Coronavirus: Give businesses stimulus package – ILAPI to gov’t

The Institute for Liberty and Policy Innovation (ILAPI) has called on the government of Ghana to compensate businesses across the country in the wake of the COVID-19 outbreak.

Ghana has, so far, recorded 68 cases with two deaths.

The government, as part of measures to prevent further spread of the disease, has put a ban on all public gatherings. Schools have also been shut down.

Some corporate organisations have also begun running with skeletal staff while others are making their employees work from home to ensure the virus does not spread further.

In a statement, ILAPI noted that as market activities continue to drop, “forward-looking fiscal and monetary measures are necessary to save the economy” from the impact of the COVID-19 pandemic.

The institute indicated that with the current development, “businesses would close and physical activities would seize. Because of inexplicable barriers that the coronavirus crisis brings, people may be prevented from doing useful things for income and wealth creation”, emphasising that “in the process, businesses must be compensated and this calls for both critically fiscal and monetary measures”.

ILAPI continued: “As an SME economy, the government must spend more to support local businesses with some tax rebates, financial reliefs, refunds and social assistance. Total lockdown might not be the best option for Ghana but should that happen, more expenditure is needed to sustain economic growth with an economic stimulus package of over GHS15 billion for 28 days.

“Registered businesses and firms would have to shut down operations with employees going home with salaries or not. The informal economy would suffer from the lockdown because of lost daily sales and income. The sector may not directly benefit from the emergency financial response. This would reduce individual income and purchasing power.”

According to ILAPI, the government “would still have to ensure the continuation of salaries of public sector employment and provision of basic needs and other services including electricity, essential services, water and food.”

It added that in case of a lockdown in the country, “certain goods and services that people would otherwise buy and enjoy will be off limit”, which will require that Ghanaians spend more, making saving impossible.

ILAPI said should there be a lockdown, the government should give a great amount of attention to “businesses, jobs, internet connection, transport, fuel, tax compliance, raw materials, manufacturing, rent, healthcare, agriculture, security, utilities and occupational licences” and proposed that the government meet “all the relevant business associations including the manufacturing firms to deliberate consciously on production capacity and job losses, meet the Insurance Commission as early as possible so insurance companies could make readily available partial payment to their clients to support them in times of the panic. They should also provide an exclusive premium to their clients to support the government’s health interventions and salaries of workers should not be subjected to full tax deductions”.

ILAPI suggests there must be “at least 50% tax refund.”

ILAPI also proposed that the “Ghana Water Company should consider opening taps for those who are owing bills” as people need more water for hand washing.

It suggested that the Ministry of Food and Agriculture, through the Buffer Food Stock, “develop an outline to supply food to underprivileged homes”, and “the government should support companies in Ghana (both local and foreign) to change their structure of production to produce some essential goods to avoid shortage during the lockdown, GRIDCO, VRA and ECG must ensure there is continuous supply of power since most institutions would be working from home”.

“Tariffs on electricity and electricity should be reduced. There are people who don't even have a place to get locked inside. Ghana has a housing deficit of over 1.5 million. Therefore, the government must advance plans to shelter some millions of Ghanaians in hotels, motels, and guest houses among others.”