The Coronavirus pandemic (COVID-19) is a global health and societal emergency that requires effective and immediate action by governments all over the world. Trade, investment growth, and employment have all been affected and governments are implementing various fiscal measures to mitigate the adverse effects and provide relief for businesses.
To cushion the economic hit caused by this pandemic, the Government of Ghana rolled out a series of policies and measures to shore up the confidence of businesses and ease some of their burdens. Here are some of the consolidated and updated lists of Government of Ghana’s policies/measures towards mitigating the impact of COVID-19 on businesses in Ghana so far.
GHC1.2 BILLION STIMULUS PACKAGE FOR 180,000 BUSINESSES TO BOOST OPERATIONS.
President Nana Addo Dankwa Akufo-Addo launched a GH¢1.2 billion Coronavirus Alleviation Business Support Programme to support Micro, Small and Medium Enterprises (MSMEs) affected by the coronavirus (COVID-19) pandemic.
The amount is expected to support businesses in areas such as agriculture and agribusiness, manufacturing, tourism and hospitality, education, food and beverages, technology, transportation, commerce, healthcare and pharmaceuticals, and textile and garments. The business support programme is expected to help minimize job losses in the wake of the outbreak of the COVID-19 pandemic.
Out of GH¢1.2 billion earmarked for the programme, GH¢600 will be disbursed as soft loans to MSMEs with one-year moratorium and two years repayment at an interest rate of 3 percent per-anum
Furthermore, the selected participating banks will provide negotiated counterpart funding to the tune of GH¢ 400 million. The scheme is expected to reach 180,000 beneficiaries across the country.
WAIVER ON WATER AND ELECTRICITY
President Nana Addo Dankwa Akufo-Addo in a broadcast, announced that government would fully cover the bills of low-income consumers of electricity in the country for the months of April, May and June 2020.
The remaining consumers who were outside of this category enjoyed a 50 percent reduction in the cost of electricity for the same period. In the same broadcast, the president also announced that his government would also cover the water bills for all Ghanaians for the same months of April, May and June 2020.
“We have decided further measure of mitigation for Ghanaians for the next three months… Government will fully absorb electricity bills for the poorest of the poor, i.e. lifeline consumers. This covered persons who consume 0 to 50-kilowatt hours per month for the announced period. This forms part of relief interventions by the state amid the novel coronavirus pandemic. Other categories of consumers will enjoy a 50 percent discount within the same period. For all other consumers, residential and commercial, the government will absorb 50 percent of your electricity bill for this period using your March 2020 bill as the benchmark,” President Nana Akufo-Addo stated.
MINISTRY OF TRANSPORT INTERVENTION
The Ministry of Transport on April 17, 2020 directed the Ghana Ports and Harbors Authority to suspend charges on all cargo i.e. demurrage/detention and storage rent which have remained uncleared since or during the lockdown period only. This was to ensure that shippers and other stakeholders do not take actions that may jeopardize Government’s efforts at curbing the spread of the virus on the basis of averting the accumulation of costs in the clearance of cargoes.
BANK OF GHANA (BOG) INTERVENTIONS
The Bank of Ghana (BoG) slashed its key policy rate by 150 basis points to 14.50%. The Bank’s move, which brought the rate to the lowest point since May 2012, was aimed at minimizing the economic impact of the COVID-19 pandemic as well as ease the pressure on inflation.
The unexpected easing in monetary policy was chiefly prompted by rising fears that the global economy may be pushed into recessionary territory this year, thus severely curbing Ghanaian GDP growth.
The decision was further supported by cooling domestic activity growth and subdued inflationary pressures in recent months. Moreover, the Bank deployed additional measures including lowering reserve requirements for commercial banks from 10.00% to 8.50% and that of capital conservation buffer for lenders from 3.00% to 1.50% in order to improve liquidity.
The Bank of Ghana decided to decrease the cost of fund transfers through mobile money, in order to avoid a dip in transactions, thus mobile money transfers below GH100 (USD18) was not charged by service suppliers for three months.
GHANA REVENUE AUTHORITY (GRA) INTERVENTIONS
Health workers are subject to the income tax regime in Ghana. However, to provide compensation for additional risks, the employment income of health workers for the months of April to June 2020 was exempted from income tax. The tax holiday was extended by three more months to include July, August and September by President Nana Akufo-Addo.
Additionally, income tax of 15 percent on withdrawals of non-qualifying accrued benefits under a third tier (statutory pension/provident fund) scheme was waived for withdrawals made by employees who lost their permanent employment and self-employed persons who lost their capital.
The deadline for filing annual income tax returns was extended by two months. As a result, June 30, 2020 (and not April 30, 2020) was dedicated as new filing deadline for the 2019 income tax returns for individuals and partnerships and the 2019 Annual P.A.Y.E. Deductions return filed by employers.
Companies and trusts were given six months, instead of four, after the end of their financial year to file their income tax returns. VAT charged by a donor and paid on goods contributed in support of efforts against COVID-19 was waived due to the approval of such taxable donations by Parliament as emergency relief items under the VAT laws.
REGISTRAR-GENERAL’S DEPARTMENT (RGD) INTERVENTIONS
The Registrar-General’s Department extended the deadline for filing annual company returns and renewal of partnerships from July 31 to December 31, 2020. The Department further canceled announced penalty for late annual filing for all businesses.
GHANA STOCK EXCHANGE (GSE) INTERVENTIONS
The Ghana Stock Exchange granted permission to companies for the extension of time to submit their audited Financial Statements for the year ended December 31, 2019.
SECURITIES AND EXCHANGE COMMISSION (SEC) INTERVENTIONS
The SEC directed its clients to file all statutory returns online. It further encouraged Fund Managers to adhere to redemption requests as stipulated in contracts with investors. In the unlikely event of a breach, Investors are encouraged to file complaints with the SEC via the SEC’s toll-free number, email address or the website.
CONCLUSION
Ghana, just like other nations across the world has been hit hard by the COVID-19 pandemic. The Coronavirus Alleviation Programme and other fiscal measures implemented by the government through the various agencies are to mitigate the immediate adverse effect of the pandemic and provide relief for businesses and households.
These measures, as stated by the President during the launch of the Programme, forms part of the many initiatives by Government upon which businesses and the Ghanaian economy are expected to recover and set on the path of growth. Policies and interventions by government have been carefully designed to address disruptions in business activities and protect jobs.
On the positive side, the COVID-19 pandemic has shown that Ghana has the capacity to produce most of the goods and services that would otherwise have been imported. This ties in with government’s agenda to accelerate industrialization and local production to spur job creation and improve livelihoods. It is crucial that businesses are positioned to take advantage of the new opportunities that have risen from the crisis.
Source: GIPC