The Chief Executive Officer of the Association of Ghana Industries, Mr Seth Twum Akwaboah, is calling on banks and the other financial institution to provide stimulus packages to businesses in the country. This is as a result of the covid-19 pandemic which is hitting businesses hard.
The essence of the support, he says, is to “really improve on the liquidity of companies, let’s give them the necessary support so they can produce and flood the market”.
He again added that “the system is also for survival, so if there are no loan arrangements made for companies, why not give them access or bigger loans to do the work that they have to do, we should all do so”.
As the coronavirus bites hard on the business community in the country, some financial institutions announced several packages to help cushion businesses in the country.
Fidelity Bank, for instance, has reduced lending rates on personal loans for qualifying customers to 17.5%, as part of effort to cushion and provide relief to its client in the wake of the covid-19 pandemic.
The initiative also includes a further relief option of a maximum three-month repayment holiday.
In addition to this, another package was announced to the bank’s SMEs and Corporate clients.
The packages will include loan moratoriums and loan restructuring opportunities subject to approval.
Aside from this, the Republic Bank Ghana is offering a Loan Repayment Deferment for its customers and staff for a period of six months.
This is part of effort by the bank to mitigate the economic impact of the novel Coronavirus pandemic on businesses and employees in the country.
Hencet the CEO of AGI, Mr Twum-Akwaboah, in an interview with Accra based Citi FM, said such gestures by the banks will go a long way to improve the liquidity of companies especially those providing essential services during this period.
“Under the circumstance, we encourage anything that anybody, any company, any private institution can do to help; mindful of the fact that there is a limit to what the institution can also do, because they must also operate and also feed their staff.
GH₵1b stimulus package
Meanwhile, the President has tasked the Finance Minister to seek the approval of Parliament to spend GH₵1 billion under a Coronavirus Alleviation Programme to cushion Ghanaians as government tightens measures to control the spread of the deadly coronavirus.
President Akufo-Addo says the amount will mitigate the impact of the Coronavirus on businesses and households and ensure that job losses are minimized.
“The Minister for Finance will immediately make available a minimum of GH₵1 billion to households and businesses, particularly small and medium scale enterprises,” he announced.
“commercial banks are, in addition, responding to the Bank of Ghana’s 1.5 percent decrease in the Policy Pate and 2 percent in reserve requirement with a GH₵3 billion facility, to support industry especially in the pharmaceutical, hospitality, service and manufacturing sectors”, he added.
Furthermore, the President also announced the provision of additional relief, such as extension of the tax filing date from April to June.
Again, effective April 1, 2020, there will be a two percent reduction of interest rates by banks, a six-month moratorium of principal repayments to entities in the airline and hospitality industries by the banks
“All other sector credit exposures will be reviewed on a case by case basis; mobile money users can send up to GH¢100 for free; and a 100 to 300 percent increase in the daily transaction limits for mobile money transactions”, he assured.
Ghana’s situation with Covid-19
Ghana has, so far, has recorded 152 cases, including 5 deaths and two recoveries, as the last update yesterday, March 29, 2020.
And to contain the situation in order to prevent a further spread of the virus across the country, President of the republic, His Excellence Nana Addo Danquah Akuffo-Addo, has declared a two-week partial lockdown in Accra, Tema and the Greater Kumasi Metropolis.
The lockdown starts from today, Monday, March 30, 2020.