The Coronavirus Alleviation Programme (CAP) was proposed by the government to proficiently take care of social and financial restoration in Ghana as a consequence of the ongoing Covid-19 pandemic, or so we imagined.
A very clear CAP implementation approach has not been communicated until day.
It is widespread understanding that bulk of small organizations have been adversely impacted by the lockdown.
And when the Finance Minister during his CAP presentation to Parliament on April 8th wherever he highlighted the program’s strategic goals, talked about help to be given in the kind of tender loans to micro, tiny, and medium-dimension companies (and the self-employed), Ghanaians felt some semblance of reassurance.
Still, 3 (3) weeks right after passing the bill with the knowledge that an implementation program was imminent, we continue to do not have the precise aspects of CAP’s roll-out program.
The CAP system wants to be transparent and answer the next concerns:
- the quantum of financial loans/resources that would be built available
- When will these loans be disbursed?
- What is the qualification requirements?
- Which financial establishments will be disbursing these loans?
- What is the threat-sharing arrangement concerning these establishments and GOG?
- How prolonged will interest be forgiven?
- What is the maturity of these loans?
As other nations extend their lockdown period to secure human lives and numbers of individuals infected by the Covid-19 virus and Ghana’s circumstances carry on to increase, we require to be sensible and get ready economically for an extension of this lockdown time period to the mid May possibly (and possibly, even to end of May possibly).
Already, most small corporations are having difficulties to meet even 25% of their month to month profits targets, and it is projected that a lot of could not hit the 50% mark of their 2019 revenue amount write-up- lockdown. This is since desire will decide up incredibly slowly and gradually, and this trend will go on before demand in the industry thoroughly bounces back — best scenario circumstance is September 2020.
Due to the fact it is believed that projected 2020 profits might access only about 50% of their benefit for most SMEs and traders in Ghana as a result of Covid 19, government needs to motivate expending. It need to guide by instance, by injecting resources into businesses that produce essentials, specially in this lockdown i.e. food stuff, agriculture and pharmaceuticals.
The expectation is that discretionary paying will drastically reduce as employees drop their earnings — spending entire wages is heading to carry on to be a lot more tough for enterprises as the lockdown continues. Several will depend on their price savings (the place out there), and banking companies will have to reschedule loan repayments for smaller firms i.e. present grace period of paying out desire and principal.
Economists are predicting a decline in financial action and decreased expending and this contraction could set Ghana, possibly, in a economic downturn by stop the 12 months.
As these kinds of, Ghanaians must be advised of a seem economic path laid out by the governing administration to transfer us ahead.
For instance, we ought to have begun to see estimations on the monetary impact of this pandemic by healthful sampling of businesses in our current market.
This kind of surveys will amongst other issues, shed some mild on understanding the outcomes this pandemic is obtaining on our businesses and job minimized requires given that most organizations are quite likely to downsize if this predicament persists.
One more point that Ghanaians have to have to see right away are the price tag-preserving steps in government spending and the elimination of non-essential grandiose applications — I just ponder if government is going to acquire any decisive actions to decrease the around bloated workforce in some non-doing parastatals and companies, and other “special” federal government initiatives?
If these crucial price-reducing steps are not executed, our economic standing will stop in a catastrophe this 12 months. My analysis reveal that there will be a funding hole of governing administration shell out of about GHS25bn (most effective-scenario circumstance – if measures are taken). Here’s why Our 2020 believed profits is GHS 67bn.
I envisage a downward evaluation in a handful of months, to about GHS 50bn (10% beneath 2019) due to reduce profits from oil receipts and taxes as a consequence of the general slowdown of the financial state.
Even with a nutritious critique of cost cutting measures in government invest, how will this cater for our existing projected 2020 devote of in between GHS 86bn (spending plan) to GHs93bn (from the Appropriations invoice)? My forecast- a overview of this expenditure selection to a a lot more prudent amount of somewhere around GHS75bn when some of the not-so-nicely thought by programmes and projects are axed.
Our expectation of govt is to demosntrate that they are mitigating the social and economic troughs of COVID-19 in Ghana. Critical matters this sort of as this projected GHS 25bn fiscal hole, coupled with holding depreciation of the Cedi down below 10% and holding GDP advancement earlier mentioned 2% should to be dealt with. With crystal clear, thorough and concise economical roadmaps be shared with both Ghanaians and investors.
Foods for believed! I hope we get some responses immediately .