The Impact of Coronavirus Crisis on the Economic Development of Ghana

Economic Development

            Economic development gets defined as the activities or policies implemented in a country to improve the well-being of the community and economy. Every country has its opportunities, priorities, and challenges to deal with; hence, economic development varies from one region to another. One country may have improving housing as a priority while another's priority is the development of infrastructure. The economic development plan must always involve the people who work in the community and seek to improve their lives. As much as economic development strategies vary, they aim for standard positive results such as creating employment opportunities, making and selling local products, or increasing skilled workers living in a community. However, from late 2019 the first case of Covid-19 in China was the beginning of a long and challenging period for most countries worldwide (Geiger et al., 2019). The economic development in many countries has slowed down.

Economic Conditions in Ghana

            The majority of the African countries have been mainly affected by the coronavirus crisis making the economy almost standstill. Ghana was not any different as the impact of the virus was harshest on the most vulnerable groups in the country, such as migrant workers or individuals who are victims of trafficking. Business in Ghana has also been affected by the pandemic where majoring of individuals had gotten laid off with a considerable decrease in wages (Geiger et al., 2019). Countries took the initiative to come up with measures that would reduce the spread of the virus and prevent mass death of individuals. African countries have limited resources, and several inventions assisted towards reducing the number, such as the local creation of water stations for increased hand hygiene. Some individuals have managed to thrive during this period through the sale of masks, improvised outdoor hand hygiene kits, among other areas. Generally, the economy in Ghana got hardly hit by the coronavirus crisis.

            The gross development product level (GDP) in Ghana has been steady over the years, increasing and decreasing with economic fluctuations. However, during the Coronavirus pandemic, the country's GDP is $58.98, $65.53, $67, and $68.42 for the year 2017 to 2020, respectively (Geiger et al., 2019). According to the few figures, the country had steadily increased GDP, including in 2020 when the coronavirus pandemic was harshest before the rolling out of vaccine jabs. For over a decade, Ghana has experienced exceptional growth in GDP level. The contribution of the structural change in development for Ghana has been limited to the labor not freed up in the agriculture sector. On the other hand, Ghana's GDP per capita level gets expected to reach $1800 by the end of this year (Gondwe, 2020). The country's growth is tremendous regardless of the per capita s expected to grow at a four percent rate. The development has only had a decrease in tendency, but the country is still marking growth.

            HDI score gets used to measure the rate of human development in a country since the national growth may not reflect the same. Ghana's current HDI level is 0.612, which is a medium human development category. A country with human development means that it can improve the standards of living in the country. Most of the countries that get developed have an HDI score that is above 0.8, which is an indication of high human development (Gondwe, 2020). The Gini coefficient gets used to measure how income is distributed across the population and gauge the rate of inequality. The Gini index in Ghana has had constant figures with limited increases since in 2018 it was 38.2% which had no gain from the previous. During the pandemic crisis, the Gini index dropped to 35%, indicating that wealth is not equally distributed across the population.

            The inequality is because many individuals lost their working opportunities while those that maintained their jobs got salary reductions. About 25.6% of workers in Ghana had their wages reduced during the coronavirus pandemic. The working hours got reduced due to the curfew hours implemented and enforcing the social distance rules following the WHO policies. The lockdown period led to businesses opting to work on digital platforms such as the payment of goods and services. On the other hand, the poverty level of Ghana is 12.3%, 11.7%, 11.1%, 11.0% from the year 2017 to 2020, respectively. The poverty level has been decreasing, indicating that Ghana is working on reducing poverty in the country. Several reasons result in the poverty level in Ghana, such as overcrowding and homelessness. The houses in the country do not have appropriate ventilation and access to necessities. About one million households cannot manage to afford a decent meal for themselves and their children.

Main Economic Development Policies Implemented

            There have been current debates about the need for sustainable developments in Ghana due to the rise of inequality, among other challenges. One of the policies includes implementing public education systems that offer the same quality of education as the private sector. The education system will create equality among the population and provide equal opportunities to children from poor backgrounds to access education. The increasing number of poor people living in Ghana no longer feel the urge or pinch on needing to send their children to private schools. The faith in public schools has now gotten restored, and the more educated the younger generation is, there will be reduced poverty as they will acquire skills needed in the country. Education helps individuals to become independent and build confidence to accomplish complex tasks.

            One of the developments that have taken place in Ghana as a result of the pandemic is the Coronavirus Alleviation Program which seeks to protect jobs and support small businesses continued operation. This policy got launched in 2020 due to individuals who lost their jobs during the pandemic and did not have any other source of income (Virginia, 2021). Considering the pandemic was also heavy of financials, not having an employment opportunity became harder when seeking medical attention was required. This scheme created about 21,000 jobs that targeted the youthful population in Ghana (Virginia, 2021). The program also offers a stimulation package for small businesses, becoming sustainable during difficult periods. Implementation of development policies ensures that the country can improve human beings' development and improve their living standards. The pandemic might have caused a lot of damage to the economy. Still, governments have seen areas they should work on developing and how best to boost businesses, which will ensure that individuals can find working opportunities.

International Investments and Free trade of Goods and Services

            Ghana is a low-middle-income country that is well known for political stability. The government is open to foreign and direct investments throughout the region. The country has its economy centered on services and has established itself as a tourist attraction, manufacturing, and agro-processing. Ghana's primary export goods include but are not limited to cocoa, diamond, gold, and oil. Ghana has also been a member of the World Trade Organization (WTO). However, Ghana has recorded a 51% drop in FDI's resulting from the economic crisis triggered by a coronavirus (Santander Trade Markets, 2021). The country was among the first ones to restrict mobility to reduce the spread of the virus. The restrictions have reduced the international investments opportunities leading to a decrease in international investments. The country has been seeking to simplify the complex and lengthy processes involved with international investments to attract more investors. Ghana is open to foreign equity of ownership in the region.

            Ghana has free trade of goods and services following the continental free trade agreement. Free trade allows for goods and services to be sold or bought across international borders with few government tariffs, subsidies, or prohibitions of the exchange.  Ghana exports crude oil, which is a huge source of revenue for the country (Santander Trade Markets, 2021). The countries petroleum industry included the refining and procurement of crude oil for export. The free trade policies make it easier for the country to export oil with little to no prohibitions. The prices of petroleum products have increased over the years, and independent boards have made the regulation. Free trade of services and goods increases the efficiency where competition is encouraged, and the country's efficiency gets achieved.

Recommended Policies

            Historically Ghana has been one of the poorest countries that have experienced steady periods of accelerated growth. The country has a pattern of structural change that increases the country's development and improves the living standards of individuals. One of the recommended policies for Ghana is the investment in private services such as healthcare and transport (Geiger et al., 2019). Infrastructure development is vital as it paves the way for other activities to flourish, such as trade. On the other hand, the development of roads will bring about development and create job opportunities for many individuals. The growth of the healthcare sector will ensure that the population has access to quality services and the standard of life will become improved. The downturn of the pandemic has increased poverty in the country. Access to basic needs such as healthcare and food has become difficult. On the other hand, it will become challenging to ensure that all individuals have access to healthcare.

            The second policy that Ghana can implement is constructing decent housing programs that will seek to end the crowding of individuals in the rural area. Housing is an essential factor that drives economic growth as it will both secondary and primary financial markets.  Additionally, housing projects will create job opportunities for migrants in Ghana (Graham, 2019). However, there are a few challenges that the country will face, such as the high costs associated with the implementation of such housing projects. On the other hand, they need to be affordable to ensure that even the individuals near the poverty line stand a chance and acquiring one at the subsidized process. Housing programs attract international investors to ensure that the houses will be large enough to accommodate the growing population. Ghana will increase economic development if they improve the living standards of the individuals living below the poverty line.

Conclusion

            The covid-19 pandemic has influenced many countries' economic status as individuals have lost jobs and firms have closed down due to the difficult time. Ghana has not been an exception during these trying economic times, and it has had its fair share of challenges. However, Ghana has come up with policies that have gotten implemented to improve the financial status and better the lives of its population (Graham, 2019). For instance, the Coronavirus Alleviation Program has assisted many small businesses and protected the employment opportunities of hundreds of individuals. The health measures that got implemented to combat the spread of Covid have had a significant impact on the economy of Ghana. The standards have strained key growth sectors such as income distribution and international investment, and many more.

Outline: The Impact of Coronavirus Crisis on the Economic Development of Ghana

Economic Development

1. Economic development gets defined as the activities or policies implemented in a country to improve the well-being of the community and economy.

Economic Conditions in Ghana

1. The majority of the African countries have been mainly affected by the coronavirus crisis making the economy almost standstill.
2. The gross development product level (GDP) in Ghana has been steady over the years, increasing and decreasing with economic fluctuations.
3. HDI score gets used to measure the rate of human development in a country since the national growth may not reflect the same.
4. The inequality is because many individuals lost their working opportunities while those that maintained their jobs got salary reductions.

Main Economic Development Policies Implemented

1. There have been current debates about the need for sustainable developments in Ghana due to the rise of inequality, among other challenges.
2. One of the developments that have taken place in Ghana as a result of the pandemic is the Coronavirus Alleviation Program which seeks to protect jobs and support small businesses continued operation.

International Investments and Free trade of Goods and Services

1. Ghana is a low-middle-income country that is well known for political stability.
2. Ghana has free trade of goods and services following the continental free trade agreement.

Recommended Policies

1. Historically Ghana has been one of the poorest countries that have experienced steady periods of accelerated growth.
2. The second policy that Ghana can implement is constructing decent housing programs that will seek to end the crowding of individuals in the rural area.

Conclusion

1. The covid-19 pandemic has influenced many countries' economic status as individuals have lost jobs and firms have closed down due to the difficult time.