Kosi Yankey-Ayeh
The GHS1 Billion Coronavirus Alleviation Programme (CAP) Business Support Scheme launched by His Excellency President Nana Addo Dankwa Akufo-Addo on Tuesday, 19th May, 2020 is a life saver not just for the beneficiaries but for the nation as a whole.
This Programme is unprecedented in Ghana’s history, as it accounts for about 0.15 per cent of Gross Domestic Product (GDP) and 1.22 per cent of the projected tax revenue for 2020 (Ministry of Finance and Economic Planning); 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 Enterprises (MSMEs) account for 92 per cent of businesses and contribute to about 70 per cent 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 loans, the ‘Anidasuo’ soft loans, as well as a technical assistance support component for MSMEs.
The fund is a breath of fresh air and a resurgence of hope in an uncertain time. It is the panacea this nation so desperately needs to sail through these tumultuous times…. with an initial annual interest rate of five per cent (5%), which a day after the launch of the Programme was reviewed downwards by the President, to three per cent (3%); a one-year moratorium and a repayment term of between 2-3 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 payroll when revenue has ceased, and salaries for 94,000-plus private school teachers who are out of a paycheck due to the shutdown of schools.
The hallmark of this fund is the level of thought that went into its design.
The ownership and accountability component is evident by the nominal interest rate 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 three per cent (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 GHS1 Billion relief fund is managed by National Board for Small Scale Industries (NBSSI) and administered to eligible businesses through the participating financial institutions and selected telecommunication companies.
NBSSI is a governmental 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.
NBSSI has a proven track record in delivering results through similar interventions. In the last three years, NBSSI has chalked many significant milestones such as the training of 65,000 youth, of which women accounted for 62 per cent.
This was done through innovation hubs, apprenticeship programmes, access to international export markets and providing approximately GHS70 million worth of funding.
NBSSI has also helped in establishing over 13,000 new businesses, of which 70 per cent are women-led.
They have also provided business development support to 250 enterprises (including those linked to One District, One Factory Program) with 5,000 plus workers benefitting.
Through the NBSSI Business Advisory Centres, 350,000 entrepreneurs, 73% of whom are female, have been supported with approximately GHS45 million, disbursed as loans.
Additionally, NBSSI has provided business acceleration services to 254 MSMEs through KAIZEN for productivity and quality improvement.
This is what NBSSI does on a day-to-day basis — supporting MSMEs with financial and technical resources to help them grow sustainable businesses.
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 that 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!
By Kosi Yankey-Ayeh, Executive Director, NBSSI