Renowned banking consultant Dr. Richmond Atuahene has raised alarm over the growing financial distress facing both private and state-owned banks in Ghana, attributing the challenge largely to a surge in non-performing loans (NPLs) caused by government-related payment delays.
According to Dr. Atuahene, many banks are experiencing liquidity pressure and balance sheet deterioration due to the government’s failure to repay loans contracted through local financial institutions to fund road construction projects across the country.
These loans, often accessed by contractors engaged in government infrastructure initiatives, have turned sour as payments to these contractors remain outstanding.
He cautioned that this trend not only threatens the stability of the financial sector but also undermines investor confidence and slows down credit availability to other productive sectors of the economy.
Dr. Atuahene urged the government to prioritize clearing arrears owed to contractors and implement stronger public financial management systems to prevent further accumulation of debt in the private sector. He also recommended that banks reassess their risk exposure and adopt stricter due diligence processes before financing government-backed projects.
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