Editorial: SMEs must use stimulus package to sustain business operations

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The National Labour Commission has entreated private organizations not to lay off workers, even though companies are finding it difficult to make ends meet due to the outbreak of COVID-19 and its accompanying attendant restrictions.

Though unconfirmed, news making the rounds has it that the Advertising Association of Ghana has laid off sixty per cent of workers in its industry. To this end, the Association is clamouring for government’s stimulus package to help it addressing the financing gap that has been occasioned by the partial lockdown of the country at the onset of the pandemic.

As part of measures to mitigate the effect of the pandemic, government announced a GH¢600 million stimulus packages to SMEs, though the Trades Union Congress believes the amount to be inadequate, companies within the AAG are looking to tap into the fund.

How far the amount will assuage the financial distress caused by COVID-19 to SMEs is another matter altogether, but the Chairman for the Ashanti Regional Council of the Trade Union Congress (TUC), Kofi Asare Asianowa, has implored Small and Medium Enterprises (SMEs) who may benefit to ensure the money is used for the survival of businesses as a priority.

Mr. Asianowa is therefore urging SMEs not to employ the money to expand their business operations at this material moment, because his argument is that, if such monies are channeled into expansion purposes and the pandemic does not abate anytime soon, it could be disastrous for the companies concerned.

To this end, Asare Asianowa wants government and key stakeholders to set up a strong monitoring team to regularly check up on firms that will benefit from the stimulus package and ensure they are using it for purposes that will keep businesses operational.

“Looking at how weak our monitoring systems are, some of these SMEs will go for the stimulus package and they may end up doing things that we feel are not core, or essential at this moment”. Asianowa insists that apart from keeping businesses operational, employers should ensure the prompt payment of salaries when they secure the stimulus package.

Judging from the history of the SME sector in the country and their problem of accessing credit because of weak or improper structures, the advice is well-intended so that SMEs don’t end up receiving the package and coming a few months later to complain of insolvency.

Besides, they must treat the money as a loan since they will be required to refund the money at a later date.

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