The Finance Minister Ken Ofori Atta has said that the government will release about GH¢2 billion between this year and early 2019 to settle outstanding arrears owed contractors, mostly in the road sector.

Speaking to the Daily Graphic, Mr Ofori-Atta said GH¢1 billion had already been earmarked for disbursement by the end of the year out of the GH¢1 billion.

He added that an additional GH¢900 million would be paid to contractors in the course of next year.

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The Finance Minister said: “The decision to release the funds follows a comprehensive audit undertaken by the Auditor-General after we suspected some anomalies in some of the bills submitted to the government for payment.”

Earlier the President of the Ghana Association of Bankers (GAB), Alhassan Andani, had raised concerns at the 2019 post-budget session under the auspices of PricewaterhouseCoopers (PwC) about how the government’s indebtedness to contractors affects the operations of banks in the country. He urged the government to in place measures for the debt settlement.

Responding to this Mr Ofori-Atta said the government owes contractors about GH¢3.4 billion but gave an assurance of the government’s commitment to release the funds to pay the contractors.

Effect on the economy

When the government releases the funds, it will help stimulate the economy for Christmas 2018 and beyond.

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It will also help bring down the non-performing loans (NPLs) on the books of commercial banks, which currently hover around GH¢8.74 billion.

Mr Ofori Atta was optimistic that the payment would help relieve not only the contractors involved but the banking sector in general, suppliers of the contractors and other businesses.