GHS 67.5 Billion Arrears Payment: Joe Jackson Proposes 20% Haircut, 40% in Bonds and 40% Cash

GHS 67.5 Billion Arrears Payment: Joe Jackson Proposes 20% Haircut, 40% in Bonds and 40% Cash

Chief Executive Officer (CEO) of Dalex Finance, Joe Jackson, has proposed that the Government develop a repayment programme aimed at clearing the GHS 67.5 billion arrears owed to contractors and suppliers.

The programme, Mr Jackson asserts, should see to the implementation of a 20% haircut on the total amount, with 40% of the total amount offered to contractors and suppliers in long-term bonds.

The remaining 40% of the total amount, he noted, should be paid in cash to contractors and suppliers.

“I don’t think it is anywhere realistic to expect that the GHS 67.5bn arrears will be cleared in this budget. I think what should be done is that the Government comes up with a programme to renegotiate with contractors and suppliers.

“For me, I think the programme should be one where contractors and suppliers take a 20% haircut, 40% is given in long-term bond, and the remaining 40% is paid in cash,” he averred.

Mr Jackson made the assertion during the NorvanReports and Economic Governance Platform (EGP) X Space Discussion on the topic, “Resetting The Economy: Can Ghana’s 2025 Budget Achieve Fiscal Stability and Sustainable Growth”, on Sunday, March 16, 2025.

Presenting the 2025 Budget Statement and Economic Policy of the government in Parliament on Tuesday, March 11, Dr Forson highlighted the significant arrears accumulated by the government, which represent 5.2% of Ghana’s GDP as of December 2024.

“At the end of December 2024, total central government arrears amounted to GHS67.5 billion, representing 5.2% of GDP. Mr. Speaker, with the road sector recording arrears of GHS21 billion,” Dr. Forson stated.

Upon assuming office on January 23, 2025, Dr Forson said he was inundated with requests for payments from numerous contractors and suppliers.

To ascertain the total arrears and outstanding payments for all Ministries, Departments, and Agencies (MDAs), he said the Ministry of Finance (MoF) formally requested information on all arrears and outstanding claims from the MDAs on January 28, 2025.

“Subsequently, Mr Speaker, the MoF held a special hearing with the MDAs to validate the arrears submitted for payment. The response from the MDAs revealed that a staggering amount of GHS67.5 billion is owed to government contractors and suppliers,” Dr. Forson explained.

The breakdown of the arrears includes GHS49.2 billion in outstanding interim payment invoices from the MDAs and GHS18.3 billion in bank transfers at the Controller and Accountant General’s Department.

Dr Forson also noted that this GHS67.5 billion excludes $1.73 billion owed to Independent Power Producers (IPPs), GHS68 billion owed by the Electricity Company of Ghana (ECG) to contractors, GHS32 billion owed by the COCOBOD to contractors, and GHS5.75 billion owed by the Ghana Road Fund to various contractors.