Breaking News

Holland Takes 2-0 Lead Over Brazil in World Cup Runner-up Match
Tweet TWEET

Ghana Government Is Responsible for 20% of Bad Loans at Banks, Group Says

Ghana’s government is responsible for a fifth of bad loans at the country’s banks because of arrears owed to contractors, suppliers, and municipalities, said Joseph Abbey, director of the Centre for Policy Analysis.

“It is a big factor in the stock of non-performing loans in the banking sector,” he said in an interview in Accra today. Government arrears amount to 2 billion cedis ($1.38 billion), Abbey said, citing research by the organization.

The government’s failure to repay its loans has led to road projects being halted and has left schools and clinics struggling to pay for supplies, Abbey said.

About 16 percent of loans by Ghana’s commercial banks were classified as non-performing as of September, down from more than 20 percent in February, he said. Ghana, which is set to begin exporting oil this month, has a proposed 2011 budget of 12.7 billion cedis.

To contact the reporter on this story: Jason McLure in Accra at jmclure@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.