Government Assures Banks of Commitment to Settle Contractor Payments

The Minister for Roads and Highways, Kwame Agbodza, has assured banks of government’s commitment to settling outstanding payments owed to contractors as well as to explore strategic and innovative financing models for critical road projects across the country.

He made this statement on Wednesday in Accra during a meeting with some banks that included the Agricultural Development Bank (ADB), National Investment Bank (NIB) and Ecobank Ghana Limited with the focus on addressing the government’s longstanding indebtedness to road contractors, many of whom have outstanding loans with these banks.

“With regard to the indebtedness, we will pay. The reality is that the health of state-owned banks is adversely affected when the government fails to pay contractors on time, especially those who have taken loans from these banks,” the Minister said.

Other key areas of the discussions were on re-introduction of road tolls, negotiations regarding interest on delayed payments, financing major road projects under the government’s “Big Push” initiative, and improving communication between the ministry and financial institutions.

Mr Agbodza urged the banks to consider revising their lending policies and interest rates, encouraging them to adopt innovative approaches to create a supportive financial environment for road contractors.

He encouraged ADB to explore ways to support stalled Cocoa Roads Projects, which are vital for improving access to cocoa-growing regions and enhancing Ghana’s agricultural exports.

“Let’s not forget that you are the Agricultural Development Bank, so perhaps you should prioritize cocoa roads over urban projects,” he noted.

The banks expressed their interest in supporting the road sector through syndicated funding arrangements and investing in technologies for efficient road toll collection.

These engagements highlight the government’s commitment to fostering Public-Private Partnerships (PPP) aimed at accelerating road infrastructure development and improving the overall condition of the road network across the country.

Margaret Adjeley Sowah, ISD