Saturday, 28 March 2020

Coronavirus Alleviation Program (CAP): The Applause and Questions


John Gatsi | Home | Goldstreet Business

By: Prof. John Gatsi 

Restrictions on movement of people affect livelihoods. Reduction in hardships, protection of economic activities and  general support for the vulnerable have been the issues for which Ghanaians were calling on the President and the government to consider a package that may address these concerns to make a lockdown limit the transmission of the Coronavirus.

The President, in response to these calls that have been made by Ghanaians for almost a week, finally announced in his late-night address the establishment of the CAP to address economic disruptions to businesses and households, hardships, and job losses occasioned by the pandemic and the measures to contain it.

Ghanaians appreciate the president's response to the calls they have made in recent days. The announcement, however, should be clarified further.

The details of the CAP and its application are not known as it must first be presented to and approved by parliament. As a result, the total amount of money being requested by the Finance Minister to establish the CAP is not known. The subtotal for the support of households, businesses and the modalities to access are not known.

The creation of the CAP is very easy and welcome news but managing it in a transparent and satisfactory manner to demonstrate equity and fairness is the main task. The next consideration is that the CAP is just a name until funds are raised to make it work. We recall the earlier announcement, about two weeks ago, in which the President indicated that at his prompting, the Minister in Charge of Finance was to release the cedi equivalent of $100M, a week later the minister said that money was not available.

Given that the equivalence of the earlier $100M partly being sought from the IMF is lower than the minimum GhC1.0 Billion to be made available immediately by the Finance Minister  under the CAP vehicle, some explanation is needed as to the source of this money. 

Also, the Finance Minister cannot release this money even if it is available because the line of disbursement and its appropriateness, bearing in mind qualifications to benefit, must be satisfactory to parliament. 

It may therefore take sometime for a concrete fundraising and disbursement in line with approved criteria. It is, however, to switch funds approved in the budget.

The president has shown leadership by contributing all of his salary for three months into the Coronavirus Management Fund but Ghanaians do not know what his numerous appointees are to contribute. It is important for appointees to also contribute portions of their salaries to the fund. It has been done before. We will appreciate if it is even 3% of their salaries are sacrificed for the next  three months.

Banks are to be appreciated for accepting to sacrifice to defer repayment of loans for 6months but must explain if the 2% interest rate cut is affecting existing loans or new loans only.

Beyond all the fiscal and monetary measures at the macro and micro levels of our society, there is the need to encourage forbearance among people. Pay those you owe if you have the money, give to support if you can, accommodate your tenants if you are a landlord and above all do not take undue advantage of people during the period. After all, Coronavirus has taught us that a strong and progressive society is built when we appreciate the value, needs and supplies of one another.

This is the time to enjoy continuous power supply and electricity rebate because power consumption will naturally increase for average households. This is the time disruption to water supply should be minimal. This is the time sanitation service providers under the private sector and Ministry in charge of sanitation must be efficient as more waste will be generated in many homes. 

Above all, this is the time telecommunication service providers and data services providers should provide rebate for users and provide more efficient services across the country.


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