Ghana has projected its economy will grow at 5.7 percent in 2021 as government seeks to stimulate both small- and large-scale businesses with the Covid-19 Alleviation and Revitalisation Enterprises Support (CARES) programme.
The economy is projected to grow by 1.9 percent at the end of 2020 against a pre-pandemic target of 6.8 percent. Presenting the first quarter budget in Parliament, Finance Minister Ken Ofori-Atta said the GH¢100 billion Ghana CARES programme will be the main driver of economic rebound next year as government seeks to bring the economy back to its pre-pandemic status.
CARES programme first phase
The CARES programme will be carried out in two phases. The first is the stabilization phase which aims at supporting enterprises recover. These include paying outstanding obligations to contractors and suppliers; injecting liquidity into the system and ease the cash flow difficulties of businesses; developing another programme to support large business hard hit by the pandemic; and also sourcing from the pharmaceuticals and textile & garment sectors and expand procurement from local producers for its goods and services.
Other interventions in the programme are establishing a guarantee scheme of up to GH¢2 billion to enable business to borrow from banks at more affordable rates; increasing funding to the CAP-BuSS Programme being run by the National Board for Small Scale Industries (NBSSI); and providing seed-fund for a retraining programme to help workers who are laid off because of Covid-19 to develop new skills.
CARES programme second phase
The second, which is the medium-term revitalisation phase, will also include initiatives such as supporting commercial farming by complementing the Planting for Food and Jobs and the Rearing for Food and Jobs programmes; providing targeted support to enable the private sector accelerate progress in building Ghana’s light manufacturing, technology, and digital economy sectors.
The Finance Minister further said government has the intention to leverage opportunities that will come with the Africa Continental Free Trade Area (AfCFTA) agreement to grow the economy.
“I want to assure this House that we will recover, we will revitalize, and we will transform the economy. We shall pivot off the AFCFTA headquarters in Accra for Ghana to become a dynamic regional hub. We have planted the seeds for a fast-paced and more inclusive recovery. Recognising the role of capital and credit, we are certain that the cleaned-up and revitalised financial sector will support our recovery efforts and sustain growth,” he said.