Businesses need massive stimulus package – TUC
Dr Kwabena Nyarko Otoo, the Director of Labour Research and Policy Institute, Trades Union Congress (TUC), has called on government to develop a comprehensive stimulus package for businesses and workers.
He said the package would enable businesses, small and large, to stay afloat and maintain their workforce in these difficult periods.
Dr Otoo said enterprises that accessed the package must sign an undertaking to keep their employees on the payroll for an agreed period.
“This is the only way we can sufficiently boost consumption, investment, and export to revamp the economy, restore growth to about seven per cent and fulfil the Ghana Beyond Aid Agenda.”
The Ghana Beyond Aid Agenda is built around three pillars; self-reliance, economic transformation, and attitudinal change and respect for traditional values and ethics.
Presenting a report of a preliminary assessment of the economic and social impact of COVID-19 on businesses and workers in Ghana by the TUC, Dr Otoo said with that approach, government would be directly supporting workers and their families through their employers.
Dr Otoo said the report was based on information gathered by trade unions operating in various sectors of the economy, including the informal sector.
“This approach is not different from wage subsidy schemes aimed at preventing mass redundancies implemented in other countries,” he said.
He said the interventions put in place for businesses by government were not sufficient to revamp the economy towards Ghana Beyond Aid.
He said without comprehensive stimulus package the economic and social costs of the pandemic would be immense and long lasting.
The TUC expected the stimulus package to match the magnitude of the projected decline in the Gross Domestic Product (GDP), Dr Otoo said.
“GDP growth is expected to decline from 6.8 to 1.5 per cent in 2020. This translates into output loss of over GHc18 billion (US$3.1 billion).”
“Therefore, we expect government to inject at least US$3.1 billion or GHc18 billion into the economy between now and December, 2020”.
Dr Otoo said a decline in GDP was already manifesting in job losses and livelihoods in both the formal and informal sectors of the economy.
He said employers in the formal sector were not announcing mass layoffs but reports from unions, especially those in the private sector, suggest that unionized and non-unionized workers were losing jobs.
“Part-time employees and casual workers are the most vulnerable,” he said.
“Employers that had kept their workers are struggling to pay them, therefore, they are likely to terminate the appointment of many more workers if the pandemic persists.”
Dr Otoo said the TUC associated itself fully with the recommendations by the Ghana Employers Association that government should quickly develop and implement a comprehensive Economic Response Strategy.
“The TUC also recommends Workers Compensation Insurance Schemes in preparation for future pandemics as well as social grants for poor house-holds, equivalent to GHc140.00 per month.”
He said TUC expected government to relax the relevant laws to enable the Bank of Ghana to provide the necessary financial backing to the state.
He advised that Ghana must take advantage of the opportunities offered by the pandemic to review her trade policies to either ban or restrict the importation of certain commodities and support domestic private sector with funds from the proposed stimulus package to produce them locally.
“With these and other complementary policy initiatives, Ghana will recover quickly from the effects of the pandemic and return to the pre-Covid-19 growth,” he said.