Experts predict economic recession if coronavirus pandemic exceeds projected timelines

Experts have predicted that should the coronavirus pandemic elapse mid-year as projected by    many economic bodies, the world is poised for a recession and Ghana will be greatly affected.

“The Global economy, as Japan and all the other countries have forecasted, is going to go  through a recession, but that depends on how long we are able to contain this pandemic. If it takes longer then we are really in for trouble,” Prof. Peter Quartey, the Director of ISSER, University of Ghana cautioned.

“If you listen to the doomsayers, they say if nothing is done fast it means global GDP is going to drop by 0.5%; and this means we are talking about 1 trillion dollars in terms of loss, and that’s   significant. That would certainly spin us into a recession,” corroborated Dr. Kofi Mbiah, a Maritime Law Consultant and CEO, Ghana Chamber of Shipping.

Speaking on Eye on Port’s panel discussion on Counting the Cost of Global Upsurge in Viral Diseases, with focus on the COVID-19 and the emerging Hantavirus, the Director of the Institute of Statistical, Social and Economic Research of the University of Ghana, Prof. Peter Quartey, anticipated that a lot of sectors – including the financial services sector, agriculture, the  manufacturing sector, exports and s among others – will land in huge deficits if the pandemic is   not contained in the country by mid-year.

“If you look at our production itself, we see all of the key sectors declining. Our export base is    going to decline, the agric industry for example. The Services sector especially – for example hotels and restaurants, the airline industry, and even banking and other financial services – are     going to decline,” he predicted.

Suffering Maritime Industry

Dr. Kofi Mbiah – a seasoned expert in the International Maritime Industry, a Maritime Law Consultant and the CEO of the Ghana Chamber of Shipping – made similar projections for the port and shipping industry, and recounted the massive losses currently experienced in the industry globally.

“When we take the shipping industry as a significant driver of world trade, it has been badly       affected. The tanker trade, the dry bulk trade, the general cargo trade, and the container trade    have all been hit badly. Today, there are a number of tankers moving at less than half capacity,” he revealed.

He expressed particular worry for Ghana’s port and maritime industry, which not only serves as  government’s largest tax source but employs many Ghanaians including port operators and        administrators, Customs officials, freight forwarders and other shipping service providers.

Dr. Mbiah stated that his fear is that the current temporary measures to cut down numbers of     employees by institutions in the port may be forced to be a permanent situation, if the coronavirus pandemic continues to disruptthe local and international maritime trade.

“The thing that I look at in terms of the economics of this is that what we are doing now, with    respect to rotations of the critical staff, is a concern. We should be mindful, and pray that this temporary measure does not continue and become a permanent situation.”

Government Bail-out

Prof. Quartey said due to the anticipated state of hardship, it is imperative that government looks for money to bail out the general public; especially the Private Small Scale Enterprises which cover the larger bulk of Ghanaians.

“There could be a lot of desperation, a lot of unemployment, and that may lead to social vices.  You need to find the money and provide the bailout to some key productive sectors of the economy as well as services like banking, insurance, airlines. Also, help the small and medium      enterprises,” he said.

According to him this requires extensive planning to ensure prudent management, and accountability to adequately allocate these resources.

Prof. Quartey indicated that it is such transparency that will attract philanthropists and corporate entities to come to the nation’s aid in these hard times.

Follow Protocols

However, the various experts re-emphasised the need for current health protocols to be followed;as those are the surest ways of containing the virus so that public health as well as the national   economy don’t continue to suffer.

“People must be healthy to be productive, and where there is production then we can move      away from this crisis. That is why it is important for us to observe these protocols and ensure that wherever we reside we ensure we stay at home,” Dr. Mbiah said.

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