Fidelity Bank Ghana Limited has offered a lifeline to the Government of Ghana by stepping in to pay the arrears of contractors, especially, those in the road sector, who have executed various projects across the country for the Government but have not been paid.
This follows an agreement reached between the Government of Ghana, represented by the Ministry of Finance, and Fidelity Bank Ghana Limited for the purchase of Interim Payment Certificates (IPCs) due contractors.
The Government is said to be owning road contractors about GH₵1.6billion for road maintenance alone. The debt kasapafmonline.com understands, is due to the award of enhanced projects by the Government in the year 2016.
There is still an outstanding amount of GH₵15 billion worth of project to be done, according to the Chairman of the Association of Road Contractors (ASROC), Daniel Attoh Agroh.
In 2017, the Minister for Roads and Highways, Mr. Kwasi Amoako-Atta announced that the government was owing road contractors GH₵20billion.
Per the dictates of the new financial arrangement, Fidelity Bank shall buy the arrears of the contractors at a discount rate. This means that the contractors will have to discount their debt owed them by the Government so Fidelity Bank Ghana Limited after validation will pay them.
A letter from the Ministry of Roads and Highways dated December 12, 2018 and addressed to contractors, a copy of which was intercepted by kasapafmonline.com, in part read “the Government of Ghana through its Ministry of Finance is implementing a financing strategy that will facilitate the payment of a good portion of claims on the Government from contractors for various construction projects executed across the country validated by the Auditor General via leveraging the balance sheet of interested financial institutions”.
“The Transaction shall involve the purchase of validated claims on the Government by Fidelity Bank Ghana Limited at a discount price”.
The letter in part further read “The discount price at which the contractor arrears shall be purchased shall be based on the results of an auction to be organized by Fidelity Bank Ghana Limited through which each contractor submit voluntary bids of the level of discount they are willing to offer to sell and or assign their IPCs to Fidelity Bank Ghana Limited”.
Fidelity Bank Ghana Limited, kasapafmonline.com is informed, met with the contractors whose payments are in arrears, at Town Hall Meeting at Alisa Hotel in Accra on Friday, December 14, 2018, to explain their proposed financing solution and various stages involved.