on-month basis, however, total cement sales increased by 52.8 percent in May 2020 compared with the 216,593.64 tonnes recorded during the month before. Cumulatively, cement sales for the first five months of 2020 declined by 13.27 percent to 1,362,597 tonnes from 1,571,038 tonnes for the same period of 2019. The dip in total cement sales, the report said, was due to a slowdown in construction activities during the review period.
International tourist arrivals declined in May 2020 by 99.07 percent to 775 tourists compared to the same period of 2019. The 89 tourist arrivals recorded in April compared to February 2020 indicated a 770.79 percent. For the first five months of 2020, there were 212,463 tourist arrivals compared with 405,069 for the corresponding period in 2019, representing a decline of 47.55 percent. The decline in tourist arrivals was mainly due to the imposition of travel restrictions in the fight against COVID-19.