The Chief Executive Officer of the Private Enterprise Federation (PEF) Nana Osei Bonsu has described as inadequate the proposed stimulus package for small businesses in the country.
Speaking on PM Express Business Edition, on the topic ‘Supporting Businesses hit by covid- 19: Stimulus Package or Policy Reliefs?’ Nana Osei Bonsu noted that looking at the number of Small and Medium Enterprises in the country that are eligible, the proposed funds would not be enough to support them in any way and to deal with the current challenges that most small enterprises are going through.
The government in April this year announced it would roll out a GH¢600 million stimulus packaged targeted at Small and Medium Scale Enterprises.
The partner banks are supporting fund with additional GH¢400 million, bringing the total amount targeted at small businesses to GH¢1 billion. The facility is being managed by the National Board for Small Scale Industries (NBSSI) and would have KPMG as its technical partner.
According to NBSSI, beneficiaries of the facility would pay an interest of three per cent.
Nana Osei Bons maintained that a fraction of the funds would go into the administrative cost, therefore this would even reduce the amount left for SME’s drawdown for their operations, adding that as a country, “we need to do more, If we want to fast track the recovery.”
Businesses and planned layoffs
A lot of businesses have laid off staff as a result of the negative impact of the coronavirus. But Nana Osei Bonsu maintained that most of these firms did not have a choice in taking this action.
He said most of these firms are under serious pressure from declining earnings and the best thing to do is look at innovative ways to stay in business. Asked whether there would be more layoffs, Nana Osei Bonsu in his response noted that it is expected, adding, that might be the best way out for these firms to survive.
Stimulus package or policy reliefs for businesses in the country.
Nana Osei Bonsu noted the private sector needs both a stimulus package that would be in the form of liquidity support for businesses and some policy measures that would improve the environment for businesses to grow and expand in these challenging times.
He noted that there is no ambiguity as to what enterprises need right now to stay in business, “liquidity is critical for businesses and that is what we need right now”.
He added that it is very important that private firms are given the required incentives to play a led role in helping turn around the economy and aid the economic turnaround.
Payment of locked-up funds
The Private Enterprise Federation also criticized the way the receiver is handling the payment of businesses and financial institutions that have had their funds locked up with firms and had their licenses revoked by Bank of Ghana (BoG) and the Securities and Exchange Commission (SEC).
Nana Osei Bonsu noted that it is not fair, to pay monies back without the required interest being paid on these funds’ “where did the government have the right to take and use my money without the required interest being paid on it. This is not accepted”.
He added that there is no way those who supervised the collapse of these institutions can be excused.
The Private Enterprise Federation boss added that a consortium of business associations would collectively present a document to the government on turning around the economy and supporting businesses.
He said, “PEF chairing the international business association – the American Chamber of Commerce, the UK Chamber of Commerce, the Germans, the French and others together with our locals are now presenting a paper to government as to what we want.”