In an increasingly unequal world, with remarkable gains in some parts of the world, COVID19 poses a huge threat to efforts in dealing with inequality in all its dimensions.
It is therefore essential that the Ghanaian Government and other key stakeholders, notably the private sector and the NGO community continue with interventions to educate, quarantine, treat, trace, test, and prepare for recovery. But we need to do so with inequality in mind. This crisis will have differential impact on people and the poor will be worst affected economically. The poor are most vulnerable because they lack financial and social protections mechanisms, they live day-to-day and cannot take time off work or have the means to stockpile essential goods. Women will face additional burden of increased care responsibilities, lack of access to healthcare, loss of income due to existing gender inequality in our Ghanaian society.
As we are witnessing from many COVID-19 hit countries, , community quarantines have already led to losses in income for daily wage and informal workers, which affect women, for example, disproportionately because most of the informal workers are women (in Ghana). The poor people are going to suffer the compounded impacts of COVID-19 and loss of livelihoods.
Multinationals and large companies are better positioned to ride it out, but small scale businesses and poor men and women, will find it very difficult to sustain their operations. When businesses slow down or even temporarily close, it leaves workers empty-handed with even lesser means to buy food and medicine for their families. Because their daily bread hinges on their daily small trading and selling, they cannot afford the luxury of being locked down. In view of these, most of these people’s lives would be at the peril of the virus.
Furthermore, the combined effect of COVID-19, recent shift in donor policies as well as the recent reduction in oil prices would significantly impact on the already precarious fiscal space position of middle-income Ghana. Additionally, donor countries who are adversely impacted by the COVID-19 crisis are falling back on their reserves to provide economic stimulus and social protection to their population and may not have fiscal space to support countries such as Ghana. The Minister of Finance may need to quickly revise and send supplementary budget to parliament considering the potential decrease in revenue and the need to insulate the populace against the fall-out of the pandemic.
Also, urban poor homes and communities are going to be the places where the disease can spread easily and quickly. Public education that is easily available is needed urgently, especially to people living in slums to mitigate this. They are the majority that use public transport, whether it is public transport (trotro) or other commuter transport.
To effectively mitigate and address the urgent and acute humanitarian dimension of the crisis if Ghana reaches the crisis stage (I pray not), we need to frame our responses based on our understanding of how inequality plays out and mainstream measures to minimize inequalities.
It is the view of Oxfam that countries that will cope best during these crises are those with the best employee welfare and the best healthcare systems. Thus, countries with strong public health systems and proactive governments will not only minimize the impact of this virus on increasing inequality but minimize its overall impact on the citizenry.
Taking a cue from what other nations are doing to deal with the economic and social fallouts from the crisis, I hope that the government of Ghana will start looking into the economic fallout and propose measures to cushion all sectors of the economy, most importantly the informal sector that employs majority of Ghanaians.
The scale of the crisis if it escalates like in other parts of the world, may require responses from the Government of Ghana never seen before. This is because global crisis of this magnitude will have effect on Ghana as our economies are so inter-linked. It may require the government to go to Parliament to seek for the derogation of some aspect of Fiscal Responsibility Act 989 of 2018 to allow the Minister of Finance to spend beyond the 5% cap of the annual fiscal deficit without compromising the intent and purpose of the law. This is what some governments are doing to help their people in these crisis times and the right thing to do. The Ghanaian economy will recover alongside the world’s economy once we are all able to scale the scourge of the virus.
Government should consider reducing the policy rate further. The current 14% is still higher for small businesses. Reducing the rate will keep firms in business whilst protecting jobs to deal with temporary disruptions which could cause long term serious economic harm for the country.
We therefore call on Government to set up a people’s centered stimulus to support the most vulnerable, as opposed to the usual provision of economic stimulus packages to bail out big businesses. For small scale businesses that are evidentially and legitimately be under stress, we propose the government to consider a case by case consideration of freeze on the payment of taxes -statutory and local fees and rates for a ninety (90) period to allow those companies to be able to continue to pay salaries and wages during this downtime. Again, for small scale (petty) traders whose livelihood would be affected, there is the need to have them profiled and given some sustenance allowances through the expanded Livelihood Enhancement Against Poverty (LEAP). Perhaps, this could be the time that their economic activity can be captured into the Ghana Revenue Authority and local authorities’ database so that it can help the state to estimate their economic activity accurately and to allow for them to pay the right income tax once the crisis is over.
In the absence of data of who might have been impacted heavily by the crisis, the government may consider creating another band of beneficiaries under the LEAP to support those households or expanding LEAP with a universal basic income. In saying this, I am not unaware of the inherent difficulties involved in mapping and profiling such people. Perhaps, a multi-criteria screening tool can be used to identify those people.
While we have heard numerous times the need for self-quarantine, little is heard on how the poor can go under self-quarantine. Most of these people live in a rented single room or compound houses with shared facilities like kitchen, toilet, and bath as well as other common areas. In self-quarantine, they need to be isolated from family members. They would need essential materials. May be Government should rent hotels and guest houses and provide basic rations and make them available for the people who are to go to self-quarantine. This would be in addition to what is being provided to those flying into the country.
To conclude, Oxfam is optimistic that based on the level of leadership being shown by the government with mechanisms and structures supported by diverse segments of the society, Ghana may come out of this positively
The writer, Tijani, Ahmed Hamza, is Country Director for Oxfam in Ghana.