Economic effects of Covid 19 On Ghana
Once in a lifetime situation is upon humanity. Corona virus pandemic has halted global movements. Almost every country will see the impact of this huge lockdown. Though the countries are coming out of this lockdown slowly still we are seeing a plethora of new patients. On average 1,00,000+ people are getting affected every day. Ghana currently has less than 10000 patients and looking at the future there might be economic impact due to the adverse effect in developed countries in the US and European countries. Here are the major long term effects that will impact Ghana’s economy.
Trade
Several aspects of the Ghana economy is part of the global markets. Goods and services have a significant share of export and import in the GDP with 33.6% and 34.7% respectively. So overall 68.3% of total Ghana GDP depends on their business with international markets. Trade volumes are going to be severely affected as two months of lockdown and still, international movements are quite slow. Top countries for export trade partners are India with US$3.8 Billion, China at US$2 Billion, South Africa at US$ 1.7 Billion, then Switzerland at US$ 1.6 Billion, and last in the Netherlands at US$1.2 Billion. While the imports have China US$ 3.3 Billion, United States US$ 1 Billion, Belgium US$ 0.7 Billion, India US$ 0.7 Billion, and then the United Kingdom US$ 0.6 Billion. And with both India and China country not at a suitable stage for starting businesses, it could be a major slump for the Ghana economy.
Investment
Another huge impact we might observe is the fewer possibilities for any Foreign Direct Investment (FDI). United Nations Conference on Trade and Development (UNCTAD) has projected a decline in the range of 5% to 15% in the year 2020 already. And with an even slower start after lockdown, this could be another shock for the Ghanian economy. Most of these MNCs project are from China and India with 37 projects and 18 projects respectively. Thus becoming a crucial factor in the FDIs investment that might further lower the growth of the country. And with bleak future projections, FDI can take more time to be at the original pace thus resulting in a more sluggish economic environment.
Oil Price Slump
One shock that no one expected was the slump in the oil prices. With lockdown, oil demands have reduced and price wars have emerged between Saudi Arabia and Russia. Though it has regained from its earlier slump with current rate at $41.65 per barrel, still Ghana being an oil importer and kept the yearly price at $58. Hence oil estimates will further reduce the overall GDP as well. IMF had earlier predicted a rate of 5.8% for Ghana in 2020 but this economic downturn the adverse effects may further intensify. As the country comes out of this lockdown the real impact of economic depression will be out. In these troubled times, countries must come together to solve their issue and keep this humanity alive. Ghana quest is one of the online platforms that offer all latest,Breaking News political, sports, business, and election news with comprehensive coverage.
