The Ghana Chamber of Construction Industry (GhCCI) says the government is killing the local construction industry due to delays in payment of construction work done.
The chamber says the chronic delay in payment to local contractors is crippling the industry and leading to job losses.
The delayed payment and funding challenges bedeviling the local construction industry took the center stage of the Infrastructural conference organized by the GhCCI in Koforidua on the theme ” Project finance and funding Methodology for Infrastructure Development in Ghana: The case of the Chamber of Construction Industry and delayed payments with its associated interest matters”.
The President of the Ghana Institution of Engineering (GhIE), a member of the Chamber Ing. Rev. Prof. Charles Anum Adams told Starr News at the sidelines of the conference that government is still owing some contractors who have worked since 2015 making life unbearable as their creditors pursue them.
“You will go and credit things like fuel, cement quarry products from different places to come and do the work and sometimes they do the work for three months, six months then they have achieved a certain amount of the work so they raised what they called a certificate which the client has agreed to pay, unfortunately, it is so sad that as it was said in the meeting, some contractors have worked and since 2015, 2018 they have not been paid”.
He continued “meanwhile interest is accruing on the loan you have taken. Your creditors whom you have taken the materials from will be on you, everybody will be on you, your money that is with government is not coming to but look at the economy that we are in, look at even people that government is already owing, then by the time government was owing you was a year ago the dollar was Ghc4 or something, now the dollar where it has reached it means your money has been reduced significantly when you do that you are collapsing the industry. So government who is supposed to promote the industry, but unfortunately, is killing the industry and I am not saying about the current government only, this thing started as I said in my address more than ten years ago, even previous governments”
Rev. Prof. Charles Anum Adams said failure to pay contractors has multiple chain effects on the local economy and job sustainability.
“When you don’t pay contractors, they can’t pay their staff they cannot employ more people. The people that sell the quarry products also have to get their money so they can also employ people who will also break the stones at the quarry, the money doesn’t come only to the contractor, every money that comes to the contractor goes into several aspects of the economy, and it increases the value chain and therefore creates wealth in the country”
He added that governments mistreatment of local contractors is the reason Ghana cannot boast of a single one local contractor with the capacity to build an interchange in the country.
“Imagine that 65 years ago or so since we became independent we can’t boast of single one big contractor that can build an interchange. It is very shameful That’s an embarrassment. It doesn’t happen in any progressive country. All of them (construction companies) we have killed them one by one. Every few years we start new construction companies and we kill the ones that were there. The challenge is that if you become big you are likely to be used by the politicians for their own interest or they will kill your company because if they don’t pay you they are killing your company, but when you do that you may end up killing the industry”.
He stated that the collapse of the local construction industry means “you are killing the economy, and you will never create any sustainable job anywhere irrespective of whatever policy government initiates if the construction sector does not boom. Whether housing, road, dams, or port. If we don’t support it the economy can never work.”
Rev. Prof. Charles Adams described as unfortunate discrimination by government in terms of prompt payments to foreign contractors amid tax waivers and other incentives despite getting the juicy contracts whilst the local contractors were starved with funds and sabotaged.
“Even America when they want their economy to work they invest in construction, they inject money into the economy, and then the materials are converted into assets. The money must belong to the citizens of the country, not foreigners. If all the money is going into construction or big interchanges which are done by foreigners it is a mistake ”
Ghana’s infrastructure deficits, in terms of road and railways, are estimated at $17 billion, with road infrastructure deficit accounting for US$7 billion while railways infrastructure is also behind at a projected figure of US$10 billion.
The development puts the country far behind several countries across Sub-Saharan Africa, in road infrastructure ranking in the World Economic Forum Index.
Meanwhile, the Ghana Chamber of contraction industry (GhCCI) has suggested to the government leverage innovative public-private partnerships (PPPs) and Project Finance approaches to develop funding needs for local contractors to save the industry.
