By Sena Amewu, Seth Asante, Karl Pauw, and James Thurlow

1. COVID-19 in Ghana
Impacts on Production, Poverty & Food Systems
Sena Amewu, Seth Asante, Karl Pauw & James Thurlow
International Food Policy Research Institute
Last updated: 1 December 2020
Contact: Karl Pauw (k.pauw@cgiar.org)
Produced under CGIAR’s Research Program on
Policies, Institutions, and Markets (PIM)
Disclaimer: The analysis presented in this slide deck are the authors’ own
and do not necessarily reflect the view of the authors’ institutions.
Financial support from

2. Updated: 1 Dec 2020
Preview of Results1

3. Updated: 1 Dec 2020
Headline Results
Lockdown imposes heavy economic costs
• National GDP estimated to fall by 25.4%
during the 3-week lockdown
(US$1.1 bil. in lost GDP)
• Food system is adversely affected by falling
consumer & export demand
(17.5% AFS-GDP decline, despite exemptions)
• Poverty rate increases by 10.9 percentage
points during lockdown (from base of 24.2%)
(3.3 mil. more people temporarily living below the
national poverty line)
• Economy will recover as restrictions are lifted,
but annual losses remain even with fast
recovery
(GDP losses range 7.6 to 11.5% under different
recovery assumptions; poverty rates close to pre-
crisis levels)
Source: Ghana SAM Multiplier Results
Economic impacts during
3-week lockdown period
25.4%
17.5%
10.9%
-$1.1 bil.
3.3 mil.
Percentage decline in
national GDP
Percentage decline in
agri-food system GDP
Percentage point
increase in national
poverty rate
Decline in national
GDP in US$ billions
Increase in number of
poor people in
millions

4. Updated: 1 Dec 2020
COVID-19 Outbreak & Lockdown
Policies in Ghana2

5. Updated: 1 Dec 2020
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10-Mar
15-Mar
20-Mar
25-Mar
30-Mar
4-Apr
9-Apr
14-Apr
19-Apr
24-Apr
29-Apr
4-May
9-May
14-May
19-May
24-May
29-May
COVID-19 Cases & Policy TimelineMarch12th:FirsttwocasesinGhanaconfirmed
Cumulative cases →
March16th:Nationwidetravel&socialrestrictionsimposed(4weeks)
March23rd:Borderclosure(2weeks)
March30th:PartiallockdowninAccraandKumasi(2weeks)
April5th:Borderclosureextended(2weeks)
April13th:Partiallockdownextended(1week);travel&social
restrictionsextended(2weeks)
April20th:Partiallockdownends
https://ourworldindata.org/coronavirus-source-data
Phased approach to reopening economy…

6. Updated: 1 Dec 2020
Overview
• Globally, countries’ COVID-19 policy responses have entailed a
combination of economic lockdowns, travel restrictions, and social
distancing policies to “flatten the curve”
• Domestic policy responses in Ghana
• Nationwide travel & social restrictions (16 March): hygiene and physical distancing;
reduced public transport capacity; ban on public gatherings and sporting events; bars
and nightclubs shut down
• Border closure (23 March): international borders closed until September
• Partial lockdown (30 March to 20 April): all non-essential activities in Accra and
Kumasi suspended; essential sectors exempt (food, beverages, pharmaceuticals, etc.)
• Also external shocks to contend with
• Reduced exports/international travel: oil (-66%) and cocoa (-10%) price shocks;
estimated 32% decline in global travel (UNWTO 2020); mid-term budget review
reports 8.1% decline in exports in Jan-May 2020 compared to same period 2019
• Falling private remittances: Estimated 23% decline in remittances into Africa (World
Bank 2020) (3.9% of Ghana’s GDP), although recent report suggests no impact in
Ghana
• Falling foreign direct investment: FDI flows could fall 30-40% (UNCTAD 2020), which
is evident in recent BOP estimates for 2020 Q1

7. Updated: 1 Dec 2020
Overview (…continued)
• Economic impacts uncertain:
Adjusted GDP growth forecast 1.5% from
6.8% for 2020 (MoF 2020), based on a
rapid assessment and “expert
consensus” on sectoral impacts; less is
known about socioeconomic impacts
• Objective:
In-depth assessment of economywide
effects of lockdown and social distancing
policies; look beyond GDP
• Method:
Social Accounting Matrix (SAM)
multiplier model (next slide); links to
poverty microsimulation module
• Various impact channels
modeled
Impact channels used to replicate lockdowns
1 Direct restrictions on farming
2 Limiting mining operations
3 Closing non-essential manufacturing
operations
4 Disruptions to energy and water supply
5 Limiting construction activities
6 Closing non-essential wholesale/retail trade
7 Transport/travel restrictions
8 Closing hotels, bars and restaurants
9 Closing non-essential business services
10 Government work-from-home orders
11 Closing all schools in the country
12 Disruptions to hospitals and clinics
13 Banning sports & other entertainment
14 Domestic workers & other services
15 Reduced export demand
16 Falling foreign remittances
17 Falling government revenues
18 Falling foreign direct investments

8. Updated: 1 Dec 2020
Measuring Economic Impacts3

9. Updated: 1 Dec 2020
Economywide
Impacts
GDP | jobs
Incomes | poverty
Direct
impacts
Framework for Analyzing COVID-19
GlobalImpact Channels
(Due to partial or full lockdowns in other countries)
Indirect
impacts
DomesticImpact Channels
(Due to partial or full lockdowns in own country)
• Export demand
• Remittances & migration
• Foreign direct investments
• Agriculture
• Mining & crude oil
• Manufacturing
• Utilities (energy, water)
• Construction
• Whole & retail trade services
• Transportation, storage & cargo
• Hotels & food services
• Banking, finance & insurance
• Professional & business services
• Public administration & law enforcement
• Education services
• Health & social services
• Sports & entertainment
• Community & other services

10. Updated: 1 Dec 2020
SAM Multiplier Framework
• Multiplier model estimates
changes in supply (∆𝑍) in
response to changes in
exogenous demand ∆𝐸
∆𝑍 = 𝐼 − 𝑀 −1∆𝐸
• Detailed results on GDP,
employment, income, and
poverty
• Assume demand shock is proxy
for supply and/or demand
shocks
Factor
market
Commodity
market
Producers
Households
Investments
Government
Exports
Imports

11. Updated: 1 Dec 2020
Two Sets of Results
1. Impact during lockdown: Measure impacts of government restrictions & external
shocks during 3-week lockdown period;
Large shocks affecting mostly lockdown zones (32% of GDP) and concentrated over
short-period of time and
2. Annual impacts, different recovery scenarios: Consider faster and slower recovery
scenarios for rest of 2020
Highly stylized, but consistent with sequenced easing of restrictions; Outcome:
shocks spread over longer time period & diminish as economy recovers
September 2020 update: Updated information (e.g., remittances); Q1 shocks to FDI
and exports accounted for; offsetting effects of government mitigation measures
modeled (very preliminary)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Q1 Q2 Q3 Q4
Partial
lockdown
Easing
restrictions rest
of Q2
Further easing
of restrictions in
Q3
Final easing by end
of Q4
(possibly incomplete recovery)
1
2
Initial external
shocks in Q1

12. Updated: 1 Dec 2020
Economic Impacts During the
Lockdown Period4

13. Updated: 1 Dec 2020
GDP Losses During Lockdown
We first consider results without mitigation measures…
National GDP drops 25.4% during the 3-week lockdown
(most economic losses occur in the industry & services sectors)
Source: Ghana SAM Multiplier Results
Change in total GDP during
lockdown period (%)
Change in total GDP by duration of
lockdown (US$ bil.)
-25.4%
-13.1%
-24.0%
-30.8%
Total Agriculture Industry Services
-$1.1 bil.
-$1.4 bil.
-$1.8 bil.
-$2.2 bil.
3 weeks +1 week +2 weeks +3 weeks

14. Updated: 1 Dec 2020
Sources of GDP Losses
Restricting non-essential manufacturing accounts for 23.1% of GDP losses
Contribution of lockdown restrictions & shocks to
loss in total GDP during lockdown (sums to 100%)
(together with restrictions on hospitality sector and transport services losses in these three
sectors account for half of all GDP losses)
Source: Ghana SAM Multiplier Results
23.1%
19.4%
12.4%
10.2%
6.8%
6.5%
6.4%
6.0%
3.9%
3.8%
1.6%
Closing non-essential manufacturing operations
Limiting hotel and restaurant operations
Transport and passenger travel restrictions
Limiting construction activities
Closing all schools in the country
Closing non-essential business services
Closing non-essential wholesale/retail trade
Falling foreign direct investments
Banning sports & other entertainment
Reduced export demand
Domestic & private services

15. Updated: 1 Dec 2020
Impacts on the Agri-Food System
Food supply is exempt from most restrictions, but indirectly
affected by falling consumer incomes & other shocks
Change in agri-food GDP
during lockdown period (%)
Change in agri-food GDP during the
3-week lockdown period (US$ mil.)
(food services accounts for a large share of losses despite being a relatively
small component of the agri-food system; emphasizes significant impact of
reduced patronage of hotels and restaurants)
Source: Ghana SAM Multiplier Results
Share of
total GDP in
2019 (%)
-17.5%
-13.1%
-7.4%
-12.3%
-59.6%
Agri-food system (36.4% of GDP)
Agriculture (19.5%)
Agro-processing (3.5%)
Food trade and transport (9.6%)
Food services (3.8%)
-$251 mil.
-$92 mil.
-$11 mil.
-$51 mil.
-$96 mil.
Agri-food system (36.4% of GDP)
Agriculture (19.5%)
Agro-processing (3.5%)
Food trade and transport (9.6%)
Food services (3.8%)

16. Updated: 1 Dec 2020
Impacts on Household Incomes
Higher-income & urban households experience larger income losses
(lockdowns target cities; nonpoor more likely to work in manufacturing & services)
Source: Ghana SAM Multiplier Results
Change in household incomes during lockdown (%)
-24.4%
-17.6%
-20.2%
-22.0%
-24.4%
-26.3%
-18.3%
-26.1%
All
households Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5 Rural farm
Urban and
non-farm

17. Updated: 1 Dec 2020
Poverty Impacts During the Lockdown
National poverty rate (at official US$1.81-a-day poverty line) increases
10.9 percentage points during lockdown (3.3 mil. more poor Ghanaians)
Increase in the share of the national
population living in poverty (%-points)
Increase in number of poor people in Ghana
during the 3-week lockdown period (mil.)
Source: Ghana SAM Multiplier Results
24.2
39.6
15.4
35.1
50.6
26.3
National Rural farm Urban and non-farm
Initial poverty Poverty during lockdown
3.3
1.2
2.1
National Rural farm Urban and non-farm

18. Updated: 1 Dec 2020
5
Economic Impacts Under Fast & Slow
Easing of Restrictions & Recovery

19. Updated: 1 Dec 2020
Easing of Restrictions & Recovery
Predicting Ghana’s “post-lockdown” period is challenging
Consider two stylized scenarios:
Faster easing: Economy rebounds strongly in Q3 & largely returns to normal by Dec 2020
Slower easing: Modest rebound in Q3 with productivity in Q4 still below pre-lockdown levels
Faster easing Slower easing Global shocks
Q1
Jan
No domestic shocks in pre-COVID-19 period
Foreign direct investments
& export demand declines
from January onwards
Feb
Mar
Full lockdown period starts lasts 3 weeks
Q2
Apr
May Shocks reduced by 30%
(tourism, transport by 10%, arts
remain at lockdown level)
Shocks reduced by 5%
(tourism, transport, arts remain at
lockdown level)Jun
Q3
Jul
Losses reduced by 90%
(tourism, transport, arts by 70%)
Losses reduced by 50%
(tourism, transport, arts by 30%)
Shocks reduced by 50%Aug
Sep
Q4
Oct
Losses reduced by 99%
(tourism, transport, arts by 95%)
Losses reduced by 90%
(tourism, transport, arts by 80%)
Shocks reduced 75%Nov
Dec

20. Updated: 1 Dec 2020
GDP Impacts with Recovery Scenarios
Source: Ghana SAM Multiplier Results
Change in quarterly & annual national GDP with fast or slow easing of restrictions
(changes are relative to a no-COVID growth scenario)
We still consider results without mitigation measures…
National GDP is 7.6-11.5% lower over 2020 as a result of COVID-19
-2.9
-21.7
-4.6
-0.7
-7.6
-2.9
-24.9
-14.3
-3.8
-11.5
-30
-25
-20
-15
-10
-5
0
Q1 Q2 Q3 Q4 2020
Quarterly averages Annual
Change(%)
Faster lifting of restrictions Slower lifting of restrictions

21. Updated: 1 Dec 2020
Cumulative Quarterly GDP Losses
Government’s COVID-19 adjusted growth target down from 6.8%
to 1.5%; but even this seems optimistic
0.0
1.1
2.1
3.2
4.2
0.0
-1.3
-0.5
0.9
0.0
-2.0
-1.7
-0.8
0.0
0.6
-2.5
-3.8
-3.4
End 2019 Q1 Q2 Q3 Q4
CumulativegaininGDP(US$bil.)in2020
Projected 2020 real GDP
growth 6.8%
Revised COVID-19 2020 real
GDP growth 1.5%
COVID-19 fast recovery
scenario -1.3% growth
COVID-19 slow recovery
scenario -5.5% growth

22. Updated: 1 Dec 2020
Poverty Impacts with Recovery Scenarios
Source: Ghana SAM Multiplier Results
Change in national poverty rate with fast or slow easing of restrictions
(changes are relative to a no-COVID growth scenario)
Poverty stabilizes by end of 2020 as people return to work,
incomes recover & consumer demand resumes
(but this hides a sharp spike in mid-year poverty, e.g., 3.3 million more poor people
during lockdown)
0.8
9.0
1.6
0.3
0.8
10.6
5.7
1.2
0
2
4
6
8
10
12
Q1 Q2 Q3 Q4
Quarterly averages
Change(%-point)
Faster lifting of restrictions Slower lifting of restrictions

23. Updated: 1 Dec 2020
6
Mitigating effect of government
support measures

24. Updated: 1 Dec 2020
Recent Simulation Updates
• Changes introduced since June 2020 results (see
reference further below)
• Recent evidence now shows:
• No impact on foreign remittances (+)
• Government capital expenditure remains on target
(+)
• Impacts on foreign direct investment and exports felt
in Q1 already (−)
Initial results
(June 2020)
Remittances,
capex
Q1 FDI &
exports
GDP lockdown -27.9 -25.4 -25.4
Fast
GDP Q1 -0.7 -0.6 -2.9
GDP Q2 -24.2 -21.7 -21.7
GDP Q3 -6.5 -4.6 -4.6
GDP Q4 -2.2 -0.7 -0.7
GDP annual -8.5 -7.0 -7.6
Slow
GDP Q1 -0.7 -0.6 -2.9
GDP Q2 -27.4 -24.9 -24.9
GDP Q3 -15.9 -14.3 -14.3
GDP Q4 -4.9 -3.8 -3.8
GDP annual -12.3 -11.0 -11.5
• Additionally, numerous mitigation
measures introduced during 2020
• Food aid: grain procurement and
food parcels → GHC 84 mil.
• Utility subsidies: residential water
& electricity → GHC 1.7 bil.
• Income support for healthcare
workers → GHC 80 mil.
• Exam fees waived → GHC 75 mil.
• Various loan programs: CAP 1 bil.;
Guarantee Scheme GHC 2 bil.;
commercial banks GHC 3 bil.
• We simulate above as implicit
transfers to households

25. Updated: 1 Dec 2020
Impact of mitigation measures
0.8
7.3
0.7
0.3
0.8
9.0
1.6
0.3
0
1
2
3
4
5
6
7
8
9
10
Q1 Q2 Q3 Q4
Quarterly averages
Changeinpoverty
(%-point)
Fast (mitigation) Fast (no mitigation)
-2.8
-18.8
-2.7
-0.7
-6.3
-2.9
-21.7
-4.6
-0.7
-7.6
-25
-20
-15
-10
-5
0
Q1 Q2 Q3 Q4 2020
Quarterly averages Annual
ChangeinGDP(%)
(mitigation prevents 600,000 people from falling
into poverty during lockdown)
(mitigation prevents negative growth in 2020
under fast recovery scenario)

26. Updated: 1 Dec 2020
7
Conclusions

27. Updated: 1 Dec 2020
Conclusions
• Impacts are larger than initially anticipated
• GDP: Estimated -25.4% loss during 3-week lockdown, and a range of -7.6% to
-11.5% for the year; equivalent to GDP contraction of -1.3% to -5.5% for 2020
compared to 1.5% revised growth projection
• Poverty: likely to recover to pre-crisis levels by year-end, but up to 3.3
million people may be poor in Q2
• Policy response:
• Avoid urban bias in household support measures; and
• Mitigation measure budgets are small (e.g., CAP USD 200 mil.) in comparison
to the anticipated GDP gap (e.g., USD 1.7 bil. between “revised” and “fast”
recovery scenarios during the 2020 calendar year)

28. Updated: 1 Dec 2020
Next steps
• Improve modeling of mitigation scenarios
• CGE model with endogenous prices more suited to modeling price subsidies
or tax relief measures
• More detailed information on budgets and targeting will improve simulations
• Move towards analysis of investments in post-COVID recovery

29. Updated: 1 Dec 2020
References
Blog Post: “Effects of COVID-19 on Ghana’s economy may be
worse than feared”. June 23, 2020 (link)
Working Paper: Amewu, S., Asante, S., Pauw, K. and Thurlow,
J. 2020. The economic costs of COVID-19 in Ghana. IFPRI/GSSP
Working Paper No. 52 (pdf)
https://www.ifpri.org/covid-19

30. Updated: 1 Dec 2020
A
Detailed Assumptions About
Production & Demand Shocks

31. Updated: 1 Dec 2020
Sectors Affected by Lockdown Policies (1)
Sector Lockdown restrictions or exemptions in targeted regions Severity
Agriculture (incl.
fisheries)
• Complete exemption; explicit government support for farming
activities, input/output market functioning, and agricultural policies
• Anecdotal evidence of food scarcity and price spikes in some
markets, and harassment of traders or input dealers
Exempt (0%)
Mining & crude oil
• Deemed essential sector; operations and support functions continue
• Lower oil prices & export demand (small supply effects anticipated)
Exempt (0%)
Manufacturing
• Essential goods exempt: food, beverages, pharmaceuticals, medicine,
paper and plastic packages, some metals, protective clothing, etc.
Extreme (-84%)
Utilities • Electricity & water distribution exempted (essential sector) Exempt (0%)
Construction
• Partial exemption (e.g., resident building continues)
• Public infrastructure exempted
High (-37%)
Wholesale & retail
trade services
• Trade of essential goods exempted
• Some disruptions in markets, e.g., temporary closures
High (-39%)
Transportation,
storage & cargo
Nationwide
• Domestic air travel closed; freight transport partly restricted
• Reduced passenger capacity nationwide due to social distancing
High (-34%)
Hotels & food
services
Nationwide
• Severe restrictions on bars and clubs; social distancing in restaurants
• Significantly reduced hotel patronage
Extreme (-50%)

32. Updated: 1 Dec 2020
Sectors Affected by Lockdown Policies (2)
Sector Lockdown restrictions or exemptions in targeted regions Directly Affected?
Commerce,
banking, finance &
business services
• Essential services mostly exempt, but reduced operations and work-
from-home measure implemented
Some (-15%)
Public admin &
law enforcement
• Public services & agencies remain open, but non-essential staff
teleworking
• Public & private security services exempted (essential)
Some (-20%)
Education services
• Nationwide
• All public schools closed; limited scope for online delivery
• Private schools closed with some online materials
High (-30%)
Health services • Health services exempted (essential) Minimal (0%)
Sports &
entertainment
Nationwide
• Most sports & outdoor entertainment banned
• Some activities operating (e.g., newspapers, radio & TV)
• Religious gatherings suspended; small funerals permitted
High (-39%)
Other services
• Most personal services (e.g., hairdressing or domestic work)
suspended or affected
High (-38%)

33. Updated: 1 Dec 2020
Global & Other Nationwide Shocks
Sector Lockdown restrictions or exemptions in targeted regions Directly Affected?
Export demand
Nationwide
• Global oil demand declines, but production continues
• Cocoa sector anticipates large losses related to global market turmoil
and reduced access to credit
• Reduced international tourism & business travel to Ghana (captured
in domestic impact channel)
Some (-10%)
Remittances
Nationwide
• Declines in the value of remittances sent by national working abroad
None (0%)
Government
revenues
Nationwide
• Fall in tax revenues due to decline in economic activity and trade; oil
revenue significantly impacted due to price shock
• Additional, unbudgeted costs (NPRP, CAP) – GHC 11.4 bil. revenue
loss and costs
• Initially assumed to result in reduced infrastructure spending, but
evidence now shows spending track
None (0%)
Foreign direct
investments
Nationwide
• Anticipated reduction in FDI translates in reduced capital stock
formation, affecting especially construction services
High (-25%)

34. Updated: 1 Dec 2020
Comparative estimates
Lockdown scenario Annual GDP effects in 2020
Details
GDP loss
during
lockdown Slow easing
Faster
easing
Malawi 2-month social distancing -11.6% -4.0% -5.2%
Rwanda 6-week national
lockdown
-39.3% -11.5% -16.2%
Ethiopia 7-week restriction period -14.3% -4.8% -6.2%
Nigeria 5 to 8-week lockdown
staggered across states
-37.6% -8.9% -17.1%
Ghana 3-week lockdown in
major urban centers
-25.4% -7.6% -11.5%
Indonesia 2-week strict lockdown
(but 4 weeks modeled)
-24.3% -5.3% -7.3%
Myanmar 2-week lockdown -41.0% -2.2% 0.5%
Source: IFPRI SAM Multiplier Results