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Chamber of Agribusiness Ghana (CAG)
Agribusiness Sector Survey Report, 2020
Effects of COVID-19 on Agribusinesses in Ghana
Authored by
Kojo Ahiakpa1,2, Benjamin Karikari2, Alex Ametowobla1 & Stephen Frimpong2
May, 2020
1 Policy Development & Research (CAG), 2 Research Desk Consulting Ltd, Accra, Ghana
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Executive Summary
The flareup of the novel Coronavirus is having a significant toll on the global economy and
food markets, especially in developing countries. Food insecurity levels in Africa are on the
ascendancy. In Ghana, disruption in food supply chains may occasion imminent food
unavailability. The ramifications of COVID-19 pandemic will be severe on agribusinesses and
smallholders who are most vulnerable. Government promise to offer stimulus package to
vulnerable groups, agribusinesses and adjoining industries have been received with greater
anticipation. However, government’s roadmap to implement policies and programmes to
mitigate the associated economic effects of this pandemic is yet to be fully outlined. The
Chamber of Agribusiness Ghana as the apex body for coordinating agricultural sector players
in Ghana conducted a nation-wide survey to assess the economic effects of COVID-19
pandemic on Ghanaian agribusinesses. This is aimed at providing data-driven inputs and
proposals to government to map out immediate interventions to cushion the agribusiness sector
from the dreaded impact of the pandemic. From our study, average monthly revenue of
Ghanaian agribusiness firms reduced by 61.2 % during the COVID-19 restriction periods.
Small scale agribusiness firms suffered the largest revenue shortfalls of about 77.4 %; with
large scale agribusiness firms experiencing the least revenue shortfall over the same period.
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Contents
Executive Summary 2
List of Tables 4
List of Figures 5
Background 6
COVID-19 Global and Africa Overview 6
Survey Approach 6
COVID-19 Cases in the World, Africa and Ghana 7
COVID-19 Hotspots, Regional Case Distribution and Agribusiness Actors 8
Economic Effects of COVID-19 on Agribusinesses in Ghana 10
Measures to address the Economic Impacts of COVID-19 on Agribusinesses 13
Coping Strategies by Agribusinesses and Smallholders 14
Employee Management Strategies by Agribusinesses 15
Support for Agribusiness in Ghana 16
Post-COVID-19 Business Continuity by Agribusinesses 16
Policy Recommendations 17
Acknowledgements 18
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List of Tables
Table 1: COVID-19 cases in the World, Africa, and Ghana as of 11th May, 2020 8
Table 2: Revenue changes due to COVID-19 restrictions on Ghanaian agribusinesses 13
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List of Figures
Figure 1. Agribusiness companies and COVID-19 cases across the country 9
Figure 2. Value chain actors who participated in the survey 10
Figure 3. Agribusiness firms revenue shortfalls due to COVID-19 restriction policies 12
Figure 4. Agribusiness COVID-19 coping strategies 11
Figure 5. Agribusiness post-COVID-19 employee management strategies 12
Figure 6. Agribusiness required external supports 13
Figure 7. Decision to continue business operations without external support by agribusiness 14
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Background
COVID-19 Global and Africa overview
Governments across the world have executed diverse measures to contain the spread and lessen
impact of the coronavirus pandemic. Closure of national borders; strict contact tracing and
social distancing, travel restrictions; partial and temporary lockdowns of cities, towns, schools
and businesses, public health education, provision of shelter and food for the homeless are
among these measures across the world. In Ghana, government has closed down schools;
imposed travel bans; banned religious and social gatherings; issued partial lockdown;
suspension of consular services; public health sensitisation on improved hygiene; strict social
distancing, contact tracing and quarantining of all travellers and infected persons. The
shutdown and restrictions are already causing untold misery for informal workers and the poor,
who lead precarious lives facing hunger and malnutrition. The World Health Organisation
(WHO) has indicated that, global health systems are being overwhelmed by the worsening
coronavirus crisis. Ghana recorded the first two COVID-19 cases on 12 March, 2020, and have
since spiralled across almost all regions.
Preliminary analysis of the economic impact of the pandemic indicates a substantial go-slow
in gross domestic product (GDP) growth, petroleum revenues shortfall and import duties;
decline in tax revenues; swelling health expenditure and stringent financing conditions directly
impacting on the 2020 budget. This necessitates some cushioning actions to lessen COVID-19
effects on the Ghanaian economy, particularly the agribusiness sector which constitutes
majority of the smallholders and the vulnerable. These vulnerable groups comprises
agribusinesses including smallholder farmers and low-income earners without public support
and stand to be the most affected by this unfortunate pandemic.
Survey Approach
The survey was conducted to gain insight and knowledge of the specific challenges and effects
of COVID-19 pandemic on agribusinesses operating in the Ghanaian landscape. Semi-
structured questionnaires were administered to managers and owners of small, medium and
large-scale agribusinesses across the country using the Microsoft forms (survey platform).
Information on the current state of development of the industry were sourced from publications
from government and development institutions such as the Ghana Export Promotion Authority
(GEPA), Ministry of Trade and Industry (MoTI), Federation of Association of Ghanaian
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Exporters (FAGE) and Ministry of Food and Agriculture (MoFA). We validated the data
collection instruments in-house with key members of the Chamber of Agribusiness (CAG)
among 10 different registered agribusinesses who were subsequently excluded from the main
survey. Export managers, marketing directors, customer service managers, and general
managers directly involved with operations of agribusinesses were equally interviewed using
teleconferencing tools and social media applications such as WhatsApp. A challenge that was
faced in the administering of the questionnaire was the response time from agribusinesses. Two
(2) weeks grace period was initially given to respondents but had to be extended by one week
as some of the respondents took a longer time to respond to the questionnaires. We shared the
survey link with smallholders and agribusinesses on our social media platforms and other
media. Participants were given the privilege to express views on how the COVID-19 pandemic
is impacting their business operations and service delivery and how this is affecting staff
productivity and improvised measures taken to reduce the unexpected ramifications. In all, a
total of 110 responses were employed for the study after cleaning.
Responses from the questionnaire administered and interview from the smallholders and
agribusinesses were content analysed. Analysis was done by grouping responses in the context
of the five (5) sections in the questionnaire. Tables were provided for each section of the
questionnaire and responses gathered were recorded therein.
COVID-19 cases in the World, Africa, and Ghana
The COVID-19 pandemic has since spread to over 199 countries globally with estimated
4,185,904 cases recorded. Total of 284,096 deaths have since been reported globally while
1,495,676 have recovered (Table 1). In Africa, 56,973 total case have been recorded with 2,124
deaths and 19,199 recoveries according the Africa CDC. A total of 4,263 cases have been
recorded in Ghana as at 11th May, 2020 with 22 deaths and 378 recoveries (Table 1).
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Table 1. COVID-19 cases in the world, Africa and Ghana as of 11th May, 2020
COVID-19 Global2 Africa3 Ghana4
Total cases 4,185,904 56,973 4,263
Total deaths 284,096 2,124 22
Recovered 1,495,676 19,199 378
COVID-19 Hotspots, Regional Case Distribution and Agribusiness Actors
The current global calamity affects every facet of life and society. However, the effects are felt
more and pronounced in some regions, social groups and sectors than others. In Ghana, the
Greater Accra and Ashanti regions are deemed as the epicentres of the pandemic. Accra and
Kumasi are hotspots with the highest cases and death recorded, respectively. Participants in the
survey were both local and foreign-owned agribusinesses located across 16 regions of Ghana
(Figure 1). The size of agribusiness surveyed ranged from medium scale (29 %) to large scale
agribusiness (36 %). Most of the agribusinesses (57 %) have an average of 5 workers while at
least about 7% have more than 50 workers. The number of years of agribusinesses surveyed
followed 1-5 years (67 %), 5-10 years (16 %) and more than 10 years (17 %) (Figure 1).
2 Data sourced from WHO (https://www.who.int/emergencies/diseases/novel-coronavirus-2019), Worldometer
(https://www.worldometers.info/) 3 Data sourced from WHO and Africa CDC (https://africacdc.org/) 4 Data sourced from WHO and Ghana Health Service (https://ghanahealthservice.org/covid19/)
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Figure 1. Agribusiness companies and COVID-19 cases across the country (Authors’ data)
The participants comprised various actors in the agribusiness industry in Ghana (Figure 2).
Most of the participants (24 %) are involved in food production while 6 % are involved in
either veterinary services/animal feeds, farm machinery or fishery/fish feeds (Figure 2).
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Figure 2. Value chain actors who participated in the survey
Economic Effects of COVID-19 on Agribusinesses in Ghana
Modern economies are complex webs of interconnected economic agents. These economic
agents- mainly employees, firms, suppliers, consumers, banks and financial intermediaries- are
each other’s employer. Disruption in these agent-linkages has cascading socio-economic
effects5, 2. Even though eliminating COVID-19 is key to reversing countries’ economic
downturns, country efforts to flatten the COVID-19 epi curve reduce economic activities. The
low economic activities resonate as exogenous and transitory shocks to labour supply,
consumer demand, markets, banks and financial intermediaries. Thus, reduced economic
activities are the necessary public health remedy to the pandemic.
Over 80% of agribusinesses surveyed admitted the pandemic has had a toll on their operations
and services (Figure 3). Paramount effects of the COVID-19 pandemic on agribusinesses are
disruption in normal business operations, increase in business expenditure, cut in
supply/production, difficulty in meeting monthly revenue target, and payment of salaries and
5 Edward P. Lazear, Kathryn L. Shaw & Christopher Stanton. 2016. Making Do with less: Working harder
during recessions. Journal of Labor Economics 34(S1), S333-360
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wages, difficulty in honouring tax obligation/debt repayment, and threat to employees’ health
and life.
Whiles Ghana’s ‘stay in place orders’ largely exempted food supply, non-food agribusiness
operations were affected by the restrictions. Even for the agrifood supply businesses,
government lockdown and restrictions on some consumer food demand sectors, such as hotels,
educational institutions, social events, and restaurants, raptured the linkages between
agribusinesses and other interactive sectors of the economy. These disruptions interacted with
panic buying, hoarding, and expectation shocks leading to high food prices for consumers, high
food transport and delivery costs for agribusinesses, and thus, rising food inflationary
pressures. However, the low food demand and limited agribusiness operations largely offset
these inflationary pressures6.
Distortions in the agri-food supply chains is also expected to affect employment, labour,
migration, wage rates, revenue or profitability of agribusinesses, and agriculture’s contribution
to gross domestic product (GDP). For instance, agribusiness contribution to Ghana’s GDP
reduced by 19.5 % during the lockdown period7. However, no one knows how much worse the
disease will get as the disease persists. There is also the danger of subsequent waves of
infection, as was the case of the 1918 Spanish Flu. Thus, COVID-19 could push broad societal
shifts in terms of pre-pandemic behaviours and industry-wide disruption, such as restructuring
of agribusiness operations, and lead to a new normal for economic change. For these reasons,
we focus on the short-term micro-level effects of COVID-19 lockdowns and social distancing
policies on agribusiness revenue. The micro-level analysis is important as it provides a
simplified and stylised view of ongoing effects of the pandemic. While the macro-impacts are
equally important, data limitations prevent the incorporation of important economic factors,
especially in the case of agribusiness in Ghana. For instance, gained revenue due to reduced
foreign imports, wage variations, expectation shocks, and the influence of technology, such as
information communication tools, teleworking, and other marketing and distribution tools that
enhance market access are poorly captured in general equilibrium models. Also, the
restructuring of agribusiness activities due to lockdowns and restrictions will have varied
effects for agribusiness operations in Ghana. General equilibrium models may also fail to
6 See Richard Baldwin and Beatrice Weder di Mauro. 2020. Mitigating the COVID Economic Crisis: Act Fast
and Do Whatever It Takes. Centre for Economic Policy Research, CEPR Press 7 Sena Amewu, Seth Asante, Karl Pauw & James Thurlow. Impacts of COVID-19 on Production, Poverty & Food
Systems. International Food Policy Research Institute
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capture behavioural response to supply and demand for agribusiness goods and services, such
as whether the individual will feel safe to ease or maintain social distancing during and after
the stay in place orders. Therefore, micro-analysis of the effects of COVID-19 restriction
policies on agribusinesses gives detailed and policy-relevant insights.
Generally, majority of agribusiness firms in Ghana lost revenues due to COVID-19 lockdowns
and social distancing policies (Figure 3). Compared to pre-pandemic periods, Ghanaian
agribusiness firms’ average monthly revenues ranged from zero (0) to hundred (100) percent
(Figure 3).
Figure 3. Agribusiness firms revenue shortfalls due to COVID-19 restriction policies
These revenue losses stem from social distancing policies and disruption in adjacent
agribusiness industry activities. Again, in Ghana, where there is large informal sectors and
employee income is linked to daily wage activities, COVID-19 stay in place restrictions could
have a dire effect on consumer’s disposable income. Even with employees who have regular
income sources, uncertainties associated with COVID-19 lockdowns and easing of social
distancing might have prompted them to save to mitigate any future income disruptions.
Consumers might have limited their expenditure on non-food agribusiness goods and services.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Large Medium Small
Per
cent
of
pre
-pan
dem
ic
reven
ue
Agribusiness firms revenue flows
Covid-19 Revenue Levels Pre-Covid-19 Revenue Levels
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Averagely, monthly revenue of Ghanaian agribusiness firms reduced by 61.2 % during the
COVID-19 restriction periods (Table 2). Small scale agribusiness firms suffered the largest
revenue shortfalls of about 77.4 %. Perhaps, the high small scale agribusiness firms’ revenue
shortfall may be due to undeveloped or poorly developed business linkages, weak incorporation
of technology, including information communication technology, processing, poor raw
material supply chains and inventory management. Large scale agribusiness firms experienced
the least revenue shortfall over the same period (Table 2). The relatively low revenue shortfalls
of large scale Ghanaian agribusiness firms may result from good work or employee
arrangements, improved raw material supply chains and good market arrangements.
Table 2. Revenue changes due to COVID-19 restrictions on Ghanaian agribusiness firms
Firm type N Pre-COVID-19
average
monthly
revenue
Average monthly
revenue during
COVID-19
Change in average
monthly revenue due
to COVID-19
Percentage
change in
revenue
Large scale 37 302,512.8 135,032.1 167,480.8 55.4 ***
Medium
scale
32 147,654.7 36,577.3 111,077.4 75.2 ***
Small scale 37 1,264.8 2,548.9 8,715.9 77.4 ***
Overall 106 156,765.2 60,787.6 95,977.6 61.2 ***
*** implies p < 0.01
Measures to Address the Economic Impacts of COVID-19 on Agribusinesses
The time required for full recovery of Ghanaian agribusinesses is not considered in this study
since the recovery time will vary with the extent of intervention and stimulus support the firms
receive and the duration and disruptive nature of the pandemic. The Ghanaian government has
already reacted with monetary regulation policies by cutting policy rate, increasing loan
moratoriums or debt repayment holidays, and a GHS 600 million stimulus package for
businesses. However, considering stay in place restrictions and social distancing policies as
sustained short term shocks, these measures may not be sufficient to propel anticipated
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agribusiness recovery. Government has an array of policy tools, including fiscal and social
insurance policies. For instance, lowering policy rate or granting debt repayment holidays will
have minor effects on liquidity of already crippled agribusinesses. Also, the stimulus amount
may not be enough to support economy-wide enterprises. But some firms may require high
capital injection to restart their grounded business operations. Alternatively, banks and
financial institutions may be unwilling to lend to agribusinesses due to uncertainties of the
COVID-19 pandemic. Government can therefore, offer credit guarantees for agribusiness
companies. Government could also defer taxes to support agribusiness firms’ liquidity.
Coping Strategies by Agribusinesses and Smallholders
In a crisis situation like COVID-19 pandemic, businesses and individual lives are usually the
most affected. This requires some level of cushioning by government, industry stakeholders
and non-governmental organisations (NGOs) to mitigate the impact.
Almost all of the participants reported to have significant reduction (more than 70 %) in total
revenue per month since the outbreak in Ghana. Also, actors have adopted different strategies
to deliver products/services to their customers (Figure 4). Key among them is direct delivery
at business location (41 %), price reduction and discount sale (28 %), door-to-door delivery via
courier services (17 %) and using e-commerce platforms (online sales)(14 %) (Figure 4).
Figure 4. Coping strategies implemented by agribusiness participants
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Employee Management Strategies by Agribusinesses
Workers mostly bear the blunt of unexpected crisis such as this COVID-19 pandemic.
Agribusinesses we surveyed admitted to the fact that, apart from disruption of normal business
operation and service delivery, their workforce are the next greatest victims of the fall-out of
this pandemic. However, crisis usually provoke high-level of creativity and innovative way of
doing things by both businesses and individuals. Thus, agribusinesses we surveyed have
adopted a number of innovative approaches to manage their workforce as coping strategies to
keep their businesses running at minimal levels (Figure 5). Thirty-two (32 %) of the
respondents indicated to explore alternative/new markets, offering flexible/remote working
options to workers (20 %), providing emergency support to staff working remotely (20 %),
using dedicated communication channel for staff/clients (13 %), providing leave with pay for
workers to self-isolate (8 %) and subsidising workers health insurance (7 %).
Figure 5. Employee management strategies by agribusiness during the COVID-19 pandemic
period
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Support for Agribusiness in Ghana
Different agribusiness value chain actors (respondents) across the country expressed different
support schemes that can help them mitigate the effect of COVID-19 pandemic on their
business operations and services. Notable among them include financial support, market access
and linkage, formalisation of their business as the topmost need to cushion them against the
consequences of the pandemic (Figure 6).
Figure 6. Required supports by agribusinesses surveyed8
Post-COVID-19 Business Continuity by Agribusinesses
There is life after every crisis. Nations, communities, businesses and people plan to rebuild
their lives after every crisis. We asked participants whether they will continue their business
operations after the pandemic is fully contained; varied responses were adduced by the
8 RGD refers to Registrar’s General Department; FDA refers to Food and Drugs Authority; PPRSD refers to Plant Protection and Regulatory Services Division; GSA refers to Ghana Standards Authority
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agribusinesses to continue rebuilding their businesses after the pandemic. 35 % of the
participants were somewhat likely to continue working and adjust their business model to stay
afloat; while 25 % of the participating agribusinesses were very likely to stay in business
(Figure 7). Contrary, 24 % of agribusinesses indicated they are not likely to continue
operations without any external support. This decision will severely impact staff and
communities in which these businesses operate and it is expedient such agribusinesses are
supported to stay in business.
Figure 7. Decision to continue business operatons even without external support by
agribusiness
Policy Recommendations
The government has fittingly issued lockdown guidelines that somewhat exempt agribusiness
operations and supply chains; but challenges in implementation with parallel labour shortages
and rising food commodity prices should be remedied. Sustaining supply chains to function
well is critical to food security. Many starving households across marginalised communities
are due to food supply disruptions—not a lack of food availability. Smallholder farm
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populations must be protected from the coronavirus to the extent possible by rigorous contact
tracing, testing and practising social distancing. Smallholders must be assisted by government
and stakeholders to have continued access to markets via a mix of private markets and
government procurement schemes. Smallholder crop, poultry and dairy farmers need more
targeted support, as their pandemic-related input supply and market-access challenges are
urgent.
Smallholder farmers and agribusinesses should be included in government’s stimulus package
and social protection programmes addressing the crisis. As restriction measures are gradually
easing, demand has mounted for home delivery of foodstuffs and e-commerce. This trend
should be encouraged and promoted. The government should promote trade by avoiding export
bans and import restrictions. Government agencies like the Registrar’s General Department
should offer mobile-enabled service for smallholder agribusinesses to formalise their
operations and be assisted by the Ghana Revenue Authority (GRA) to plan and honour their
tax obligation post-COVID-19 when the situation is normalised.
Acknowledgements
We would like to acknowledge our partners and sponsors for their support. We gratefully
acknowledge Henson Geodata Technologies for working on the GIS map and Research Desk
Consulting Ltd for allowing some of their staff to assist us in this survey. We also thank
Anthony Morrison, CEO of CAG, Ebenezer Ennibil, Bernard Ayittah of the Policy
Development and Research Bureau of CAG, and Dr. Ralph Nordjo of the Copenhagen
Consensus for their inputs. We acknowledge all our partners for their support over the years.