TUC Proposes Gov’t Injects GHs 18 bn Into The Economy To Alleviate Losses

TUC Proposes Gov’t Injects GHs 18 bn Into The Economy To Alleviate Losses

The Trades Union Congress (TUC) has called on government to invest an amount of GHS 18 billion into the various sectors of the economy to help alleviate the effects of the novel coronavirus pandemic.

Research conducted by the Congress’ Labour Research and Policy Institute suggested that there will be devastating impacts of the pandemic on jobs and livelihoods in both the formal and informal segments of the economy.

This call was made by the Director of Labour Research and Policy Institute of the TUC, Dr. Kwabena Nyarko Otoo while speaking in an interview. He emphasized the need for government to inject more into the economy in order to revive it and manage the potential job losses as well.

He indicated that TUC’s estimation was based on the data presented by the Minister for Finance.

He said, “one of the things we did was to estimate the loss of GDP that we are likely to experience because of COVID-19 and our estimation is based on the data provided by the Minister for Finance when he told Parliament that the 2020 GDP growth which was initially estimated at 6.6% will now be 1.5%.”

 

He highlighted that the projected loss is GHs 18 billion hence if government should invest that much by the end of the year, then businesses will be fine. 

“When we look at the numbers we are looking at an output loss of about GHs 18 billion and our proposal is for government to find the resources that will fully restore us in terms of the output loss so we are asking government to invest about GHs 18 billion into the economy between now and December.”

 

Dr. Nyarko Otoo also stated that the TUC is aware that this is a difficult time for government as it finds itself in a grim situation due to the impact of the COVID-19 on the economy.

He however suggested alternatives by which the government could get more money into the system. According to him, government can either print more money or borrow from the Ghana Heritage Fund (GHF) to support the economy during these critical moments caused by the health crisis.

He justified his proposal of borrowing from the Ghana Heritage Fund by saying,

“we went to borrow from the IMF with all the conditionality. If we were able to borrow from the IMF, it should be safer to ask government to borrow from the future. So that we replenish that fund when the COVID-19 storm is over.”

 

Disbursement of the stimulus package

Many individuals and groups have called on government to be fair in the disbursement of funds. One of the major advocates is The Ghana Union of Traders Association (GUTA). GUTA called on government for a broader stakeholder consultation on the utilization of the GHS 600 million soft loan scheme for micro, small and medium scale businesses affected by the novel coronavirus pandemic.

The association indicated that government should as a matter of urgency constitute a committee to ensure some prudence in the distribution.

Call to avoid partisanship

GUTA also previously asked the government to avoid partisanship in the management of the soft loan scheme.

It asked that the scheme be managed in a “fair, transparent and equitable manner, devoid of partisan politics.”

It also urged beneficiaries not to misuse the funds and to pay back the loan per the arrangement.

Persons who access these loans will have a one-year grace period before beginning repayment. The scheme also allows for a two-year repayment plan.