This is not time to make supernormal profits: Economist cautions in the wake of COVID-19 outbreak in Ghana
An Associate Professor of the Institute of Social, Statistics and Economic Research (ISSER), Professor Robert Darko-Osei, has called on those selling protective products against the coronavirus (COVID-19) to desist from over-pricing them beyond the reach of the ordinary person.
According to him, much as the high demand is most definitely going to impact the prices because of supply shortages, people need to be cautious to focus on how to prevent contracting the disease and not necessarily to make supernormal profits.
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Prof. Darko-Osei, who is also the Vice Dean of the School of Graduate Studies at the University of Ghana, Legon, gave the advice in an interview with the Graphic Business in Accra on Sunday.
Market developments
With the intense education about how people can prevent catching the virus using hand sanitisers, alcohol-based wipes and rubbing alcohol, the demand for those products has suddenly soared to the roof tops as a result of high demand over supply.
A random check from the various pharmacies, chemist shops and the open markets have revealed that the price for some of the alcohol-based hand sanitisers and wipes have been increased by more than 120 per cent on the average.
Deva hand-sanitisers (500ml), which used to be Gh¢13 was being sold for Gh¢25 as of Friday. By Saturday, that same brand was now selling for between Gh¢70 and Gh¢90 at Okaishie and other areas, for instance.
Carex, one of the best known international brands, which used to be sold for Gh¢5, per the mini bottle, is now averaging Gh¢20 for the same size of bottle, depending on where it is sold.
Suddenly, many different brands, which authenticity cannot be verified, have also found themselves on the markets as cheaper options.
Let's be cautious
Prof Darko-Osei described the development, in terms of the sudden price hikes, as normal but not the best considering the nature of the spread of the disease at hand.
“We know that when such developments happen, the power of the forces of demand and supply comes into play very forcefully and that is what we are experiencing,” he said.
He said traders and suppliers, in these times would want to consider making supernormal profits as they cash-in on the situation to make extra money.
Prof Darko-Osei warned that considering the nature of the virus, should the products to prevent it remain beyond the reach of the ordinary people, many would not be able to afford to save them from the fast spreading disease.
“What we should bear in mind is that when people are unable to buy, they may be infected and ignorantly pass it on to us without knowing.”
“Let us be moderate to ensure that the majority of the people are able to buy so that we can all be saved from this viral outbreak”, he said.
Hit on general economy
From an economic perspective, the key issue is not just the number of cases of COVID-19, but the level of disruption to economies from containment measures,” Analysts are saying that the widespread lockdowns such as those imposed by China have been enacted in some virus hotspots. But there are fears that such measures — if taken disproportionately — could induce panic and weaken the global economy even more.
Fears of the coronavirus impact on the global economy have rocked markets worldwide, plunging stock prices and bond yields.
Downgrades in economic forecasts
The outbreak has led major institutions and banks to cut their forecasts for the global economy. One of the latest to do so is the Organisation for Economic Co-operation and Development.
In a March report, the OECD said it downgraded its 2020 growth forecasts for almost all economies.
The trigger
It began like one of those ordinary disease outbreaks in China but after a few months, COVID-19 has arrived on the shores of the country with six confirmed cases as of Sunday.
The phenomenon has suddenly triggered the behaviour of the forces of demand and supply with the market reacting sharply to the development.