Head of the Economics Department at the University of Ghana, Prof. William Baah-Boateng wants the government to be measured in its attempt to financially support Small and Medium-sized Enterprises (SMEs) amidst the Coronavirus pandemic.
To him, the global impact of the pandemic requires governments and businesses to be more innovative in their operations in order to gain greater outcomes during and after the pandemic.
While raising concerns about possible profligate spending in the name of supporting businesses, Prof. Baah-Boateng who was not completely enthused about the government’s stimulus package for businesses advocated for a more strategic approach that will instead revamp economic activities.
“…It will not be best to use the stimulus package to buy goods and services for people to consume. That will not be the best. I am expecting the stimulus package to help businesses to start something to [solve] those challenges that they are having. I have a bit of a challenge if we fold our arms and expect that the government will have to come in to pay part of salaries. So if we don’t take care and give that kind of stimulus package to the medium enterprises they may use it for other things. So we have to look at the timing as well and ensure that if there is going to be a stimulus package, it is going to be used to ignite the engine of economic activity and get our firms running,” he remarked on the Point of View on Citi TV.
In the wake of the novel coronavirus pandemic, the economist further advised the government to be tactical in its support to businesses.
He is worried over the disbursement of stimulus packages at this time suggesting that the government should try to be diligent in its support to businesses.
Money for COVID-19
President Akufo-Addo had earlier announced that a GH¢600 million soft loan scheme with a two-year repayment plan had been put in place by the government to support micro, small and medium scale businesses in these difficult times.
Following the outbreak of COVID-19 in Ghana and a partial lockdown on Accra and Kumasi as a result of the disease, most businesses in major economic hubs became inactive, thereby limiting the income of most citizens.
It is for this reason that the government decided to among other things, support SMEs by giving this money to them.
The International Monetary Fund (IMF) approved the disbursement of US$1 billion interest-free loan to Ghana to be drawn under the Rapid Credit Facility (RCF).
The money is to help Ghana address the “fiscal and balance of payments needs” and also help the country to improve confidence in its economy especially in the wake of the COVID-19 pandemic.
Some other decisions include the announcement of a GH¢1 billion Coronavirus Alleviation Programme that will be funded from the Ghana Stabilisation Fund.