An Economist, Dr Lord Mensah, is urging government not to extend stimulus package to the Hospitality and Tourism sectors of the economy as at now.
According to him even though those sectors are also important to the growth of the economy, injecting funds into them may not yield immediate results.
“There are some sectors that even if you give them the subsidies, they won’t get patronage as we speak now.
“Now, we are distressed as a country and areas like hospitality, hotels are not key sectors to touch now when it comes to providing stimulus package”, he stressed.
Dr Mensah made these remarks in an interview with Accra based Citi FM, which was monitored by the Ghana Talks Business.
Support only the critical areas
Rather, Dr Mensah, is advising government to direct the stimulus packages to the critical sectors of the economy such as agro processing.
He argues that stimulus packages ought be an incentive that bring about economic growth to support the vulnerable in society and businesses, hence needs to be approached with tact.
He said, he is not against the hospitality industry. There is, however, the need to quickly resuscitate those sectors of the economy that are hit most in order to lessen their losses.
“If you provide stimulus package for these sectors who are those going to patronize it. It’s a problem for people to go to the public and have entertainment and all that in this time,” he said, suggesting that some measures can be put in place for players in the hospitality industry in the near future.
The support packages, he explained, may come in the form of subsidies, tax waivers and tax cuts.
“You can provide tax cuts and at the same time subsidies. Provide incentives to areas and possibly that is where the one billion will go. And providing funds does not mean you have to go direct by putting money into people’s pockets. We have to be careful how we go about this,” he stressed.
GH₵1b stimulus package
On Friday, March 27, 2020, President Akufo-Addo directed the Finance Minister, Mr Ken Ofori-Atta, to make available a one billion cedis stimulus package to cushion businesses in the country.
The package, the President believes, will mitigate the impact of the Coronavirus on businesses and households and ensure that job losses are minimized.
“The Minister for Finance…will, then, immediately make available a minimum of one billion cedis (GH¢1 billion) to households and businesses, particularly small and medium scale enterprises,” President Akufo-Addo announced.
“commercial banks are, in addition, responding to the Bank of Ghana’s 1.5% decrease in the Policy Pate and 2% 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 one hundred cedis (GH¢100) for free; and a one hundred percent (100%) to three hundred percent (300%) increase in the daily transaction limits for mobile money transactions”, he assured.
Ghana’s recorded cases
Ghana’s cases currently stand at 195 and this include 5 deaths, 3 recoveries, 18 patients discharged to go on home management, 80 patients responding well to treatment, this is according to the latest update as at 8 am, today, Wednesday, April 1, 2020.
By Salifu B.B. Moro
