Government and key stakeholders in the private sector are mapping out distribution criteria for the Ghc600 million stimulus package earmarked for micro and small businesses in the country.
This is to ensure that the most deserving businesses get access to the package, aimed at re-igniting the Ghanaian economy after the adverse effects the Coronavirus Disease (Covid-19) pandemic is having on business activities.
Determination of the criteria is expected to be completed soon to enable distribution of the package begin this month.
The criteria, according to industry analysts, will also specify the maximum as well as minimum amounts an entity can receive under the package.
The loan package, which comes with one-year moratorium and two-year repayment period, is expected to ease some of the burden on the operations of Micro, Small and Medium-sized Enterprises (MSMEs).
Already, the National Board for Small Scale Industries, NBSSI, has developed an online portal to enable businesses access the GHc600 stimulus package. In all more than 200,000 MSMEs are expected to benefit. NBSSI a state owned institution charged with facilitating the growth and development of small businesses in Ghana has been given responsibility for disbursing the soft loans by government and is collaborating with major business groupings such as the Association of Ghana Industries and the Ghana National Chamber for Commerce and Industry in this regard.
Various assessments indicate that the continuous impact of the Coronavirus would hit the world’s economy even harder than originally anticipated and as such it is vital to reinforce the economy, most especially giving soft loans to businesses, to withstand any further shocks.
Collapse of businesses coupled with loss of jobs are some major shocks this new global pandemic is ravaging on world economies and countries in sub-Sahara Africa are projected to be the most affected.
The International Organisation (ILO), is reporting that the rapidly intensifying economic effects of COVID-19 on the world of work are proving to be far worse than the 2008-9 financial crisis, with job cutbacks equivalent to nearly 200 million full-time workers expected over the next three months alone.
Again, the latest Africa’s Pulse report – the World Bank’s twice yearly economic update on the region also indicates that growth in Sub-Saharan Africa has been significantly impacted by the ongoing coronavirus outbreak and is forecast to fall sharply from 2.4 percent in 2019 to a contraction rate of between 2.1 percent to 5.1 percent this year, this being the first recession in the region over the past 25 years.
It is estimated to that COVID-19 will cost the Sub-saharan region between US$37 billion and US$79 billion in output losses for 2020 due to a combination of adverse effects.
They include trade and value chain disruptions, which impact commodity exporters and countries with strong value chain participation; reduced foreign financing flows from remittances, tourism, foreign direct investment, foreign aid, combined with capital flight; and direct impacts on health systems, and disruptions caused by containment measures and the public response, the report added.