The number of jobs in the country has declined due to the ravaging effects of the Covid-19 pandemic on businesses, the Monetary Policy Report (MPC) on real sector developments of the economy has revealed.
The July 2021 MPC report has shown that the number of advertised jobs in selected print and online media, which partially gauges labour demand in the economy, decreased in June 2021 relative to the corresponding period a year ago.
In total, 2,730 job adverts were recorded as compared with 3,079 for the same period in 2020, indicating a decline of 11.3% on a year-on-year (y-o-y) basis.
Nonetheless, on a month-on-month (m-o-m) basis, the number of job vacancies in June 2021 saw a marginal increase of 0.6%.
Cumulatively, 17,091 advertised jobs were recorded for the first two quarters of 2021, compared with 19,119 jobs advertised during the same period in 2020.
“The decline in the number of jobs advertised reflected the difficulties faced by businesses as a result of the Covid-19 pandemic,” the report stated.
Composite Index of Economic Activity
The Bank’s updated Composite Index of Economic Activity (CIEA), which tracks short-term economic activity dynamics, registered a strong annual growth of 33.1% in May 2021, compared to a contraction of 10.2% recorded in the corresponding period of 2020.
According to the Monetary Policy Analysis Division of the BoG, the CIEA tracks the Gross Domestic Product (GDP) very closely and is taken by the BoG as an excellent business confidence indicator.
It contains several indicators assigned with figures, and the weighted average is computed. So, when the CIEA index increases, it means the economy is expanding and vice-versa.
Besides the GDP, which is released periodically by the Ghana Statistical Service (GSS), the Bank of Ghana (BoG) also uses the (CIEA) to guide the Bank’s Monetary Policy Committee.
The index includes cement sales, Social Security and National Insurance Trust (SNNIT) contribution by the private sector, industrial consumption of electricity, domestic tax, imports, exports, port activity and tourist arrivals.
CIEA Break down
- Private Sector Pension Contributors
Meanwhile, the total number of private sector Social Security and National Insurance Trust (SSNIT) contributors, which partially gauges employment conditions, improved to 804,849 (up by 15.4% year-on-year) in May 2021 compared with 697,690 for the same period in 2020.
Cumulatively, for the first five months of 2021, the total number of private-sector contributors increased by 3.8 per cent to 4,087,134 from the 3,937,022 recorded over the corresponding period in 2020.
- Consumer Spending
Meanwhile, the report found that increased household consumption within the review period increased, leading to retail sales growth of 39% to GH¢560.64 million.
Domestic value-added tax (VAT) collections and retail sales posted a positive performance in May 2021, compared with the same period in 2020, with an increase of 35.3% on a y-o-y basis to GH¢536.10 million.
On a m-o-m basis, domestic VAT collections declined by 13%.
Cumulatively, total domestic VAT for the first five months of 2021 went up by 31.7% to GH¢2,728.77 million, compared with GH¢2,072.12 million for the same period of last year.
Retail sales increased by 30.4% y-o-y to GH¢114.78 million in May 2021, up from the GH¢88.00 million recorded in the same period in 2020.
Consumer and Business Surveys
The Bank of Ghana (BoG) MPC report on consumer and business confidence in June 2021 reflected mixed sentiments. Consumer confidence softened, while business confidence remained somewhat unchanged from the previous survey period.
The consumer confidence index eased from 93.2 in April to 88.8 in June 2021 due to a variety of factors, including the implementation of the recently announced revenue measures in the 2021 budget.
However, the business confidence index only dipped marginally from 96.9 in April to 96.3 in June 2021. Business sentiments remained broadly unchanged due to expectations of improvement in company growth prospects.
Covid-19 hits businesses and employment opportunities
Results from the 2020 Business Tracker Survey of the Ghana Statistical Service (GSS) disclosed that the shock caused by the COVID-19 pandemic had a considerable impact on Ghanaian firms.
Apart from 35.7% of business establishments closing during the partial lockdown, 46.1% of business establishments reported that they reduced wages for 25.7% of the workforce (an estimated 770,124 workers).
It was also observed that 4% of firms indicated that they have laid-off workers, corresponding to 1.4% of the workforce (an estimated 41,952 workers).
However, the total unemployment rate in the country was reduced by some 3.5 percentage points, following a recovery mechanism to contain the impact of the pandemic.
The Minister of Employment and Labour Relations, Ignatius Baffour-Awuah, said this in September last year, noting that during the early stages of the pandemic, his outfit observed that low wage and unskilled workers were the most vulnerable.
He, however, indicated that since January 2017, the ministry continued in line with its mandate to improve the capacities at the National and Sub-national levels for the promotion of decent job opportunities.
