Government urged to announce modalities for accessing GHS600m SME loan
Professor Peter Quartey - Economist
The National Board for Small Scale Industries, (NBSSI) has been urged to as a matter of urgency come out with modalities required for the disbursement of government’s stimulus package of 600 million cedis meant to support small businesses as the country fights the coronavirus pandemic.
The government announced that it has set aside 600 million cedis to help sustain the operations of businesses heavily affected by the COVID-19 pandemic.
The Ghana Union of Traders Association, GUTA, and the Association of Ghana Industries, AGI, have all requested for modalities that will be used in disbursing the funds to inform their members, but the NBSSI is yet to outdoor a plan.
Meanwhile, President Akufo-Addo has announced that the disbursement is likely to start in May this year.
Responding to question on this issue, Economist, Professor Peter Quartey said delays in announcing the modalities is not good for business planning in this period of uncertainties.
“I was expecting that by now, the modalities for disbursing these funds would have been made clear by National Board for Small Scale Industries. I know they have a structure that manages where you register with them. They also have a website that manages the system for accepting applications. But I expect to see an announcement to the private sector asking people for applications. These are the modalities, but that has not happened, and at this particular moment, you expect monies to be disbursed as quickly as possible,” he said.
“…Of course with the necessary credit appraisals, but these are not normal times. You don’t wait for 10 months or whatever to disburse loans. It will be too late. I expect that these funds will be disbursed as quickly as possible, possibly within the month so that businesses can access these loans to start producing some of the import substitutes,” he added.
The facility will have a one-year moratorium and two-year repayment period for micro, small and medium scale businesses.
The outbreak of the novel Coronavirus in the country, necessitated a three-week partial lock-down, a situation which placed many businesses on hold as part of measures to mitigate the spread of the global pandemic.
Though the lockdown has been lifted, allowing some businesses to resume their operations, some stakeholders believe business will take a while in getting back on their feet.
Interventions so far
Following President Akufo-Addo’s order for an economic impact assessment of the COVID-19 pandemic on the country, the Finance Minister announced that the cumulative effect of the pandemic will cost Ghana GHS9.505 billion.
The Finance Committee of Parliament has given authorization to the Minister of Finance to spend GHS1.2 billion from the Contingency Fund.
The Finance Minister has also asked for the support of Parliament to amend the relevant laws to lower the cap of the Stabilization Fund from US$300 million to US$100 million to enable the government use the excess funds to bridge the economic gap created as a result of the pandemic.
There’s also a request to amend the Petroleum Revenue Management Act to use portions of the Ghana Heritage Fund to help the fight against the virus although the decision has been heavily criticised.
Externally, the International Monetary Fund (IMF), has approved a disbursement of US$1 billion to help Ghana address the urgent fiscal and balance of payments needs that Ghana is facing in the wake of the pandemic.