Economist, Dr. Lord Mensah, is urging government to direct its incentives aimed at mitigating the impact of the COVID-19 on businesses to critical sectors of the economy such as agro processing.
He cautioned that even though players in the hospitality and tourism industry are asking for support, injecting funds into those areas may not yield immediate results.
President Akufo-Addo on Friday directed the Finance Minister to make available a one billion cedis stimulus package to support businesses.
But Dr. Mensah told Citi Business News government must critically assess which businesses to support.
He argued that even though he is not against the hospitality industry, there is the need to quickly revive areas that have seen the biggest shocks in order for the ripple effect to be felt in other areas.
“There are some areas that even if you give them the subsidies or some sectors that even if you give them the subsidies, they won’t get patronage as we speak now… now we are distressed as a country and areas like hospitality, hotels are not key sectors to touch now when it comes to providing stimulus package”.
Dr. Mensah is of the view that the stimulus package may come in tax cuts or subsidies to help lessen the pressure on businesses.
“You can provide tax cuts and at the same time subsidies. Provide incentives to areas and possibly that is where the one billion will go. And providing funds does not mean you have to go direct by putting money into people’s pockets. We have to be careful how we go about this,” he stressed.
He explained that providing a stimulus package is in itself an incentive that must engineer economic growth to cover for losses or support the vulnerable hence it must be approached with tact.
“If you provide stimulus package for these sectors who are those going to patronize it. It’s a problem for people to go to the public and have entertainment and all that in this time,” he said suggesting that that some measures can be put in place for players in the hospitality industry in the near future.