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Opinions of Sunday, 29 March 2020

Columnist: Walter Kwami, Contributor

Here’s how Ghana should approach coronavirus pandemic economic relief

On Friday evening, 27th March 2020, the President of Ghana announced a
stimulus package to address the COVID-19 pandemic. According to the president, the minister of finance is to “…immediately make available a minimum of one billion Ghana Cedis (GH¢1 billion) to households and businesses, particularly small and medium scale enterprises”, he said.

While the President’s announcement is a step in the right direction, I would recommend more should be done. Let me get straight to the point; the COVID-19 pandemic, as terrible as it is, also presents a great opportunity to hit reset on many big issues, some of which are, taxation and compliance, debt relief,
housing, and hygiene, reducing corruption, and technology adoption.

Below are my recommendations which are tailored more to Ghana’s unique needs:

1. The Ghana government should transfer money directly to those who are current with their tax obligations. This will convey to Ghanaians the benefits of paying taxes. The future implications for tax compliance should be obvious.

2. VAT is one of the main sources of taxation - reduce or eliminate VAT on many goods and services. This has the effect of putting money directly into the pockets of every Ghanaian.

3. Utilities and other companies (i.e. telecoms, electricity, energy, water, banking, transportation, etc.), should be made to reduce or cancel fees and bills for Ghanaians up to a certain amount. This will again provide direct relief to all Ghanaians, especially those who have legitimate accounts with
these companies. It also ensures those who have illegally tapped into water or electricity, etc., get nothing. This serves to fight corruption as well; for once no one gets rewarded for corrupt behavior.

4. The government will then pay these utilities and companies directly for those costs. A bank, telecom, electricity, or water company just needs to present the government with supporting evidence for reimbursement. This will have the effect of minimizing business losses, mass layoffs, and/or companies and going out of business.

5. Those businesses that institute technology, and in a manner that best supports social distancing by automating their business processes, shifting most of their functions online, including phone calls, text, social media, etc., should have priority in getting reimbursed by the government. This
serves to hasten the adoption and shift towards a technology-driven economy.

6. Landlords with legitimate tenant leases can request direct government reimbursement of up to 6 months per tenant. This serves to protect tenants, and also reward landlords who are following the law by not charging their tenants multi-year advance rents in violation of the law.

7. Restrict the indiscriminate sale and/or transfer of lands by strengthening the Office of the Administrator of Stool Lands, working in conjunction with the Lands Commission and the Stools, in collecting annual land rent for the Stools. This ensures compliance with our land leasehold laws, as well as the inflow of land rent revenue for the Stools. It will also have the added effect of reducing multiple sales of the same piece of land by the Stools and members of landowning families who have sold off their lands but are not getting their annual land rents as stipulated in Ghana’s 4th Republic constitution.

8. Henceforth, all new buildings must include indoor plumbing and toilets. We are seeing the need in lockdown situations where those without indoor plumbing have to rely on options, which can lead to the spread of the virus. This should also help with reducing and/or eradicating open defection in the long term. The government can or should organize a cadre of civil engineers/architects to advise on where to install toilets in homes that currently don't have one, and at no cost to the homeowner if the house was built at least 25 years ago. This does not cover rental and for-profit properties.

9. For those houses that were built within the past 24 years, as well as for-profit properties, grants or no-interest loans spread over 5 years should be available to all landlords who have this problem. A very strong inspectorate should be set up to enforce standards.

10. Special loans and grants will be given to companies constructing affordable housing to meet certain conditions. Affordable housing for the working poor should be a top priority.

The big question is, how does Ghana pay for all this? These measures outlined above will constitute the largest indirect payments in the history of Ghana by
the Ghana government to its citizens, which will first and foremost stabilize the economy in this crisis, then unleash economic growth. The growth generated will lead to higher revenues for the government in the long term. In the aftermath of the crisis as these policies have been instituted, the system will
have better data on taxpayers through the technology adoption and other measures stipulated above.

The 1 billion Ghana Cedis the President is making available should be a starting point for implementing these policies.

Our land is endowed with natural resources far beyond our needs. But it’s our untapped human resources that will unlock a future of progress and abundance. Now is the time to make the big move. Let’s go big. The long term benefits could be immeasurable.

In the short term, these measures are far more transparent than sending money directly to Ghanaians; it should also reduce or eliminate the use of ghost names to redirect funds into politicians and technocrats pockets.

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