Home Business Unpaid GH₵15 billion Debt Severely Affects Contractors’ Health and Finances

Unpaid GH₵15 billion Debt Severely Affects Contractors’ Health and Finances

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Roads Jpeg
Roads Jpeg

The Ghana Chamber of Construction Industry, has decried the state of many of its members due to unpaid GH₵15 billion debt owed it by government, accumulated from 2014.

 

The situation, the Chamber said, had led to the death some members, others bedridden, while some had been sued in the court by their financiers over delays in paying back the loans.

 

Speaking at a press briefing on Friday, May 24, Dr Mohammed Amin Adam, Finance Minister, said the government had spent about GHS49 billion to pay contractors.

 

However, Mr Emmanuel Cherry, the Chief Executive Officer (CEO) of the Construction Chamber in an interview with the Ghana News Agency on Monday, May 27, denied knowledge of receiving such money.

 

He gave a narration about the condition that many contractors found themselves as a result of government’s non-payment of the GH₵15bn loan accrued from to 2019.

“Every day, labourers and professionals, financial institutions, cement dealers, and fuel suppliers, are all calling and demanding for their money from one contractor, bringing untold thinking and health difficulties to us,” he said.

 

“Some contractors have died. There’s one contractor in good standing who is currently bedridden and cannot do anything; I spoke with the wife last week Friday, and even money to take care of him is a problem. A lot of them are also in court,” Mr Cherry added.

 

The money that contractors receive are segregated into various components, including payment of interest on loans, which leaves many about five per cent or a maximum of 10 per cent of the contract sum, he explained.

 

“So, if the contractor works and the certificate that’s supposed to have been honoured within 91 days travels to 600 days or 1,000 days and over, the financial institutions that loan money to the contractor will convert their simple interest into compound interest, because there’s a default.

 

Therefore, at the end of the day, if a contractor is being paid, all those monies go to the financial institutions, without a drop left for the contractor… some contractors have now become blacklisted,” he said.

 

A breakdown of the debt as provided by Mr Cherry included GHS6bn owed contractors since 2017, accumulated from Road Fund projects, and GHS5bn from Government of Ghana contracts since 2019.

 

The rest are GH₵4.4bn Cocoa Board (COCOBOD) road projects accumulated from 2014 – of which GHS1bn has been paid in the last month, and GH₵600 million Ghana Education Trust Fund (GETFund) projects.

 

Mr Cheery also stated that some debts were also owed contractors in the Energy sector as well as the government’s recent Agenda 111 hospital projects.

 

He, therefore, stated that if the said GH₵49bn had been paid, a number of halted projects across the country would have resumed, and the pace of work increased, which is not the case at the moment.

 

The Chamber’s CEO, however, said they were willing to jaw jaw with the government for a solution regarding the payment of debts, adding, “should things not go well, the government will see the other side of us [contractors].”

 

He stated that the Chamber had already initiated steps in that regard and were scheduled to meet with the Works and Housing Minister on May 27, with another meeting expected with the Finance Minister later in this week.

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