Economic Advisor at the United Nations Development Programme (UNDP) in Ghana, Dr Frederick Mugisha has called for deeper engagement with the businesses community on government’s COVID-19 relief packages.
Analysis of findings from the COVID-19 Business Tracker survey revealed 4,160 out of 4311 firms representing 96.5 per cent did not receive any support at the initial starting stage of government’s COVID-19 Alleviation Programme (CAP).
Speaking exclusively to Business Finder, Dr Mugisha said “what this implies is that, there is the need to create more awareness on such interventions right from the starting point so more firms can benefit.”
The findings, the UN agency economic advisor said also explained why the results show only few businesses were aware of the support and 35.1 per cent of businesses were not aware at all.
Other ways of supporting businesses
Dr Mugisha further called for more innovative ways of extending support to businesses.
“We also need to identify other ways of providing support to businesses in order to comprehensively help in mitigating the impacts of the pandemic and policy choices will help,” he stated.
Businesses grapple with uncertainty
Despite the partial lifting of the lockdown and easing of many restrictions, some firms continue to report uncertainty. In response to the prospects of many firms, the survey showed a high degree of doubts in the expectations of firms.
“Uncertainty is an important additional channel affecting firms during the pandemic and as the economy re-opens, this could result in a lower desire for risk and investments”, the survey reported.
The report revealed that only 3.5 percent of firms had reported receiving government assistance, with 12 percent of firms not applying for the funds due to some preconceived ideas that they would not get it. Meanwhile, businesses were constantly recording a decline in sales amidst the adverse implications it had on employment and the operating model of firms.
Findings from the survey revealed that in as much as 35 percent lacked awareness on the package, some 7 percent felt the processes of acquiring the fund were too difficult. Another 3.6 percent were not eligible for the support while some 7 percent had applied but had not received the money.
About 34.7 percent of firms gave no reasons for not trying to assess the fund.
Drop in sales and employment
“Firms anticipate a decline in demand of 23.5 percent and a decline in employment of 15 percent over the next 6 months, compared to the same time period last year”, the report noted.
However, some firms reported that they expected a 0.8 percent decrease in sales and 5.5 percent in employment. In the most optimistic scenario, the report showed that other firms expected a 25 percent increase in sales and 4.3 percent in employment.
Support for firms in a long and short term
The survey recommended improvement of liquidity, saying “subsidized interest rates, cash transfers and deferral of payments should be the most desired policies that would help address the decrease in demand as well as difficulties in financing firms in difficult positions.”
The report further stressed the need to increase awareness on the guidelines and requirements for the disbursement of the stimulus packages since many firms indicated they were not aware of support programmes.
In the medium to longer-term, the report suggested that efforts should be concentrated on re-establishing channels that were adversely affected during the pandemic and also help firms adjust to the “new normal” by improving their capabilities to boost productivity.
“Firms are affected by multiple channels at the same time. Reestablishing supply channels, access to finance and access to foreign markets to boost demand will be crucial for firms to regain productivity”, the report from the survey indicated.