Economy will crumble from another lockdown - Domfe

An economist with the University of Ghana, Dr. George Domfe, has stated that Ghana cannot afford another lockdown because it will completely crumble the economy.

He said that riding on the back of the adverse effects that last year’s lockdown and the closure of schools especially had on the economy of the country, the thought of another lockdown in

Read full articlethe country today is one that should not even be considered.

Ghana’s school children returned to school in January 2021 after staying home from March 2020, due to the outbreak of the coronavirus.

Following this, cases in the country started seeing a gradual sharp rise in numbers with some recorded cases in some schools in the country prompting calls by some organizations and sections of the public for the re-closure of schools, even if it for only classes below the lower primary level.

But Dr. Domfe maintains that the situation doesn’t look good for the country to consider any such move, as it will adversely affect the economy and bring it to its knees.

“If we look at teachers with the private schools, the numbers are very high and many people make their living by teaching in private schools.

“So, when you look at those days when schools were closed, it really affected them. Some of them were receiving half salaries, some were not receiving anything because these are private schools and they needed to collect school fees to be able to pay their workers. And so, with the closure of schools, it didn’t make any sense for the owners to pay their workers and it was a big problem. Private schools especially will be affected greatly again.

“What is more, when schools reopen, market activities increase and every economy does well when money changes hands frequently. The closure will affect even those selling materials for schools,” he said.

He therefore believes that a closure of primary schools will not be the smartest decision since it will have rippling effects on different aspects of the economy.

“If primary schools are closed, the education sub-sector is going to suffer again. We have heard the complains from the owners of private schools and especially for the big cities, middle-income and upper-income earners always want their children to go to private schools and so there are quite a number of private schools and they employ so many people,” he explained.

He then provided even more reasons on why a lockdown will be a bad idea for the economy.

“We are not ready because it is going to be a big problem. Last year, before the year begun, government had decided to spend 85 million and the projected revenue was at 66 billion. Because of the COVID, government spent almost 100 billion last year. Finance Minister is yet to tell us what happened.

"Apart from the fact that government expenditure ballooned, the projected revenue of 66 billion, the Ghana Revenue Authority just told us that Ghana could only get 45 billion so there was a revenue shortfall of 21 billion. In spite of that, government continued to pay workers for doing virtually nothing and at the end of the day, the central government spent about 21 billion, paying workers. And so that caused a lot of problems and Ghana had to borrow so much, so much that as we speak, debt to GDP ratio is 74. This is the worst in about 60 years.

“In an event that we experience another lockdown due to what COVID-19 did to this economy last year, by the end of the year, the economy will crumble totally because now, we are in a very serious, difficult moment as a country. And so a lockdown is not anything that we want to hear."