Nana Appiagyei Dankawoso I, the President of the Ghana National Chamber of Commerce and Industry (GNCCI), has called on government to use the critical moment of COVID-19 to encourage domestic production.
Given the global disruption of international trade resulting from COVID-19, he said, Ghana must find innovative ways of supporting her domestic firms in the production value chain.
This was contained in a statement signed by Nana Dankawoso and copied to the Ghana News Agency in Accra.
The COVID-19 pandemic and its associated impacts including; lockdowns, the statement said, had had dire consequences on businesses, more especially Small and Medium-sized Enterprises (SMEs) in Ghana.
Meanwhile the contribution of SMEs to Ghana’s socioeconomic development could not be overemphasised.
Therefore, any adverse effect that threatened the continued viability of SMEs would have a far-reaching and irreversible damage to the Ghanaian economy.
To salvage the situation and ensure that the Ghanaian economy is back on track, government in consultation with key stakeholders have announced some measures to mitigate the impact of COVID-19 on businesses.
Some are a reduction in the monetary policy rate from 16 per cent to 14.5 per cent and a two per cent reduction of interest rates on the Ghana Reference Rate (GRR); and a GH¢1 billion stimulus package to support businesses, more especially SMEs.
Others are a syndication facility of GH¢3 billion to support industry especially in the pharmaceutical, hospitality, service and manufacturing sectors; a six (6) month moratorium of principal loan repayments for selected businesses; an extension of the deadline for the filing of taxes from four to six months after the end of the basis year; and a possible reduction in the cost of data and telecommunications to households and businesses, the statement said.
The Chamber commended government for steps taken to protect lives and industries and urged the Bank of Ghana to work with the Commercial Banks to ensure that the reduction in policy rate translated into reduction in the lending rates, to minimize the cost credit to business.
“We all know the tenuous relationship between Policy rates and lending rates. This is the time for the policy rate to be effective in affecting lending rates,” it added.
It recommended that the stimulus package be linked to industrial value chains for operational resilience and be used to strengthen the backward and forward linkages necessary for industrial growth, while addressing the interconnected risks within an industry.
The statement called on government to adopt a holistic approach in designing and disbursing the stimulus packages and provide clarity on the intended beneficiaries of the package, the qualifying criteria and arrangements for providing the supports.
The Chamber believed there was the need for further short- to medium-term strategies for fiscal, monetary, tax policy (tax incentives) and trade policy to keep businesses running, prevent lay-offs, and protect vulnerable workers.
“In the medium-term, a coherent plan must be developed to support the hardest-hit industries, build resilience of the domestic value chain and prepare the country for the next unknown pandemic or economic shock,” it said.
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