Ghana needs GHC15bn for nationwide lockdown

The President for Institute of Liberty and Policy Innovation (ILAPI), Mr Peter Bismark, has stated that Ghana requires GH?15 billion for 28 days’ total lockdown to sustain the economy and protect the lives of its citizens.

He said those who are calling for a total lockdown should note that, it isn't necessarily the best option for Ghana because should that happen, a stimulus package of over GH?15 billion would be needed for a 28-day lockdown.

“If it happens like that, it means that registered businesses and firms would have to shut down operations with employees going home, and go with salaries,” he said.

The president of ILAPI said the government would still have to ensure the continuation of salaries of public sector employment and provision of basic needs and other services, including electricity, essential services, water and food.

Mr Bismark said this in a release from the institute yesterday.

He said the informal economy would suffer from the lockdown because of loss of daily sales and income. The sector, he said, may not directly benefit from the emergency financial response but would reduce individual income and purchasing power.

According to him, since Ghana’s economy thrives on small and medium-scale enterprises, the government must spend more to support local businesses with some tax rebates, financial reliefs, refunds and social assistance.

Total lockdown

“As the market activities continue to drop and many Ghanaians are calling for a total lockdown, foward-looking fiscal and monetary measures are necessary to save the economy from impacts of the coronavirus pandemic,” he stated

Mr Bismark said the exponential growth of the number of cases is already causing a progressive lockdown.

“With this development, businesses would close and physical activities would cease. Because of inexplicable barriers that the coronavirus crisis brings, people may be prevented from doing useful things for income and wealth creation.”

He stated that in the process, businesses must be compensated and this would call for both critical fiscal and monetary measures.

“With a total lockdown, certain goods and services that people would otherwise buy and enjoy will be off-limit. It does not mean, however, that one would have stopped eating; instead, you make your food at home and due to this Ghanaians may now spend more money on other things,” the ILAPI boss stated.

He said switching from consumption to saving might be impossible at this time because the situation would encourage people to spend rather than save.

Mr Bismark said making readily available the package was important for private sector planning of business sustainability and job security in this COVID-19 pandemic.

He added that the critical areas to consider include businesses, jobs, internet connectivity, transport, fuel, tax compliance, raw materials, manufacturing, rent, health care, agriculture, security, utilities and occupational licenses.

Measures

The Vice-President of ILAPI, Mr Evans Badu Boampong, said the government must meet all the relevant business associations, including the manufacturing firms, to deliberate consciously on production capacity and job loss.

He said insurance companies could not remain same with our insurance premiums during lockdowns so the government again must meet the Insurance Commission as early as possible to make readily available partial payment to their clients to support them in times of the panic.

“They should also provide exclusive premiums to their clients to support government health interventions,” Mr Boampong said.

He said salaries of workers should not be subjected to full tax deductions, suggesting that at least 50% tax refund should be given workers while Ghana Water Company should consider opening taps for those who are even owing bills to ensure there is free flow of water to aid hand washing.

The Ministry of Food and Agriculture, through the Buffer Food Stock, Mr Boampong said, should develop an outline system to supply food to underprivileged homes and also support companies in Ghana (both local and foreign) to change their structure of production to produce some essential goods to avoid shortages during the lockdown,” he stated.

Mr Boampong said Ghana Grid Company Limited, Volta River Authority and Electricity Company of Ghana must ensure there was continuous supply of power since most institutions would be working from home and that tariffs should be reduced.

He said there are people who don’t even have a place to get locked inside, adding Ghana has a housing deficit of over 1.5 million. Therefore, the government must advance plans to shelter some millions of Ghanaians in hotels, motels, and guest houses among others.

“As a policy analysis organisation, we make these proposals based on a careful study of other nations which have implemented lockdowns due to COVID19. And we believe that these measures should suffice, though not completely, in helping manage the situation of a lockdown,” Mr Boampong said.