Graphic Business News

Govt’s GH¢600m stimulus package woefully inadequate -- Business leaders

By: Maclean Kwofi
Category:
Dr Joseph Obeng
Dr Joseph Obeng

Business leaders have described as inadequate, the government’s GH¢600 million stimulus package meant to support businesses from the negative economic impact of the coronavirus disease (COVID-19).

An equitable share of the GH¢600 million against 200,000 targeted beneficiaries, implied that each beneficiary was entitled to GH¢3,000.

That, they said, was insufficient to make any impact given the huge number of micro, small and medium enterprises (MSMEs) operating in the country.

Lauding the initiative, the business leaders at a meeting organised by the National Board Small Scale Industries (NBSSI) on May 14 in Accra, suggested that the government should consider making the GH¢600 million, the first tranche of the fund.

The CAP
The government in March announced a GH¢1.2 billion Coronavirus Alleviation Programme (CAP) as part of enhanced measures to mitigate the impact of COVID-19 on households, contain disruption to economic activities and to rescue and revitalise industries.

The CAP, which was subsequently approved by Parliament on April 9, dedicated GH¢600 million as soft loans for businesses, especially those in the MSMEs sector.

 

Mrs Kosi Yankey Ayeh

 

FAGE’s position
For her part, a representative from the Federation of Associations of Ghanaian Exporters (FAGE), Ms Marjovie Quist Abolin, said the introduction of the stimulus package was a solid initiative yet the impact might be negligible if measures were not taken to scale it up.

Instead, she suggested that the government should consider making the GH¢600 million, the first tranche of the fund.

“For us, this stimulus package is a brilliant initiative but we need to scale-up the funds in order to achieve its target,” she said.

Asked which amount was appropriate, she said with the huge number of MSMEs in operations in the country, it meant that the GH¢600 million was inadequate.

She, therefore, noted that FAGE was currently undertaking its own assessment to quantify the impact of the virus on its members.

“And so when we are done with our assessment, we will share the findings and propose the needed solutions,” she added.

Corroborated views
For his part, the President of Ghana Union of Trader Association (GUTA), Dr Joseph Obeng, corroborated the position of FAGE and added that the number of applicants that would queue for the current GH¢600 million would call for a second tranche.

Initially, he said GUTA wanted to know the modalities for the disbursement of the fund but it was now satisfied with NBSSI’s explanation at the meeting.

“We are very grateful that the President has made available this fund to support businesses during this period,” he said.

Chamber study
The President of the Ghana National Chamber of Commerce and Industry, Nana Appiagyei Dankawoso I, at another meeting on March 13, also described as woefully inadequate, the GH¢600 million stimulus package.

As the representative of the business community, he said the chamber undertook a business survey to elicit the concerns and expectations of the business community on the pandemic towards ensuring an effective engagement with the government and other stakeholders.

The findings, he said, showed that about 108 businesses had lost a minimum of GH¢39.8 million to COVID-19 which broke out in the country in March 12.
   
Response   
The Executive Director of the NBSSI, Mrs Kosi Yankey Ayeh, expressed the hope that the government would scale-up the fund to capture more beneficiaries.

"You mentioned that the GH¢600 million should be the first tranche of the stimulus package and we are also hoping that there will be more to expand the scope.

"I am aware that the government is working hard to grow the MSMEs sector. As we all know, a strong MSMEs sector is important for the growth of every economy, advanced or developing," she added.

Beyond CAP, Mrs Ayeh said the NBSSI had secured additional support from external sources to scale-up the fund at an appropriate period.

"And so little by little, we hope to grow the fund in order for it to serve as the backbone for the MSMEs sector in Ghana," she added.