“This COVID has brought to the fore domestication of our economy, …”- Says PEF BOSS
The COVID-19 pandemic is indeed all spruced up and strutting on the runway in destruction of global economies. In a matter of months, it has maliciously penetrated nations and disrupted projected plans and policies of countries as well as strategies and contract signing of both private and governmental corporation and businesses.
Indeed, it has brought the world to its knees, begging for respite and reaching a universal consensus of damage control. There has been much deliberation and discussion on the dire effect of the pandemic on government purse, undue pressure on governmental institutions and stakeholders, an imminent growth in unemployment, healthcare system overload and extensive education on the virus.
Conversations on the stimulus packages doled out by government to sustain the economy and sectors in the country have dominated public space. Questions on whether the funds are sufficient to keep businesses above water have surfaced as the virus is projected to cohabit with us well into next year and even beyond.
The private sector which has relatively kept mum on the matter has joined in on the conversation, with a promise to engage government in a dialogue on the best way forward for the sector. Businesses are on a cliff edge with many fearing for the worst to happen.
That notwithstanding, the Private Enterprise Federation has been speaking on the need for government to step up on the stimulus package by spicing it with other policy reliefs as enablers for the sector.
In speaking on the matter, the CEO of the Private Enterprise Federation, Mr. Nana Osei Bonsu made some analytical diagnosis on the inherent problems facing the private sector and also proffering solutions on how best government can ameliorate the predicament of private business owners.
In his words: “people do not set up businesses to create jobs, they set up businesses to make money”, with the private sector creating 93% of the job as against government’s quota of 6.3%.
Social distancing versus Productivity of Employees
With the lifting of lockdown restrictions, businesses have heaved a sigh of temporary relief, but even with that, some people are not chanting a victory song as some organizations are still paranoid and have resorted to working from home.
The brave few who have opened business have had to adhere to the social distancing and proper hygiene protocol, which is a costly venture for employers. “It is easy to make the rules, but compliance is our cost because you expect people to wear face mask and we must pay for it, you expect people to practice social distancing who is paying for it?”
The issue of social distancing comes at a cost as some businesses do not have the logistics for their staff to work from home and funds even to provide sanitizers and dispensers for hand washing.
He advised the government to make the rule for legislators to ensure that the resources are available for people to have access to, although there may not be residual funds for them to tap into, but creating a system where manufacturers, distributors, suppliers and retailers converge to trade, overlap and interconnect based on need, purpose and demand will allow the free flow of cash within the sector and oil the wheel of sustainability.
Every business needs an enabling environment to thrive and it’s no different with the private sector. However, thriving isn’t achieved in a vacuum and what the sector needs according Mr. Osei is money- liquidity!
The prosperity of any organization is dependent on money and from there other enabling factors such as the technical and competence skill can be considered because if the policy framework within an organization isn’t conducive, you can’t do business.
Free market access gives you enough leg room to operate and do business effectively, as business without money is ineffective. Incentivizing of businesses and tax rebate in this season will also ease the burden on the private sector.
Stimulus package and policy reliefs
The concept and discourse on stimulus package as part of government’s measures to stimulate businesses and enterprises from crumbling and act as a palliative solution has experienced some level of ambivalence within the public sphere.
Mr. Osei explained stimulus package as “stimulating activities to enable and create and engender things to happen”. The private sector will only succeed with the needed incentive from government as the by-products are profitability, job and opportunity creation.
For government consideration, the federation has tabled not just liquidity but enablers in creating opportunities for them to operate within the market as he also believes that incentivizing the private sector when they aid startups and the youth through tax exemptions will augur well for the success of the sector and urge other stakeholders in the business, without recourse to loans by the youth.
He cited an example where a youth section of the federation has resorted to crowd funding and how it could have been achieved better had the enablers been in place. He demanded government to pay money owed certain businesses within the private sector, even as they are giving emolument packages for their business.
“This COVID has brought to the fore domestication of our economy, if we do not domesticate and depend on foreign, where are we going to get the money to pay”.
The perks in self reliance and dependence on natural and human resources has been demonstrated by Malaysia, Dubai and other countries who, having minimal natural resources, have risen to the occasion and carved an indelible print in the minds and hearts of people. Essentially, we are to look inward and build capacity, skills and competence to initiate a growing economy devoid of regular imports.
The group has prepared a dossier for the government on how the private sector can be resurrected. According to the CEO, despite the sinking of businesses, delivering of the document doesn’t mean there’ll be action on it, as it will be the prerogative of the government to decide on what is of priority.
He posited that, the responsibility is on the private sector, legislature and executive to create tax exemption laws and statues to create a formidable environment as the current pandemic is the greatest opportunity for Africa with its youthful population to achieve sterling heights.