Government has cleared off GH¢588 million out of the whopping GH¢2.4 billion Ghana legacy debts. The amount is part of the monies owed by the Volta River Authority (VRA) to local banks and its suppliers.
The cleared GH¢588m according to Graphic.com report, was paid in three installments of an initial deposit of GH¢250 million and two quarterly payments of GH¢169 million in the last quarter of 2016 and the first quarter of 2017.
Ghana Legacy Debts
As at August 2016, the Volta River Authority (VRA) was owing about 19 commercial banks about US$ 300 million. After an initial payment of GHS250 million was made to the banks, the Ministry of Finance, the Bank of Ghana (BoG), and the Ghana Bankers Association (GAB) reached an agreement on a restructured road map towards clearing the burdening VRA legacy debts. The concord was particularly aimed at a reduction of non-performing loans among the affected banks in the country.
Making reference to this agreement between the government and the local banks in an interview with Daily Graphic, Mr Alhassan Andani, President of the Ghana Association of Bankers expressed confidence in the financial industry to see to the flow of funds to settle the remaining debts within the stipulated five-year period.
In the interview which came off after the launch of the Stanbic Executive Banking product in Accra, on Wednesday 22nd March, 2017, Mr Alhassan Andani pointed out that a complete settlement of the Ghana legacy debts will among other benefits, go a long way in reducing banks’ non-performing loans, as well as strengthening the affected banks by the end of the year.
Many Financial stakeholders readily accepted government’s five-year plan for settling the VRA debts; describing it as realistic and feasible. A lot of them are also optimistic that the new Akufo-Addo led administration will do a lot more, to see to the achievement of the set goals of the plan.