By George Ephraim Afotey Anang, FMVA
Life always gives us the opportunity to learn, both in the good times and seemingly not-so-good times. Amazingly, the lesson is better understood when a person’s life and that of close associates are the reference for the lesson being taught.
The recent developments with the consistent spread of the pandemic popularly known as the Novel Corona Virus or COVID-19 has been met with insights by varied professionals, mainly health professionals. Popular amongst the trending discussions are the causes, symptoms and preventive measures against the coronavirus. Comparatively, little has been shared in assessing the actual and potential economic impact of coronavirus. It is at this point that Economics brings additional insight in managing the current pandemic and prescribing ways in dealing with the situation, going forward.
Shortage of goods
Following the pandemic outbreak, a key economic trend observed in countries with recorded cases includes the shortage of certain commonplace goods. Common amongst these goods are sanitizers, toilet paper, maple syrup and cleaning supplies.
This article is not intended to give the array of goods to consider hoarding in these times or anticipate the next likely commodity to run into short supply. On the contrary, this article is meant to suggest approaches to curb a markets default tendency to buy based on fear, both from the individual as well as government’s perspective.
Panic buying is a type of behaviour marked by rapid increases in purchase volume, typically leading to scarcity of the good and causing the price to increase. Explained in a simpler way, panic simply connotes sudden and uncontrollable fear. Panic buying therefore implies buying that is fuelled by intense fear.
About Coronavirus
The coronavirus was first discovered in December 2019 in Wuhan, a port city in the central Hubei province of China.
On the face value, the statistics may not appear as dire. However, coupled with the ease with which the virus spreads, the situation becomes one of much concern. According to the Centre for Disease Control and Prevention (CDC), the coronavirus mainly spreads through exposure to respiratory droplets produced when an infected person coughs or sneezes. Additionally, it is possible to be infected by touching a surface or object that has the virus on it and then touching one’s mouth, nose or, possibly, eyes.
Given these circumstances, there have been global reported incidents of panic buying in an attempt to ensure sanitation measures to prevent contacting the virus. The trend of reported incidents suggests that countries with high number of coronavirus cases most likely have incidents of panic buying. These include China, Italy, United States, United Kingdom and Canada.
Ghana’s case
Ghana, as at March 19, 2020, had reported nine cases of the coronavirus infection, with no deaths recorded. As comparatively marginal this number may be, the Government of Ghana has been proactive in banning public gatherings, including conferences, workshops, funerals, festivals, political rallies and religious activities. However positive these proactive measures may be, they have also sent tense signals across the country, adding to agitations and fears of the looming pandemic danger.
These reported cases, coupled with government’s interventions, have sparked an artificial demand for sanitizers, leading to a nationwide shortage in the past week. In extreme cases, the prices of hand sanitizers, which previously sold for as low as GH₵10.00 (USD 0.89), are now selling for as high as GH₵80.00 (USD 14.20). This represents a whopping 800 per cent increase in price over a matter of days.
Anti-panic agenda
In further pushing the proactive agenda, individuals, corporations and Governments need to put key measures in place that allay fears, prevent shortages of goods in addition to containing the spread of the virus.
In his March 11 2020 address to the nation on the coronavirus outbreak, President Nana Akufo-Addo stated: “We must take advantage of this crises to strengthen our domestic productive capacity and advance our self-reliance and reduce our dependence on foreign imports. Necessity, they say, is the mother of invention.” In the event of sanitizer shortages, such as that being experienced in Ghana, government can take key steps to salvage the situation. These desperate times certainly call for desperate measures.
One of such steps is directing the production of local hand sanitizers and liquid soaps by government vocational training institutions scattered across the nation, which include the National Vocational Training Institute (NVTI), Social Welfare Vocational Training Centre and Opportunities Industrialization Centre, Ghana (OIC Ghana). This directive should be in coordination with the Food and Drugs Authority (FDA) for the quick and legal provision of product licences, after necessary tests are conducted on these locally produced hand sanitisers.
This will not only help solving the current shortage but will also give consumers the assurance that this is a safe product for use as it would have been tested and approved by the FDA.
A recent case in point was in India, where the Gujarat Food and Drug Control Administration has approved 100 product licences for hand sanitisers on a fast-track basis to ensure that there was no shortage of these items in their market. According to the Commissioner of the Authority, 100 licences have been given to around 40 manufacturers to make hand sanitisers in the last one week alone.
Secondly, there should be consistent public awareness campaign by government institutions, such as the National Commission for Civic Education (NCCE), to tell consumers not to buy in panic. The campaign should further stress cheaper precautionary measures like building one’s immune system by eating fruits and hand washing with soap as against total dependence on an alcohol-based sanitiser as the ultimate source to prevention.
Lastly, the FDA or Pharmaceutical Society of Ghana (PSGH) should collaborate with the police to raid pharmacies and shops that are hoarding sanitizers as well as selling at outrageous prices, all in a bid to make abnormal profits at the expense of valuable lives.
Major corporations
A number of companies have undertaken to ration the commodities sold per person in order to clamp down on panic buying and hoarding. For instance, Boots Limited, a health and beauty retailer and pharmacy chain in the United Kingdom, has enforced a limit of two units per customer on various sterilising products, in response to the high volume of customers.
Additionally, Aldi supermarket has become the first supermarket to introduce across-the-board rationing, which means customers can buy no more than four of any single grocery lines when they visit a store. These are measures that can be adopted by renowned chemists and pharmacies in Ghana mandated to look out for the interest and health of their customers.
Individuals
Beyond governments and institutions, individuals will always be the last resort to ensuring the right thing is done. When an individual hoards cleaning and sterilizing products, such as sanitizers, to the detriment of others, the said individual rather faces greater risk of being infected in the long run. All things being equal, the stock of sanitizers will certainly be depleted at a point and one will eventually be exposed to infected individuals.
It may seem like early days with just nine reported cases of the coronavirus infection in Ghana. It is, however, never too early or too late to allay the fears that come with times like these and better equip individuals to fight this virus. Fear which fuels panic buying just make things worse in the long-run. In the words of writer William Shakespeare, “Cowards die many times before their deaths; the valiant never taste of death but once.”
