Impact of COVID-19 on poverty and living standards in Ghana: A micro perspective

Abstract

The novel Coronavirus disease 2019 (COVID-19), which has become a global epidemic, hit Ghana on 12th March 2020 and, in less than a week, increased by over 300 percent with two deaths. As of 11th June 2020, Ghana had recorded over 11,000 cases with 48 deaths. This study seeks to provide a micro-level evidence on how COVID-19 is posing a threat to some of the Sustainable Development Goals, particularly poverty and hunger in Ghana. Specifically, the study examined the effect of COVID-19 on poverty and living standards of Ghanaian households. It also analyzed which class of persons within the income distributions is mostly hit by the pandemic. Data on 3,905 households were obtained via concurrent online survey and telephone interviews. Multiple analytical approaches were employed: Ordinary least squares, probit model and simultaneous quantile regressions. The results showed that COVID-19 had significantly increased the poverty levels of households, while deteriorating living standards. The study also showed that gender and locational heterogeneities exist regarding the impact of COVID-19 with females and rural dwellers mostly disadvantaged. However, the simultaneous quantile regression showed that in terms of overall household consumption, those in the middle and upper classes were heavily affected compared to those in the lowest class. A key policy implication from this study is that Ghana needs to broaden its social protection programmes to assist both the new poor and existing poor.