Business News of Tuesday, 1 August 2017
Government has set an ambitious target to complete payments of all arrears owed contractors by 2019.
This follows a validation process to audit the arrears bequeathed the NPP by the erstwhile NDC administration.
The Finance Minister, Ken Ofori Atta disclosed this during his midyear budget review to Parliament on Monday.
According to him, the settlement of the debts should afford some respite to meet other expenditure needs of the government.
Speaking on the development, a Deputy Finance Minister, Kweku Kwarteng explained to Citi Business News the ministry is hoping to complete the auditing of the arrears by October.
“We are validating some of them and so far some of them have proven to be illegitimate…the validation is being led by the Auditor General. Already, we have started with the statutory ones like the NHIS and GETFund.”
“We are taking steps to ensure not only that arrears development in the economy are suppressed but also those commitments we met, provided they prove to be legitimate, are paid off,” he added.
According to the Deputy Minister, the government inherited arrears estimated at 7 billion cedis.
Ghana’s debt stock as at May 2017 stood at 137.2 billion cedis.
This translates into a debt to GDP ratio of 67.5%.
Meanwhile Mr. Kwarteng maintains the government will work to break what he describes as the cyclical accumulation of debts.
“Ultimately we are trying to reduce the development of arrears in the economy so that down the years, we do not expect that people do business for government and those people cannot be paid because government says it does not have money. It’s a culture we are confronting in the development of arrears in the economy; it’s a weakness we have tolerated for so long.”