Introduction

The Corona Virus Disease discovered in 2019 (hence the term COVID-19), undoubtedly is testing the resilience of individuals, families, businesses and nations in responding to large scale pandemics.

The well endowed and industrialized countries have announced stimulus packages for distressed businesses and cash transfers, in some instances to aged and economically displaced persons. Families, are having to rely on their emergency funds or savings to manage (after all, in Ghana, we all typically respond I’m Managing to a How are you greeting).

The government of Ghana led by President Akufo-Addo announced the CoronaVirus Alleviation Programme (CAP), which I have named CAP-20 (since it was formulated in 2020) as a comprehensive package to among other things serve as a stimulus package, and address the social and economic effects of the deadly pandemic on Ghanaians. It is the case of the businesses whom I describe as ‘vulnerable’ that I focus my lens on and what this CAP-20 for COVID-19 portends for them (after listening with rapt attention to the President of Ghana’s 5 April 2020 televised address).

‘Vulnerable’ businesses in Ghana

The onset of the pandemic has dealt a heavy blow to more apparent businesses at the frontline of global commerce – aviation, hospitality, ground transport, and manufacturing.

My deep concern was the conspicuous silence on the micro businesses in Ghana as evidenced by policy-makers public statements (prior to the 05 April 2020 Presidential Televised address).

A case in point was the Minister of Finance’s address to Parliament on Monday 30 March 2020. Upon perusing the statement, apart from the first paragraph that highlighted some vulnerable businesses (barbers, hairdresssers, tailors) to be impacted, there was no concrete provision for them in the document.

The possible rebuttal by others to this my viewpoint would be the line in the document that used the ‘nebulous’ SME terminology to qualify the support to SMEs – but which did not explicitly mention micro businesses. I risk being labelled trivializing this since the development literature would normally use SMEs to cover the entire spectrum of private sector – a label I vehemently disagree.

For a country that has taken the steps to formulate a National Micro, Small and Medium Enterprises Policy, and adopting an official position to recognize the micro-businesses, one cannot argue his way out of SME being similar to MSME.

Perhaps, prophetically between 2018 and 2019, in leading the Association of Small-Scale Industries (ASSI) team during the policy formulation on SMEs in Ghana, I strongly insisted, including documented position papers to Ministry of Trade and Industry (SME Team), the unequivocal need to name the policy MSME instead of the SME that was proposed then. Almost all, if not all, the support mentioned in the Ken Ofori-Atta statement to Parliament was geared towards the formal economy / private sector.

The business owners in the less formal section of the private sector – i.e. artisans, own-account workers and smallholder farmers – who fall within the micro segment of MSMEs are what I term as ‘vulnerable businesses’ – were forgotten. Call them hand-to-mouth businesses and you are not far from being right. Classify them as daily wage businesses and you are spot on. Consider them as kpakpakpa (a term popularized in Ghana for fast-connection money making¬) and you would not be far from the truth. The above street-wise descriptions resonates with many who are acquainted with these classes of business I call Vulnerable. Furthermore, the business literature and policy documents (ILO Informal Economy documents; Ghana National MSME Policy; and others) would affirm that:

• 8 out of 10 such businesses are most likely not to have any form of savings, investment, insurance or emergency funds (or what nations refer to as Import Cover)

• Workers of such businesses have close to no formalized working conditions

• Suffer greatly during ‘lean or low-season’ of work when demand for their products fall drastically

• Mid-to-high family sizes and hence high family dependency rates, among others.

It is the above group who make up close to 85% of the private sector (National MSME Policy, MoTI 2019) that I speak of. Drilling further down,

 I speak of the over 220,000 hairdressers and beauticians Master Crafts-Persons (estimate from Ghana Hairdressers and Beauticians Association, National Association of Beauticians and Hairdressers, Progressive Hairdressers – these are the major trade associations for these cosmetologists);

 I speak of the over 350,000 tailors and dressmakers (estimate from Ghana National Tailors and Dressmakers Association, Ghana National Association of Garment Makers, Ghana Cooperative Fashion Designers Association – these are the major tailoring trade associations);

 I speak of the 100,000+ electronics and electrical servicing technicians belonging to their major trade associations of Ghana Electronic Servicing Technicians Association, Progressive Electronic Servicing Technicians Association of Ghana.

 I also speak of the over 90,000 auto-mechanics, sprayers, welders and auto-electricians who belong to the Ghana National Association of Garages. 

I speak of these artisans and master crafts-persons who on average have four (4) apprentices learning the trade / skill and receive daily stipends from their Masters / Madams. A simple arithmetic would bring these numbers to 3,800,000 Ghanaians [760,000 + (760,000 * 4)] whose livelihood are affected during this lockdown.

On average, each of these 3,040,000 apprentices receive daily stipend of ghc10 which amounts to Ghc30.4million. Their 760,000 Masters / Madams, who are relatively better off, also contribute an average daily ‘susu or savings’ with a micro-credit business of ghc20 totaling Ghc15.2million. Cumulatively, Ghc45.6million is the daily financial inflows of these vulnerable businesses into the national economy. Although most of these artisans work on average six (6) days in a week, using the 5-day working norm produces a total of Ghc228.0million (5 days * Ghc45.6million). One is tempted to ask whether this amount of money is reflected or captured in any official document? And I dare answer that how do you expect to capture it when these individuals do not utilize traditional banks, and even when they use the Non-Bank Financial Institutions (NBFIs), they largely prefer the respected susu-collector within the business locality!! Moreover, there is paucity of governmental data on these artisans, except for close interaction with national leadership of these bodies and a personal knowledge of the micro-enterprise sector (which is my case as a serial micro-business entrepreneur and having served in one of the highest positions within the fraternity).

So, can you help me calculate the total cost or loss to this conservatively estimated 3.8 million Ghanaians who are artisans (both Master Crafts-Persons and Apprentices) during the 2-week lockdown period as announced by Government? Could you further calculate the financial impact on the family dependents of these individuals using an average family dependency of 1:4 persons?

Enter CAP-20

The Government of Ghana has received plaudits for introducing the CoronaVirus Alleviation Programme, CAP-20 (kindly attribute this term rightfully to me 😊 ). What was considered to be belated by a section of the public, a view to which they are entitled, I rather find timely with much substance to chew on after the President’s 5th April televised address to Ghanaians. The prelude to this detail, as given by the Minister of Finance in his statement to Parliament, as an MSE Consultant, was rather disappointing relative to the needs and interests of micro-enterprises. Thankfully, there was restitution with the new information provided by the President, Nana Akufo-Addo. It is this Enhanced CAP-20 that I carefully analyzed and reviewed that forms the basis of my critique and suggestions.

Is CAP-20 a progressive development? The answer is yes. The ghc600million dedicated funds for trade associations / artisans to be deployed through the National Board for Small Scale Industries (NBSSI) – which is more vibrant now thanks to the current Management – and in partnership with the trade associations is very positive.

Is CAP-20 adequate and proportionate to the estimated impact on micro-enterprises? The answer is no, albeit a welcoming news. This is not because of the Oliver Twist-mentality most institutions or individuals would be accustomed to when goodies are given them. The answer is borne chiefly out of two reasons:

a. The 2-week lockdown financial loss to master crafts-persons and their apprentices as calculated previously which is to the tune of ghc456million almost consumes the ghc600million devoted amount. Should the lockdown be extended by additional 2-weeks, your guess is as good as mine!!! Any lockdown beyond a period of 6 weeks may be worse than catastrophic.

b. More substantively, this group of the private sector, by this pandemic would be suffering what I term a double jeopardy in less than 7 years!! The first tragedy was the 3-year power crises between 2013-2016 which was nationwide and affected most businesses. As vulnerable then as they were, and still now, these micro-businesses did not receive any government-driven stimulus package. What was heard and read in the news and from public officials was the impact on the medium-to-large size companies and how hundreds of staff layoff was adding to the unemployment figures. The industrial sewing machines of many-a-tailor was destroyed (some of whom had acquired it on a work-and-pay scheme of some of the associations). For the hairdressers, their cry of damaged standing hair dryers was persistent in my ear as I belonged to the leadership of trade associations. The few who could afford the step-up and down devices to regulate power fluctuations during the moments the lights ‘SOR’ were safe. The costs / economic loss of the power crises to these artisans in the informal economy may at best had been financially officially calculated (yet to read any literature on that though), but if the global financial crises of 2007-2008 and its effects over a protracted length of time provided any lessons, we can say many of these businesses are yet to return to normalcy! Yes, the President’s globally acclaimed statement of knowing how to bring the economy back to life still rings a bell in my ears, however the reality check is that the Government of Ghana did little to help bring back to life the many micro-businesses who suffered the first jeopardy – to wit the power-crises.

Is this CAP-20 provision for micro-business helping deal with this second jeopardy? The answer is that it may help albeit scratches the surface. The 1-year loan moratorium is good and the 2-year repayment period even better. However, a 3-year repayment would have provided additional respite. This would have been the fine opportunity for the state to make amends and atone for its neglect of the micro-businesses when they suffered the first jeopardy – power crises. Why do I advocate for this extended period? It is trite knowledge that in dire periods, the most vulnerable and marginalized groups suffer disproportionately the negative of these times. Am I therefore arguing that the micro-businesses represent this category within the private sector? Absolutely YES! Time to show that the state cares, and sow the seeds for strengthening the state’s future efforts and hand towards ‘coercing and coaxing’ them into its formalizing the Informal Economy guiding document (another document I was privileged to be part of its development). When you are my partner and friend in trying times, I become loyal and entangled with the ‘cords of love’ shown. This is what the state must strategically aim at.

Pathways to Maximizing the Gains from CAP-20

Although I have articulated explicitly that the ghc600 million provision is inadequate yet welcoming, and disproportionate yet assuaging, half a loaf is better than none. CAP-20 for COVID-19 (half a loaf) is better than ‘Nothing-nothing for Power-Crises 3 Years’ from the state. In fashioning out the modalities for the operationalizing of this support to micro-businesses within the private sector, I recommend the following:

  On the operational side:

a. Ensure that political apparatchiks and politically-exposed-persons do not lead the process for the design and roll-out of this intended support to micro-businesses in Ghana. As the call for all hands on deck by the President, this is not the time to tag these businesses as belonging to Party A or B. let each receive his or her of the national cake – especially to the many who feel left out of this ‘mysterious’ cake they have never sighted!

b. Like my friends in the Special Abilities community say, ‘nothing about disability without them’, so must this support to the micro businesses be rolled out. Involve the national leadership of the many trade associations I have named above, as well as the Association of Small-Scale Industries (ASSI) which is the recognized umbrella body for these groups as evidenced by the membership in the Private Enterprise Federation. Constitute a Working Group for Trade Associations CAP-20 Support with clear terms of reference. National executives of these associations who would serve on this working group should see their time and service as voluntary and not expect any per diems, except their transport to meetings.

c. NBSSI should ensure and request proof of downward consultations with regional leaderships of the trade associations whose national executive would be at the decision-making table. Many a time, some of the association leaders misconstrue their representative function as elected dictators and may skew this support towards their favorite ‘constituencies’ within the association.

d. Publish list of beneficiary micro-businesses and circulate widely for greater transparency, accountability and fairness. Online channels and national dailies would be very helpful in this regard.

On the technical side:

e.  Avoid the temptation of making this support appear as a cash transfer program for the micro-businesses. Having alluded to the many street-wise descriptions of such businesses including hand-to-mouth, it can end up serving as the social protection funds these businesses never had and feed into apprentice stipends payment as well as master crafts-persons piggy-bank for domestic expenses payment.

f. Distribute the funds through registered and accredited Non-Bank Financial Institutions (NBFIs), especially the ones that passed recent scrutiny by Financial Sector regulatory bodies, for onward provision to these businesses. In so doing, it provides the much-needed liquidity for these NBFIs who already suffered a dip in public confidence owing to the recent history. Thereby helping to positively re-engineer increased confidence in the micro-credit sector with whom many of these artisans prefer to transact business with.

g. Alternatively, use this fund injection to micro-businesses as a tool to trigger the strengthening of existing trade associations-developed financial inclusion tools for their members. In so doing, the state support would result in making these trade associations attractive to other micro-businesses who do not belong to any of these trade associations. Some of these bodies, such as GHABA in Ashanti Region, are able to mobilize funds among its members (during my last visit in July 2019, they could collect on average ghc14,000 every 2 weeks) and on-lend for business improvement, using the Nnoboa system. The Association of Small-Scale Industries also has in partnership with NALO Solutions (an Accra-based IT firm led by young people) developed a FinTech product using a USSD service (*920*33#) for its members. In this digitalization agenda of Government and promoting a cash-lite society, this mechanism can be explored to deploy this support as well.

h.            Some of the trade associations services would be severely tested even as pandemics spread through human contacts would not disappear forever and also as modernization grows. In this respect, artisans in the cosmetology (hairdressers, barbers) sector ought to be supported with strategic business development services at this time to help them develop alternative or differentiated services. Is it time to direct them towards producing local hair wigs with different pre-molded styles and cut down the huge importation of same so the ladies can self-style and wear at home without the hairdresser? Is it time to direct them towards expanding the production of locally-made hair creams and products to meet the domestic market and even export (given that more and more people are opting for natural hair and self-styling)? Again, for tailors and dressmakers, is it not time to use this pandemic-opportunity to direct them towards Remote Tailoring which produces ready-made wears and delivery to customer doorstep? Even as local manufacture of PPEs is underway, are individual tailors and dressmakers benefitting from it in anyway?

i.  When the Nation Builders’ Corps (NABCO) was initiated, I saw it as an important avenue to use it as a catalyst to rope a lot of informal businesses into the tax net – whose widening has been a cliché in our national budgets since I became literate! Alas, it was almost a lost opportunity in this regard given the module addressing the private sector. The missing element is what I suggest here (which I have had the opportunity of explaining to NABCO CEO in a 2019 meeting in Sunyani). The business literature tells you a lot of challenges faced by micro-businesses: including not keeping proper books of accounts with its many effects. The NBSSI has done well to provide some of these trainings. However, when my tailor friend Stephen Akumanin of Kurves and Stitches in GICEL Estates, Weija wakes up each morning and gets to work, his preoccupation is what designs he can come up with and not applying the book-keeping training received. Same with my hairdresser friend Holysat Anane of Holysat Beauty Salon in Kumasi. Their business technical side is what matters most to them, which is borne out of the apprenticeship training focus of those years’ past. Deploy accounting and marketing graduates in the NABCO programme to these artisans during this CAP-20 financial support to take care of their book-keeping and marketing needs (a task that these businesses on their own would not and also not willing to pay for). While these NABCO personnel undertake these services, their KPIs would include assisting and facilitating the micro-business owner’s registration with SSNIT, Registrar-General (which comes with a TIN), apprentices’ registration onto SSNIT and GRA. These businesses should enjoy 3-year tax break or holiday effective the year they complete these formal processes and see the number of businesses and persons within the informal economy who would be roped into the tax net and pinned within the database to their business occupation. Furthermore, the good returns on the book-keeping and marketing services of the NABCO personnel would start showing when financial institutions start approaching and offering these micro-businesses affordable credit since they are showing positive cash flows. The potential growth in customer demand for services arising from the marketing work of the NABCO personnel can change the business fortunes within the medium term, and possibly serve as basis for the micro-business owner to want to consider engaging fully the services of the NABCO personnel. This provides a critical pathway of sustainability for the NABCO programme since after 3 years, the personnel are to exit the ultimately exit. Hoping they would have found jobs in the private sector is not good enough. Supporting micro-businesses to grow and expand through the accounting and marketing services provided by these NABCO personnel deployed during this CAP-20 financial support would be a gamechanger!!

We can move Ghana Beyond Aid!! We have to be strategic in the deployment of national resources designed through programme interventions such as CAP-20 for COVID-19 and complemented by packages including NABCO.