Economist at the University of Ghana, Prof. Godfred Bokpin has urged government to use the GHC1bn COVID-19 Fund to lessen the economic burden on businesses and households, for the extremely vulnerable people in the country.
Speaking on Joy News’ analysis programme, Newsfile, Prof. Bokpin said government must prioritise the extremely vulnerable people in the country because they are the most affected in this crisis.
According to him, the vulnerable people live by hand to mouth and it would be difficult for them to cope once the lockdown takes effect.
He opined that compliance and enforcement of the president’s directive will be problematic if government doesn’t use the Coronavirus Alleviation Programme to cater for the needy because they will be tempted to step out to work to survive.
President Akufo-Addo in his fourth address to the nation on Friday night announced that a COVID-19 Fund has been set up to lessen the economic burden on businesses and households due to the outbreak of the novel coronavirus in the country.
“We are aware that there will be discomfort and difficulties for all of us over the next couple of weeks. As a responsive government, we will continue to implement bold measures to mitigate the impact of the coronavirus on businesses and households and ensure that job losses are minimised.
“The Minister of Finance has been directed by me, to prepare, for approval by Parliament, a Coronavirus Alleviation Programme to address the disruption in economic activities, the hardship of our people, and to rescue and revitalise our industries. He will, then, immediately make available a minimum of one billion cedis (GHS1 billion) to households and businesses, particularly small and medium scale enterprises.
Reacting to the president’s address, Prof. Bokpin said “When you do a lockdown, who are more exposed in this instance? Whose economic flow or activities would be destroyed the more? I think they are the vulnerable. But I believe that we need to do something that takes greater hope to the vulnerable because in this time they are more exposed, they have no shock absorbers and that is where compliance may be difficult and enforcement of the directive may be a bit problematic. Because it doesn’t have to get to the point where we would then come to the conclusion that when I stay in my room I’m going to die, when I go out I’m going to die; they’re certainly going to make a decision. So I understand the difficulties we find ourselves in. That’s why I said let’s prioritise the extremely vulnerable.”
Moreover, he said government’s GHC1bn fund is too small and doesn’t qualify as a stimulus package, hence the reason it should focus on only the vulnerable and not businesses.
Referring to what the US did by injecting two trillion dollars, several times Ghana’s GDP, Prof. Bokpin said that it is not even enough looking at the pandemic we’re fighting.
“This is a little bit too much for us a country from the financial point of view. Barely two months into the implementation of the 2020 budget, the assumptions are no longer valid and it’s just because of one virus. In this time, regardless of whatever stimulus package, whatever monetary policy intervention all over the world, they are not considered as enough and for that matter what Ghana just announced really cannot be said to be enough,” he said.
“I’m not too sure at this stage we can call it a stimulus because it’s very very small and small to maybe our big struggle that we have and all that. I believe that the full determination is going to come out when the Finance Minister is done with the Coronavirus Alleviation Programme, then we get to see the details of what government wants to do. But baseline, what perhaps we can work with now, I don’t know when it’s going to be available actually, is the 1bn cedis government has announced and my hope and prayer is that we will prioritise households and individuals who are more vulnerable. The kayayes and all those who are more vulnerable with practically no shock absorbers. Industries are complaining but perhaps they have some shock absorbers,” he added.