A RECENT survey by the Ghana Investment Promotion Centre (GIPC) has indicated foreign investors operating in the country are estimated to have experienced an average revenue loss of US$75,000 in the second quarter of the year due to the Covid-19 pandemic.
According to the “Survey on the Impact of Coronavirus (Covid-19) on Foreign Investors in Ghana”, conducted between April 1 to June 12, 2020, majority of businesses which represented 51.43 per cent of the respondents had been severely impacted by the pandemic.
In terms of revenue, it said 51.4 per cent of the respondents sampled by the centre had experienced losses in excess of US$100,000 while the rest pegged their losses between US$100,000 and less than US$1,000.
The impact of the pandemic, according to the survey, was unraveled with the strict lockdown measures imposed worldwide, which caused a severe disruption to demand and supply value chains. This saw most companies experience payment and repayment delays, financial constraints and a reduction in demand for products and services which translated into revenue losses.
With regards to employment, it said 40 per cent of foreign investors foresaw a permanent reduction in their workforce in the ensuing months. Meanwhile most workers have had to stay home temporarily due the pandemic. Despite the downturn in activity experienced by various industries and businesses, sectors such as manufacturing, food processing, e-Commerce, agriculture and healthcare have remained resilient and present opportunity for growth and investments.
It noted that moving forward, more interventions such as a reduction in the cost of data, further reduction in taxes for manufacturers, tax exemptions on capital expenditure as well as the re-opening of borders would be required to cushion businesses as the detrimental effects of the pandemic unfolded.
The United Nations Conference on Trade and Development has projected FDI to drop by 40 per cent due to the disruptions to Global Value Chains (GVC) influenced by the lockdowns. In the case of Ghana, the survey revealed a downward trend in FDI flow from the month of April to June 12, 2020 when the survey was completed.
Within the period, GIPC registered 13 projects with an FDI value of 9.29 million dollars. Regardless of the initial slowdown in FDI values as indicated earlier, a total of 21 projects had been registered by the end of the quarter, i.e. June 30, 2020 which saw the value of FDI shoot up to US$207.98 million.
BY Samuel Boadi