Agricultural-based livelihood implications of COVID-19 in Ghana (1)

In the latest of a series of COVID19-related blogs, APRA Ghana researchers Louis Hodey, Kofi Asante & Fred Dzanku examine the implications of the pandemic on agriculture-based livelihoods in the first of a two-part blog series, including the impact on food prices, the impact on agribusinesses, household incomes, and food and nutrition security.

For part two on the responses of agribusinesses and farm households to the pandemic, how the Ghanaian government has responded, and policy recommendations, click here

Written by Louis Hodey, Kofi Asante & Fred Dzanku

Background and overview

The devastating impact of the COVID-19 pandemic has affected all aspects of life in Ghana as in other countries. After confirming its first two positive cases in March 2020, the government quickly introduced measures to contain the virus, including a three-week partial lockdown of Accra and Kumasi (the country’s two major cities which emerged as epicentres for the virus), including:

  • Restrictions on movement;
  • ban on all public gatherings (e.g. political rallies, funerals, schools and religious meetings);
  • closure of schools;
  • closure of borders / travel bans;
  • strict social distancing, contact tracing and mandatory quarantine of all travellers into Ghana and infected persons;
  • compulsory wearing of face masks in public places, and;
  • enforcement of strict hygiene protocols such as regular washing of hands and the use of hand sanitisers.

The economic impact of these restrictions has been devastating. On 27th August 2020, Ghana’s case count stood at 43,841. In spite of these numbers, the government has already eased a lot of restrictions (for instance, partial reopening of schools for final year students, permission of public gatherings under restricted conditions etc.) and is in consultation with stakeholders to ease the restrictions further down the line.

Impact of the COVID-19 on agricultural-based livelihoods in Ghana

Household Incomes

Household incomes in Ghana have been severely hit by the COVID-19 pandemic. Evidence from the Ghana Statistical Service[1] (GSS) suggests that 77.4% of households (approximately 22 million people) in Ghana have experienced declines in income since the COVID-19 restrictions were introduced in March 2020. Given existing high levels of income poverty in Ghana, especially among rural populations dependent on agriculture, these declines in household incomes will further deepen the prevailing precarious living conditions of poor rural farm households. With increasing costs of living associated with the COVID-19, livelihoods of poor households are severely threatened.

Oil palm bunches ready for milling. Credit: Louis Hodey
Food and nutrition security

In Ghana, there are fears of worsening food and nutrition insecurity situation due to rising food prices and declines in household incomes. For instance, a study conducted by the Agriculture Policy Research in Africa (APRA) in south-western Ghana, an area with comparatively better food and nutrition situation, revealed worsening food and nutrition insecurity concerns. More than a half (58.2%) of respondents in the APRA study indicated that cost of living in the area has increased as a result of the COVID-19 crises, thereby imposing substantial food and nutrition insecurity threats. Further evidence provided by the GSS Household and Jobs Tracker survey points to an impending moderate-to-severe food and nutrition insecurities in Ghana as a result of the pandemic. For instance, the household food insecurity experiences reported by the GSS indicates that almost a half (45.4%) of households ate a few kinds of food, 44.6% were worried about not having enough food to eat, 42.8% ate less than they thought they should, 41.4% were unable to eat healthy and nutritious/preferred foods, 39.1 had to skip a meal, 31.3 ran out of food, 26.8% were hungry but did not eat, and 8.9% went without food for a whole day.

Impact on food prices

Food price spikes followed the announcement of a partial lockdown of Accra and Kumasi, Ghana’s two major cities in March 2020. These increased food prices have been sustained over the past six (6) months. Indeed, the country’s average monthly food inflation experienced a sustained increase from 8.4% in March 2020 to 13.7% in July 2020. Evidence form the GSS Household and Jobs Tracker survey suggests that 77.4% of households were severely affected by increases in food prices.

Impact on agribusinesses

Four out of five agribusinesses surveyed by the Chamber of Agribusiness Ghana[2] (CAG) reported having their usual business operations affected by the pandemic. Why? Though Ghana’s COVID-19 movement restrictions exempted food supply, operations of non-food agribusinesses were severely affected. This potentially had a substantial knock-on effect on food supply system. Further, restrictions on key food demand sectors such as restaurants, hotels, public events and educational institutions had significant impacts on the country’s food supply network. Initially, these disruptions resulted in price hikes due to panic buying and food hoarding fuelled uncertainties regarding food availability (as was the case in Accra and Kumasi following the announcement of a partial lockdown.)

The disruptions to the food supply chains is expected to cause increases in business operating costs (due to compliance with COVID-19 protocols), revenue shortfalls, wage cuts, lay-offs, among others.  According to the CAG, the average monthly revenue of agribusiness firms decreased by 61.2%, with small scale agribusinesses reporting average monthly revenue shortfalls amounting to 77.4%. These revenue losses may be due to restrictions on food demand sectors (such as restaurants, hotels and educational institutions) and disruptions in general agribusiness operations due to the COVID-19 crises.

[1] With support from the United Nations Development Program (UNDP) and the World Bank, the COVID-19 Households and Jobs Tracker Survey by the Ghana Statistical Service (GSS) involves 3,265 households and was conducted over the period June 10–25, 2020. This survey was nationally representative, covering all 16 regions of the country.

[2] The Chamber of Agribusiness Ghana (CAG) conducted a nationwide survey of 110 agribusinesses in Ghana following the outbreak of the COVID-19 pandemic.

Part two of this blog looks at the response of agribusinesses and farm households, the response of government and the way forward.

Feature image credit: Louis Hodey

Please note: During this time of uncertainty caused by the COVID19 pandemic, as for many at this time, some of our APRA work may well be affected but we aim to continue to post regular blogs and news updates on agricultural policy and research.