As the market activities continue to drop and many Ghanaians are calling for a Lockdown, foward-looking fiscal and monetary measures are necessary to save the economy from impacts of the coronavirus pandemic.
The exponential growth of the number of cases is already causing a progressive lockdown. With this development, businesses would close and physical activities would seize. Because of inexplicable barriers that the coronavirus crisis brings, people may be prevented from doing useful things for income and wealth creation.
In the process, businesses must be compensated and this calls for both critical fiscal and monetary measures.
As an SME economy, government must spend more to support local businesses with some tax rebates, financial reliefs, refunds and social assistance. Total lockdown might not be the best option for Ghana but should that happen, more expenditure is needed to sustain economic growth with an economic stimulus package of over GH15 Billion for a 28-day lockdown.
Registered businesses and firms would have to shut down operations with employees going home with salaries or not.
The informal economy would suffer from the lockdown because of loss of daily sales and income. The sector may not directly benefit from the emergency financial response. This would reduce individual income and purchasing power.
However, government would still have to ensure the continuation of salaries of public sector employment and provision of basic needs and other services including electricity, essential services, water and food.
With a a total lockdown, certain goods and services that people would otherwise buy and enjoy will be off limit. It does not mean, however, that one would have stopped eating. Instead, you make your food at home. Due to this Ghanaians may now spend more money on other things. Switching from consumption to saving might be impossible at this time. This will encourage people to spend rather than save.
Making readily available the package is important for private sector planning of business sustainability and job security in this COVID-19 pandemic. Critical areas to consider include; businesses, jobs, internet connection, transport, fuel, tax compliance, raw materials, manufacturing , rent, health care, agriculture, security, utilities and occupational licenses.
*we propose the following:*
1. Government must meet all the relevant business associations including the manufacturing firms to deliberate consciously on production capacity and job loss.
2. Insurance companies cannot remain same with our insurance premiums during lockdowns. Government must meet the Insurance commission as early as possible so that insurance companies could make readily available partial payment to their clients to support them in times of the panic. They should also provide exclusive premiums to their clients to support government health interventions.
3. Salaries of workers should not be subjected to full tax deductions. At least 50% tax refund.
4. Ghana water company should consider opening taps for those who are owing bills. More water needed for hand washing and the that cost should be factored too.
5. The ministry of food and Agriculture through the Buffer Food Stock should develop an outline to supply food to underpriviledged homes.
6. The government should support companies in Ghana (both local and foreign) to change their structure of production to produce some essential goods to avoid shortage during the lockdown.
7. GRIDCO, VRA and ECG must ensure there is continuous supply of power since most institutions would be working from home. Tariffs on electricity and electricity should be reduced.
8. There are people who don't even have a place to get locked inside. Ghana has a housing deficit of over 1.5 million. Therefore, the government must advance plans to shelter some millions of Ghanaians in hotels, motels, and guest houses among others.
As a policy analysis organization, we make these proposals based on a careful study of other nations which have implemented lockdowns due to COVID19. And we believe that these measures should suffice, though not completely, in helping manage the situation of a lockdown.
Institute for Liberty & Policy Innovation (ILAPI)
Mr. Evans Badu Boampong.
Young Africans for Opportunities (YAFO)
( www.yafopportunities.org )