GUTA Calls on BoG to Compel Financial Institutions to Waive Loan Repayments for Six Months

The Ghana Union Traders Association (GUTA) has called on the Bank of Ghana (BoG) to force all financial institutions to waive loan repayments for businesses as directed by the government.

It can be recalled that on Monday, March 30 2020, the Finance Minister, Ken Ofori-Atta, announced in Parliament some fiscal measures taken by the government to mitigate the impact of the coronavirus pandemic.

Some of these measures include; granting of a six-month moratorium on principal repayments for selected businesses and reduction of interest rates priced-off the Ghana reference Rate (GPR) by 200 basis points (2% per annum).

In a statement signed by the president of the association, Dr. Joseph Obeng, the BoG must ensure that all financial institutions comply with the directive.

“Without necessarily spelling out the details of the measures, we like to single out the granting of principal repayments for selected businesses. We believe BoG should have that stronger oversight to ensure that all financial institutions will implement this directive for all businesses to bring the needed relief to all distressed businesses at this time. GUTA, however, notes the timely presentation of this statement to parliament,” a statement from the association indicated.

The statement further said: “It is very important that at this time of our lives as a people, every effort should be made to ensure that the negative impact on especially, our businesses, can be reduced through the human approach by our revenue authorities, Bank of Ghana, landlords, financial institutions and above all the government.”

GUTA, however, lauded the government for their measures taken to lessen the impact of the pandemic on businesses.

“GUTA will like to laud the efforts and the bold stand of H.E the President of Ghana Nana Addo Danquah Akufo Addo and the Government in their fight to ensure that the impact on businesses is lessened. But while doing so, GUTA will also want to advise government to have the members of GUTA and the trading private sector in mind, majority who are in the small and meduim sectors, in any stimilus package to help reduce the huge losses they will and are incurring as a result of this pandemic. GUTA will like to take this opportunity once again to laud the effort of Republic bank for their directives to help clients who have taken some loans from them and also advise all banks and financial institutions to emulate this shinning example,” the group said in a statement

Meanwhile, the association has told the government to pay particular attention to small and medium scale enterprises (SMEs) in the stimulus package for Ghanaian businesses over the effect of the coronavirus outbreak.

Why does GUTA wants Gov’t to pay keen attention to SMEs?

The International Trade Centre and the Association of Ghana Industries (AGI) in a 2016 report indicated that Small and medium-sized enterprises (SMEs) are the backbone of the Ghanaian economy – they represent about 85% of businesses, largely within the private sector, and contribute about 70% of Ghana’s gross domestic product (GDP).

They are an integral part of the Ghanaian economy, and they tend to employ vulnerable groups, including women, youth and low-skilled workers. As SMEs often operate in labour intensive, low valued-added sectors, wages tend to be low.

In view of this, if the government does not consider a stimulus package for SMEs in this dire times, Ghana’s GDP may be grossly affected and trickle down to our economy at large.