GH¢520million disbursed to protect 740,000 jobs
The government has released over GH¢520million to Micro, Small and Medium-sized Enterprises (MSMEs) to alleviate the impact of the COVID-19 pandemic in the business sector.
A total of 299, 490 firms were beneficiaries of the funds across the country under the Coronavirus Alleviation Programme Business Support Scheme (CAP-BuSS).
In doing so, over 740,000 jobs were shielded from the impact of the pandemic, which brought hardships to businesses globally.
This was done through the National Board for Small Scale Industries (NBSSI), collaborating with over 80 business associations and key participating financial institutions between May 2020 and June 2021.
This was revealed by Finance Minister Ken Ofori-Atta as he appeared in Parliament on July 29 to present the 2021 Mid-Year Budget Review.
MSMEs account for 92% of businesses and contribute to about 70% of Gross Domestic Product, according to research from the Institute of Statistical, Social and Economic Research (ISSER), University of Ghana, 2015.
Therefore, SMEs form an integral part of Ghana’s economy and any business intervention cannot be undertaken without their inclusion due to a large workforce in this sector.
Mr Ofori-Atta stated out of the total beneficiaries, “60% were women-owned businesses”.
The Finance Minister said funds were made available and largely accessible by women who would have been able to source funds to support their businesses.
Support was also provided in the form of technical training and financial and business management to 15,748 across Ghana, with about 70% being females.
The government has also created a database of 904,000 MSMEs to guide policy decisions in the future.
Women and the youth, especially in low- and middle-income countries, were the worst affected by the pandemic; hence governments targeted intervention.
Research conducted by the Center for Global Development’s COVID-19 Gender and Development Initiative revealed the following:
- In low-income countries, the employment-to-population ratio fell 2.6% for women and 1.8% for men.
- In sub-Saharan Africa, 41% of women-owned businesses closed, compared with 34% of those owned by men.
The World Trade Organization also stated that the pandemic had a larger economic impact on women due to their prominence in sectors hardest hit by the crisis, such as travel and manufacturing.
In the US, for example, the Bureau of Labor Statistics noted that job losses for women since February made up 53.6% of overall net job losses. Yet, women accounted for under half (49.7%) of the workforce.
What is the CAPBuss Initiative?
The Coronavirus Alleviation Programme (CAP) Business Support Scheme is a government programme designed to provide financial support for Micro-, Small, and Medium-sized Enterprises (MSMEs) in the wake of the pandemic.
This was launched on May 19, 2020, by President Nana Akufo-Addo.
COVID-19 impact on the economy
According to the COVID-19 Business Tracker survey, the COVID-19 pandemic has led to many job losses.
The COVID-19 Business Tracker showed that about seven hundred and seventy thousand (770,000) workers had their wages reduced, and about forty-two thousand (42,000) employees were laid off during the three-week partial lockdown imposed on the Greater Accra and Kumasi Metropolitan Areas and their contiguous districts, Tema and Kasoa.
The BoG figure confirmed the information released by the Trades Union Congress (TUC) to theghanareport.com, which estimated as many as 100,000 lost jobs in the formal sector and 400,000 being wiped off in the informal sector after an evaluation of the market.
“We estimate about half a million people who have lost their jobs and livelihoods,” Dr Kwabena Nyarko Otoo, the TUC Chief Economist and Director of the Labour Research and Policy Institute, revealed in an exclusive interview.
The contagion has hit all sectors, including health, education, tourism, agriculture, entertainment, hospitality and major services.
GSS estimates over 41,000 workers being laid off
Similarly, the Ghana Statistical Service (GSS) reported over 41,000 job losses in its Business Tracker Survey.
The figure represents 4% of the workforce of 4,311 firms involved in the survey from May 26 to June 27, 2020.
“Only 4.0% of firms indicate that they have laid-off workers, corresponding to 1.4% of the workforce (an estimated 41,952 workers).
“Also, 46.1% of business establishments reported that they reduced wages for 25.7% of the workforce (an estimated 770,124 workers),” the report said.
The Ghana Statistical Service (GSS) Business Tracker survey also showed that nearly 85,000 businesses closed down due to the plague.
Many firms could not meet their financial obligations such as salaries, operation cost and loan repayment with the Ghana Association of Bankers (GAB), estimating that banks in Ghana lost out on GH₵3 billion loan repayment from customers.
The government, therefore, had to step in with a soft loan of GHC 1billion for small and medium scale enterprises.
The government earmarked GH₵2 billion guarantee fund for over 100 large-scale firms to access more capital for operations.
Other interventions include:
- The formulation and implementation of the COVID-19 preparedness and response plan; tracing, testing and treatment.
- Waiver of personal income tax and provision of an additional fifty percent (50%) basic salary allowance to healthcare workers
- Expanding the capacities of laboratories to increase COVID-19 testing
- Establishment of isolation centres in all regions and districts
- Fumigation of markets and schools
- Provision of food packages and hot meals for residents in areas affected by the partial lockdown
- Provision of free water for all households, provision of free electricity for lifeline consumers and a fifty percent (50%) discount for all other consumers
- Reduction in the Communication Service Tax (CST) from nine percent (9%) to five percent (5%), the institution of a seven hundred and fifty million cedis (GH¢750 million) loan facility for micro, small and medium enterprises through the CAPBUS Initiative
- The provision of a two billion cedis (GH¢2 billion) guarantee facility to support large businesses, such as schools and pharmaceutical companies