Ghana can dream again – Coronavirus Alleviation Programme Business Support Scheme a win-win for all

The GHC1 billion Coronavirus Alleviation Programme (CAP) Business Support Scheme, launched by His Excellency Nana Addo Dankwa Akufo-Addo on Tuesday 19 May 2020, is a life saver not only for the direct beneficiaries but for the nation as a whole.

This programme is unprecedented in Ghana’s history, as it accounts for about 0.15% of GDP and 1.22% of the projected tax revenue for 2020 (Ministry of Finance and Economic Planning). It is oxygen for a nation gasping for breath from a coronavirus pandemic that has hit the world hard and brought global economies to a standstill.

In Ghana, micro, small and medium-scale enterprises (MSMEs) account for 92% of businesses and contribute roughly 70% of gross domestic product (ISSER, University of Ghana, 2015). Undoubtedly, MSMEs are the pulse of the Ghanaian economy. It is these businesses that keep the lights on in Ghana.

CAP BuSS offers the “Adom” micro loan, the “Anidasuo” soft loan, as well as a technical assistance support component for MSMEs. The fund is a breath of fresh air and a resurgence of hope in uncertain times. It is the panacea this nation so desperately needs to sail through these tumultuous times … with an initial annual interest rate of 5%, which a day after the launch of the programme was reviewed downwards by President Akufo-Addo to 3%; a one-year moratorium and a repayment term of between two and three years.

It is fuel for the trucks that can no longer deliver goods; capital for the tomato seller who lost her earnings during lockdown; capital injection to meet the payroll when revenue has ceased; and salaries for 94,000-plus private school teachers who are out of a paycheque because of the shutdown of schools.

Thoughtful design

The hallmark of this fund is the level of thought that went into its design. The ownership and accountability component is evident in the nominal interest rate (3%) to preserve the dignity and independence of all and to allow Ghana to dream again. Maa Akos the cloth trader will have no reservations applying for this loan because she knows it has to be paid back.

Taking a loan to run her business is not unfamiliar to her. What sets this loan apart is the 3% interest rate, which is unusual in this climate. Maa Akos has been in business for a while, is self-sufficient and does not want handouts. It is a win-win for her and our country.

The GHC1 billion relief fund is managed by the National Board for Small-Scale Industries (NBSSI) and administered to eligible businesses through the participating financial institutions and selected telecommunications companies.

Successful interventions

The NBSSI is a government agency under the Ministry of Trade and Industry, mandated by Act 343 of 1981 to strengthen and grow MSMEs in Ghana. With a footprint in 178 districts across the nation, it is well positioned to execute the task at hand.

It has a proven track record in delivering results through similar interventions. In the past three years, the NBSSI has chalked up many significant milestones, such as training 65,000 youth, 62% of whom were young women. This was done through innovation hubs, apprenticeship programmes and access to international export markets, and by providing approximately GHC70 million worth of funding.

The NBSSI has also helped to establish over 13,000 new businesses, 70% of which are women-led. It has also provided business development support to 250 enterprises (including those linked to the One District, One Factory programme) with 5,000-plus workers benefiting.

Through the NBSSI Business Advisory Centres, 350,000 entrepreneurs, 73% of whom are female, have been supported with approximately GHC45 million, disbursed as loans. The NBSSI has also provided business acceleration services to 254 MSMEs through KAIZEN for productivity and quality improvement.

This is what the NBSSI does on a day-to-day basis – supporting MSMEs with financial and technical resources to help them grow sustainable businesses. The NBSSI will leverage its relationship with MSMEs to ensure that funds received are used for their intended purpose and ensure that all efforts are made to repay loans according to the favourable repayment terms.

The hope is that this fund will benefit as many eligible businesses as possible, to ensure their survival, as well as that of households which depended on such businesses. There is no doubt that this relief programme is timely and most welcome.

Anidasuo no aba and Ghana will dream again. Hope now! Hope for MSMEs! Hope for all!