GH¢100bn package unveiled to revive economy

Ken Ofori-Atta, Finance Minister
  • introduces unemployment insurance
  • empower GCX, NAFCO to boost food security
  • expand procurement of local goods and services

Minister of Finance Ken Ofori Atta has announced an ambitious three-and-a-half-year economic recovery plan geared at resuscitating the economy from the impact of the outbreak of the Coronavirus pandemic with aggressive focus on boosting food security, expanding the procurement of local goods and services and introducing unemployment insurance for jobs lost due to the pandemic.

According to him, the GH¢100 billion economic turnaround programme would begin the aggressive normalizations of the economy. Expected to begin between now and 2023, government would provide between GH¢20-30 billion directly with the rest expected to come from the private sector.

“I am happy to announce that in the coming weeks the President will launch a GH¢100 billion development programme. An ambitious and unprecedented three-and-half years programme called Ghana CARES, ‘Obaatan Pa’, which will anchor the comprehensive transformation of our society.

It is sequenced in two phases: a Stabilisation Phase that runs from July to the end of the year 2020 and a medium-term Revitalisation Phase that will accelerate the Ghana Beyond Aid transformation agenda,” he said as he presented the 2020 mid-year budget review to lawmakers.

Boosting food security and expanding local procurement

Delving deeper into the ambitious programme, Mr. Ofori-Atta explained that the stabilisation phase of CARES will ensure food security, protect businesses and worker incomes, strengthen the health system, attract private investments and support Ghanaian businesses. Government, he noted, will intensify support for farmers through the Planting for Food and Jobs and Rearing for Food and Jobs programmes.

“We will aggressively facilitate access to financing for rice millers to enable them to purchase paddy from rice farmers. In addition, we will provide financial support to the National Buffer Stock Company and Ghana Commodity Exchange to enable them store and trade stocks as needed to smoothen out supplies on the market.

Government will inject liquidity into the system to ease cash flow difficulties of businesses and protect workers by honouring obligations to contractors and suppliers in a timely manner. Building on recent good experience of sourcing from the pharmaceuticals and textile and garment sectors, government will expand procurement from local producers for its goods and services,” he said.

Unemployment insurance

Noting that it is expected to see some jobs lost due to the virus in order for businesses to survive, the Finance Minister announced that government, through the Ministry of Employment and Labour Relations (MELR), would collaborate with the social partners (labour and employers) to establish a National Unemployment Insurance Scheme.

“The scheme will provide temporary income support to workers that are laid off and also provide them access to re-training to help them take advantage of employment opportunities in new fields.”

Laws to secure the future of investments

In addition to these measures, Mr. Ofori-Atta said government will, over the course of this year, work with parliament to pass a number of legislations that will provide a strong framework to raise the funds, attract the investments necessary for the revitalisation and transformation phase of CARES and rationalise and strengthen support to SMEs.

These will include bills on tax exemptions, public-private partnerships (PPPs), the Ghana Investment Promotion Centre (GIPC), Development Finance Institutions, Home Ownership Financing and Enterprise Ghana.

Phase Two would move Ghana Beyond Aid

The second phase, which would focus on accelerating the implementation of the Ghana Beyond Aid agenda, would see government take resolute measures to improve the business environment for the private sector.

Specific measures, he added, to be implemented include significant improvements in business regulations and their implementation, digitisation to improve quality and transparency of public service delivery, expanding access to finance for Ghanaian business, skills training, and energy sector reform.

“We all know that a plan is only as good as its implementation; it is not enough just to raise the money. So, for the CARES Programme, execution, execution, and execution would have to be the watchwords. The CARES Revitalisation and Transformation agenda is about national survival and security, just like our response to the COVID-19 pandemic itself.

Therefore, we need to approach it as such, with a resolute focus on implementation. We will have to pursue a ‘Whole-of-Government’ approach, and in close collaboration with and support to the private sector. And we will make sure they happen,” Mr. Ofori Atta said.

Consumption of Made in Ghana campaign

The Finance Minister noted that, government will vigorously promote the consumption of locally produced goods and services in order to support local businesses and generate employment.

To this end, MDAs and MMDAs would be required to prioritise the procurement of local goods and services and the Public Procurement Authority and Central Tender Review Committee shall be so instructed. “The aim is to generate local demand and consumption with the full force of government’s procurement capacity to ensure that most of government procurement will be sourced locally.”

Already, some GH¢600 million is being disbursed under the CAP Business Support Scheme and to him, the country would not waste the crises but would position itself to move forward.

“In an effort to combat the pandemic and quickly return to our pre-COVID-19 growth and fiscal path, we are injecting GH¢600 million through the CAP Business Support Scheme by providing soft loan to Micro, Small and Medium Businesses (MSMB) and sole proprietors who have been invariable impacted by the pandemic,” Mr. Ofori Atta said at the Presidential launch of CAP at the Jubilee house.

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