CORONANOMICS: No proper bookkeeping, no COVID-19 stimulus package

The committee set up by the Ministry of Trade and Industry to work on modalities for distribution of the GH¢1billion coronavirus stimulus package has noted that it will be relying solely on well-kept books of companies and institutions to determine the allocation of funds.

What this means is that even if a company or institution is in dire need of support, without properly kept books it will be denied the funds. For years, businesses have been sensitised on the need to keep proper books to access funding from financial institutions for growth and development.

This development, even though challenging, is one of the means through which the committee noted it wants to distribute the funds in a transparent and fair manner.

A member of the committee and Chief Executive Officer of the Ghana National Chamber of Commerce and Industry (GNCCI), Mark Badu-Aboagye, told the B&FT that all is being done to ensure every business in good standing, including the SMEs with poor book-keeping, will benefit.

But he explained that without proper books it will be difficult to ascertain exactly how much each business requires. “There are fears that if caution is not taken, some firms will receive less or more than they need to keep their operation ongoing.

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“Examining the current circumstances, I am looking at how we are going to disburse the money, on what basis. Usually, it is based on the number of staff; it is based on your revenue and your cost profile. So, if you don’t not keep proper books it is going to be an arbitrary amount based on a person’s assessment, but not based on facts and figures that you have available to you.

“So, I would encourage business that, no matter how small you are, it is important for you keep proper books. Just get an accountant or someone to keep records of your revenue, stock and cost of operation,” Mr. Badu-Aboagye said.

The GNCCI also wants the stimulus package to be linked to industrial value chains for operational resilience. According to the Chamber, it must be used to strengthen the backward and forward linkages necessary for industrial growth while addressing the interconnected risks within an industry.

“We have had occasions when monies were given to some companies and the raw material suppliers left out. In other cases, a firm gets a stimulus package but the market where the goods are expected to get sold or for export are left out. This is what we classifying as the backward and forward linkages. The package must be distributed holistically, so that all stakeholders will benefit to ensure a free flow of events in their various markets,” Mr. Badu-Aboagye explained.

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The Chamber wants government to swiftly provide clarity on intended beneficiaries of the stimulus package, the qualifying criteria and arrangements for providing the supports. The Chamber has assured of its readiness to work with government so as to ensure fair and transparent disbursement of the fund to deserving beneficiaries.

It is also asking government for a further short- to medium-term strategy for fiscal, monetary, tax policy (tax incentives) and trade policy to keep businesses running, prevent lay-offs, and protect vulnerable workers.

In the medium-term, it wants a coherent plan to support the hardest-hit industries, build resilience of the domestic value chain, and prepare the country for the next unknown pandemic or economic shock.

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