Johnnie Hughes writes: The Achilles heel of the Ghanaian contractor!

I felt sad, sorry and shocked this morning when I had a conversation with Mr. Daniel Agroh, Chairman of the road contractors association of Ghana, who was driven in by his daughter, an unemployed medical doctor waiting for financial clearance. Per a financial strategy initiated by the Government of Ghana (GoG) through the Ministry of Finance (MoF), to settle portions of their claims vetted and cleared by the Auditor-General’s department… Fidelity Bank expressed interest in this arrangement and they were furnished with a full list of contractors owed. Following this, Fidelity invited these contractors to a meeting last Friday, December 14, to request of them to discount monies owed them over the last two years, by some 10 to 14%. They were to do this voluntarily. What ever that means? That the contractor won the bid to work by specifications for a certain compensation, and now that the work is done, he is being asked reduce the price of the job done, because government has refused to pay. Yet, the roads have become beneficial to the state and the suppliers and creditors of these contractors would not reduce their fees. In the meantime, the banks are calculating their interest on the loans monthly (And we know some banks collapsed because they were owed by these contractors). Even more shameful, is when the two leading political parties, NDC and NPP, have made these roads (Yet to be paid for) a major subject of their campaigns; touting them as achievements! The meeting turned chaotic, because according to the contractors, the certificates for payment, having travelled over two years, have already lost value and so asking them to discount their fees for work done, is equal to fingering their eyes and asking them not to cry or scream. He also mentioned how the banks have been harassing them to, of course, pay back their loans. In addition, the Ghana Revenue Authority and SSNIT have been on their case too; closing their offices and threatening legal action in most cases. How can they fulfil those tax obligations when work done over two years is yet to be paid? So literally, government owes you and hasn’t paid and still sends her agencies to come and chase you for taxes on monies owed you! In the meantime, 5% (now 7%), withholding tax is deducted upfront from the fees of these contractors as soon as the first instalment of the contract sum is advanced for work to begin. Mr. Agroh tells me, about 10 of his members have died, through this mess and just a few weeks back, one of his members who couldn’t stand to watch his house being auctioned by a bank he owed money to, collapsed! But while the finance minister, Ken Ofori-Attah mentioned recently that 1 billion had been released to settle some of the debts, Mr. Agroh says they (contractors), have been looking for where that money went. Because, by that public pronouncement, there was mad rush on them, by their suppliers and people they were indebted to. [caption id="attachment_108433" align="aligncenter" width="626"] Johnnie Hughes (L)and Daniel Agroh[/caption] They therefore view this latest meeting at Alisa as another polish on the dirt and pure punishment. The next step? They want to know from the Government, who would bare the cost of the discount. Is it just to benefit the bank or banks involved in this so-called financial strategy by up to 14% off their monies?  They also want to know when these monies will be released if they agree because the banks aren’t giving them loans anymore. Mind you, per the 400 million capital requirement of commercial banks in Ghana, most of them will have enough to pass around. Earlier on Friday, I met a contractor somewhere in Accra, who had stormed out of the ill-thought out meeting. For two years, his over 100 employees have been jobless and he is jobless too! Truth is, if he hadn’t gone to the rescue of one of his employees, he would have been painfully ejected with his family into the cold. How are these contractors and their dependants surviving? Let’s be very careful as a nation! #CommunityConnect

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Source: Johnnie Hughes | 3FM |]]>