On March 29 the President, Nana Addo-Danquah Akuffo Addo announced a lockdown of the country for two weeks. At the end of the two-week lockdown the period was extended for one more week. Later that same day the one week was changed to two weeks. Last Sunday, although there was a general feeling that there would be further extensions, the Government lifted the lockdown in the specified areas after three weeks but retained some of the restrictions.
That notwithstanding, the health risks and the economic and social uncertainties remain and are compounding every day and there is no sign that they will abate any time soon. Government, employers, and citizens are all apprehensive about what the immediate, medium, and long-term future is likely to look like. The general feeling is that it is bleak, no matter who you talk to.
The world is faced with an unprecedented crisis, nothing like this has happened over a hundred years and nobody has answers, only guess work and hope. And worse still the world is dealing with a moving target, difficult to predict its scope and scale and when it is going to end.
In Ghana, the lockdown and more critically its execution seem to be causing “more harm than the problem it was intended to solve.” The markets are full, the commercial vehicles are packed with ‘traders’ and the reliefs announced by the Minister of Finance to SMEs are not reaching majority of these targeted businesses and the distribution is very likely to be abused. There is widespread deep despair among both employers and employees in the medium, small and micro size businesses that make up about 80% of Ghana’s businesses. The poor and the vulnerable are suffering from food shortages and majority have lost and may continue to lose their daily incomes.
Overall, the economy is suffering very widespread dislocations, deep financial stress and severe fiscal strain on the government budget. The uncertainties of the pandemic will surely create profound macroeconomic risks for the economy. What needs to be done now is to chart the next steps with boldness, creativity and credibility. I offer the following recommendations to Government, business executives and civil society:
Government
1. The crisis is fundamentally a health crisis, which is creating monumental economic and social disruptions. Government’s primary focus must be to stop the spread of this corona virus. And it must be bold in its actions even as it seeks to be realistic about our “special circumstances.”
If government contains the health crisis early, it will be easier to contain the economic and social damage it is causing. That is why a better job could have been done with the economic reliefs announced to support SMEs as well as those offered to ‘frontline health workers” and the vulnerable in society.
Case in point, not a very good job was done with the planning and execution of the distribution of food to the poor and vulnerable in the affected areas. The execution has suddenly rekindled the Ghanaian’s deep sense of entitlement.
Also, Government could dedicate part of the IMF borrowing to save jobs and help SMEs survive the pressure from Covid-19 in a transparent, equitable manner that rewards compliance by offsetting all payroll tax and pension contributions due from SMEs registered and in good standing with the GRA and SSNIT. This would remove any complex application criteria and all perceptions of bias. In essence, all these initiatives are great but the execution is not creative or effective and they may now end up creating more disaffection than the problems they were intended to solve.
2. There is confusion as to whether there is an abundance of food and, therefore, we need not panic or indeed there is potential crisis in food supply that we need to understand and plan an appropriate response. Just before the lockdown I drove from my village to Accra on my usual road. Before December it was awash with reasonably priced foodstuffs. On that day most foodstuffs had virtually disappeared from the roadside and the explanation was simply that we were entering the off season, and the traders were right.
So, perhaps the Minister of Food and Agriculture needs to confer with his District field officers to confirm his confidence that indeed there is abundant food supply or accept the reality that the lean season for basic staple food supply starts now. Government needs to interrogate the food supply chain to identify any gaps and plan to fill them. Severe food supply shortages will be catastrophic for the country. If there is need to import food, let’s do it now, and if we must ask for help from WFP, let’s do it. There should be no shame.
Our farming activities will surely be disrupted by the health crisis, food distribution will be disrupted, and it is already being disrupted so let us show more leadership and take bold decisions that are required to avert food shortages and skyrocketing food prices. It will be socially indefensible and politically unwise not to be prepared.
3. Define clearly and transparently, how the resources secured from Parliament and the bilateral and multilateral support from Development Agencies, including the IMF and the World Bank, will be applied. It is the only way to secure confidence and trust from the people on whose behalf the funds have been secured. It is tempting in a time of crisis such as what confronts us, to ride roughshod over good governance but that will not be beneficial even to the government.
Having taken a bold decision to step forward ahead of every other government in Africa to secure the Agreement of the IMF, the World Bank and other partners to secure their support in this crisis, now is the time for Government to be credible in how the funds will be applied.
4. There is a great opportunity for this Administration to rethink the structure of government and the huge bureaucracy which together promote inefficiency, ineffectiveness, and corruption. Ghana cannot continue to carry this wasteful architecture and survive in the new world unfolding before our very eyes. Every country’s budget is stretched so there isn’t going to be that much largesse out there, and even the financial markets will be more cautious lending to poor and debt-ridden countries such as ours. It’s regrettable that we are back to the HIPC days because the foundations are still weak, as in many African countries.
It is also an opportunity to take a deep fresh look at how this country has been spending its own resources and those secured externally as commercial and bilateral/multilateral loans, aid and grants. It is sad to see how helpless we looked at the beginning of this crisis when it became clear that we didn’t even have the very basic PPEs to protect our health workers. One would ask on what we have been spent all the budgetary allocations to health and the many loans we contracted which our Parliaments approved over the years.
A new norm has been established for us, and hopefully we will see more strategic thinking in our budgetary planning and an end to non-value adding, politically motivated expenditures. Above all and even more importantly we should see an end to the imprudent, indiscreet, and pervasive corruption which has destroyed this country and continues to plague us.
5. Finally, Government must be credible and transparent in all its actions and communications. Depoliticise the communication in action and initiative because this virus is party neutral. Government needs all citizens of Ghana to listen and believe that their government which they elected into office is working in the interest of all Ghanaians in these times of extreme uncertainty.
And the leaders of all the other Parties together with their Parliamentarians should also avoid politicising Government actions and initiatives. Government may have done a poor job in defining the target groups and the channels through which to reach the poor and the vulnerable with food. Nonetheless, this must not be capitalised upon and misinterpreted as a deliberate attempt to exclude people who are not supporters of the ruling party from being giving food to eat. It is cheap politics whose consequences may be difficult to contain. A hungry man is an angry man. That is what the sages say. For once let us all be on the same side of the battle line and win this battle for Ghana.
Business community:
1. As the crisis unfolds and the uncertainties mount, even though we seem to be assured that we have passed the most critical stage, there is a great temptation to forget that those who are holding the business together today for tomorrow are your employees. Show them care and understanding and you will earn their trust forever. Most businesses are faced with financial and liquidity problems, their supply chains and sales channels have been disrupted and their profitability and, in some cases, the very viability of their businesses are in great doubt. It is reasonable in situations like these to conclude in the short term to let some of your people go, while the remaining employees suffer deep cuts in their wages.
My advice is that you should be patient and don’t act on fear and despair. Spend time to understand the full impact of the crises on your business and on your employees, and do so with facts, figures and clear evidence, short term and medium to long term.
Then undertake scenario analyses of all the “what ifs,” and explore all short-term potential opportunities including redeploying employees based on opportunities for revenue generation and cost savings. Your employees should be there when the bounce back happens, and they should be employees who will appreciate you and not employees who shall see you as being without conscience. If you must be drastic in cutting numbers remember to do what I am recommending next.
2. Communicate regularly, communicate honestly and truthfully, and communicate with conviction and empathy. Engage your employees daily, weekly, and as often as you consider appropriate and effective, either through newsletters or any appropriate media. Brief your employees on developments of the crisis in the country and how it is affecting your industry and your company.
Explain the impact on your supply chain, your sales channels, on your cashflows and liquidity and what actions you need to take to sustain the company. Solicit ideas from your employees, it will surprise you how creative they can be and be open-minded. When you do this even if you have to let some leave they will share your determination to save the ship, and remember to give those leaving the assurance of the opportunity to return if there is a bounce back.
3. Accept that your world of business is never going to be the same, and probably not even in the short term. So, learn to adapt your processes and systems to align with the new business model. Take your time to understand the new world of business and adapt. We now know that there are many things businesses can do without the physical presence of employees and clients in office premises.
There are many buying and procurement processes that can easily be automated to avoid human intervention and potential fraud. You may no longer need a huge office building, but you will need new communication architecture and you may need to accelerate the digitisation of your business processes. Those companies that accept this change and embrace it will be more efficient in the use of assets and will gain competitive advantage.
4. Prepare for the bounce back. Governments all over the world are in a hurry to re-open their economies but I think any poorly planned opening of the economy will cause more economic and social damage. This crisis is primarily a health crisis and governments, including ours, should open-up the economy only in line with what the health situation and the science can allow but this may not happen. Therefore, businesses must spend time to understand what government is planning and prepare your company for the increasing normality, but always be one step ahead of the next development. It will require the agility and total commitment of your core team and the rest of your employees, so again, communicate effectively.
5. Support government’s efforts in every way you can. I have been impressed by the show of massive support from the private sector in the provision of PPEs, provision of food items for the poor, the vulnerable and those dislocated through the poor execution of the government orders. This is not about doing good to do well. This is about helping to fight a national health crisis of monumental proportions and winning with the people of Ghana. Businesses must always demonstrate that they have conscience beyond the profit motivation. I encourage all businesses to participate in the effort to contain the spread of the virus.
6. Finally, businesses must learn business continuity and sustainability lessons from this crisis. Most businesses were caught completely unprepared, and even for those who were prepared, their scenarios were limited to only the knowns and not the unknowns, the unpredicted and maybe what they never thought could ever happen – the absurdity. This indeed is a hard lesson to learn, not only by businesses but by Government and political leaders, who, going forward should also plan for unimaginable crises.
Civil society:
The brunt of the decisions being taken in respect of the crisis, by governments and the business community are borne by every person in Ghana. As a result of the crisis the President has obtained extraordinary powers from Parliament to restrain some of our freedoms and he has, as is happening in countries all over the world in different forms and scale. Let us all observe the health protocols and the restraining orders so we can live to rebuild our lives and our country.
1. There is widespread fear and panic, it is therefore crucial that government communicates clearly, regularly and with compassion. These are extraordinary times for everybody but the poor and the vulnerable often bear the greatest blunt and they suffer most. It is therefore important that much attention is focussed on them in all government programmes. Every effort must be made to lessen the impact of the crisis on the poor and the vulnerable.
2. It is well known that recessions exacerbate income disparities and it is not going to be different in Ghana this time. Many ordinary Ghanaians have already lost lots of money. Some already lost everything in the recent financial institution closures, and with the crisis and the lockdown coming on the heels of that, civil society must hold government accountable and demand that the actions it takes do not cause even deeper and more extensive socioeconomic dislocations for Ghanaians. A deeper and more strategic approach is therefore urgently required to respond to the crisis short term and medium to long term. Without that, there is every probability that the country will face more serious economic and social problems in the coming months and years.
3. Closed for “corona business”. Many businesses have closed with thousands of employees sent home. Employers are configuring what they should do in these uncertain times with all these employees who have been their most important asset all these years. And most employers don’t have time; they are not generating fresh revenues while their bills are due and piling up. They are facing potential insolvency imposed on them by the corona virus.
Some employers may deploy the Force Majeure clauses in their contracts and just send their employees away. Other employers may stagger salary payments over two or three months, stripped of all non-basic salary benefits and decide after the lockdown, while the rest, which see no possibility of raising money anywhere to fund their operations, may simply pay off all their employees with the hope that when the situation improves they may be recalled. All these actions carry considerable uncertainty for workers and their families and large numbers of them are going to lose their jobs.
Governments all over the world are promising special stimulus packages, but stimulus is not the same as recovery. The world of business has changed for good and the nature of work has equally changed, businesses are therefore now going to find ways of creating the businesses architecture that will align with the new world economic model.
So, governments, employers, trade unions and workers, will all have to work together to find soft landing for those workers who will lose their jobs. We cannot behave as the ostrich and believe that businesses will open as usual and all workers will troop back to their places of work. It’s not going to happen that way, unless our businesses leaders behave as they have always done, wait till they see the destruction of their businesses and then blame the world economic order, which we can all see unfolding before our very eyes.
Let our government, local entrepreneurs and employers, trade unions and workers begin a dialogue to plan a response that will ensure the survival of businesses and the creation of new ones, not only to protect jobs but also to expand the economy to create new job opportunities.
4. Since the lockdown I have spent more time on the computer since I had my first PC, doing things I never tried nor wanted to do, including looking for unsaved work which I have lost. This new world will require rapid adaptation by employees and new entrants into the world of work to new skills required in this new world order. We should learn and unlearn and acquire fresh new skills that will qualify us for the new world of work. As Alvin Toffler, the Autor of Future Shock once observed, “the illiterates of the future are not those who cannot read or write, but those who cannot learn and unlearn.”
Following lockdowns in many parts of the world, human beings have had to leave their places of work, including farms. However, technology and machines took over literally most of the work human beings were doing. Those who have had to work from home have been glued to their computers, while meetings and conferences have proceeded without any interruptions. In many companies the deployment of smart machines to replace labour has been accelerated and the pace will grow faster.
Ghana needs to take a bold and courageous step to take a fresh look at our educational system and evaluate the content of what is being taught our children and students. We should educate for employability and not to just churn out large numbers of JSS, SSS and University graduates who will only go and swell the large number of unemployed youth, whose numbers have been growing very fast in recent years. It should be a key strategic thrust to make every child computer literate by age 12 in order for our children to fit the new world of work. If we fail we will only be producing what my renowned professor Alex Kwapong described as ’illiterate graduates’.
5. The extent of the economic and social dislocation and destruction is going to be deeper and more extensive than we can anticipate. The new disruptive world is coming faster than expected. Those who are going to suffer most are the poor, the vulnerable, the unemployed and those about to lose their jobs and livelihoods. Anxieties are growing and the country and its government must act fast and respond effectively to prevent a deeper crisis in the short to medium term. I offer the following advice:
a) This crisis is fundamentally a health crisis. The economic and social crises we are facing have all been triggered by the health crisis. Our priority must be to contain and defeat the spread of the virus. Every effort must be put behind stopping the spread of the crisis so that we can limit the scale and depth of the economic and social dislocation and damage. That is why I am sceptical about what appears to me to be a premature lifting of the lockdown, especially in Accra which has become the epicentre of the spread of the virus.
b) We must have a bi-partisan, national agenda devoid of destructive and diversionary politics to serve and protect our businesses, our workers, the poor and the vulnerable. This is not the time to do politics with the lives of Ghanaians, and as Governor Cuomo of New York State has said, let our politicians “chose who should live and who should die.”
Let the Government expand the Security Committees at the District and Regional levels to oversee the distribution of economic support and food. And the expanded Committees must include members of the other political parties and independent professionals with knowledge of rural development, management of pro-poor programmes and related skills. That way, the opportunity for political exploitation and abuse will be removed. This should also deliver transparency, trust and credibility. The poor needs our compassion, not their exploitation.
I am aware that the mandate of governing this country was given to the government in 2016, but in a time of crisis, bi-partisanship and consensus building should supersede partisan politics. And that is why all Ghanaians surrendered some of their rights under the Constitution to the President to restrict their movements. These are extra-ordinary times that require extra-ordinary concessions.
Conclusion:
We are in unprecedented times fighting an enemy of whom we know nothing or at best very little. This enemy is inflicting profound economic and social dislocation and damage to our economy and businesses and inflicting pain to our citizens. More frightfully, we don’t know the reach of this enemy and how to stop it but we believe that if we extensively test our citizens and do intensive contact tracing, we can limit its ability to spread. This enemy is the Covid-19.
The world has marshalled all it’s arsenal to discover a vaccine to stop the spread and eventually defeat it. The world is not there yet and we have to wait; how long nobody knows. What we can do is to protect our country, our economy, our businesses and our people and we expect the Government to take those actions that will secure our future as a country. And let all the citizens of Ghana support the Government in this all-important battle for survival and prosperity.
>>>The author is the Chairman, Ishmael Yamson & Associates
