Stimulus packages to businesses should come later – Economist to government

Professor William Baah-Boateng, the Head of the Economics Department at the University of Ghana, has advised the government to be measured in its support to businesses in the wake of the novel coronavirus pandemic.

“The implementation of the stimulus package should not be at a time that we are trying to solve the problem because now we have asked all of us to halt economic activity,” he said on The Big Issue.

He argued that: “If you begin to give out stimulus packages now, people are going to use that money to do other things.”

Instead, Prof. Baah-Boateng suggested that government should try to be strategic in its support to businesses when the time comes.

“So I expect that if we are going to give out stimulus packages, we just use this [lockdown] time to plan to find out how we can get it to those people who need them.”

He is worried that disbursing stimulus packages at this time will be done without any recourse to data.

“Many-a-time, we use our observations to do things and implement policies… because we didn’t plan. The distribution of food and even distributing our cooked food has brought problems.”

A health economist, Dr. Gordon Abeka-Nkrumah, also stressed the need for an analytics-based approach to supporting businesses because the effect of the pandemics will vary across sectors.

Speaking on The Bigg Issue, he said: “we need to now begin to gather data right now and begin to categorise all these organisations and know how we implement the stimulus.”

He suggested the support be dolled out on the basis of “growth potential in terms of employment and in terms of GDP and allocate them in that way so we can come out as quickly as possible.”

The cumulative effect of the novel coronavirus pandemic will cost Ghana GHS9.505 billion.

Parliament’s has given the Minister of Finance the green light to spend from the GHS 1.2 billion Contingency Fund.

Parliament also approved a $1 billion IMF Rapid Credit Facility to mitigate the impact of the pandemic on Ghana’s economy.

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