Coronavirus: Access to syndicated loan must be transparent – GNCCI

The Ghana National Chamber of Commerce and Industry (GNCCI) has urged government to consult with financial industry players to make known the modalities for accessing the three billion Ghana cedis syndicated loan by large enterprises.

Nana Dr Appiagyei Dankawoso I, the GNCCI President, said businesses needed to be supported and that must be done quickly.

Nana Dankawoso, speaking in a webinar, said government’s stimulus package should be structured to address input supplies, production capacities, end markets, and employee management given the size of firm and business sector.

The webinar, organised by the Chamber, was on the theme: "COVID-19 Strategies for Business Survival and Growth."

He said the outbreak of COVID-19 had affected entirely every aspect of human life and national economies with disruptions in their usual activities.

"In particular, there have been shutdowns of factories, lay-offs, reduction in working hours, redundancy and disruptions in global value chains as attendant effects of the current pandemic," he said.

He said in response, several governments across the globe had implemented a number of measures including emergency stimulus package and interest waivers.

The President commended government for implementing a number of measures in consultation with key stakeholders.

He said as the representative organ of the business community, the GNCCI undertook a business survey to elicit the concerns and expectations of stakeholders towards ensuring an effective engagement with government on the Covid-19 pandemic.

He said the results showed that respondents were generally satisfied with the communication on COVID-19 and government response.

Nana Dankawoso said businesses had been proactive in curbing the spread with the predominate responses being increasing awareness and keeping workplace safe and hygienic.

Others include investing in personal protective equipment, working from home, or taking paid-leave.

He said the total estimated financial cost of COVID-19 per the 108 sampled business respondents was GH¢39,823,407 and the results showed that the estimated cost on businesses differed and increased with firm sizes.

He said for the micro enterprise it was estimated at GH¢22,500.00; small enterprise GH¢50,000.00, medium enterprise GH¢500,000.00, and large enterprise GH¢600,000.00.

Nana Dankawoso said the survey suggested that government’s stimulus package of GH¢600 million to be disbursed among about 200,000 SMEs was woefully inadequate (average of GH¢3,000.00) even for the micro enterprise (GH¢22,500.00).

"Also, the delay in the disbursement of the stimulus package is further worsening the plight of SMEs," he added.

He expressed the hope that the webinar would provide businesses with key insights to help them navigate this pandemic.

Professor Peter Quartey, the Director, Institute of Statistical, Social and Economic Research, University of Ghana, said there was the need for salary support for employees as done in other countries.

He said loans could not be used to pay salaries of workers, especially when SMEs were not operating, adding that government interventions, though significant, was inadequate to stimulate the economy from recession.

Prof Quartey said the intervention was approximately about 3.2 percent of GDP compared to 10 percent of GDP in South Africa.

He explained that the National Board for Small Scale Industry (NBSSI) loan of GHc600 million did not support payment of salaries of employees of businesses.

He said in the case of South Africa, 40 million Rand out of 500 million Rand was allocated for salaries of businesses, which could not pay their employees.

Prof Quartey said the capacity of the NBSSI was in question to disburse the GHc600 million stimulus package and the modalities for disbursement were yet to be advertised.

He urged government to seek additional support including expenditure prioritisation to stimulate private business growth.