Unprecedented in the political history of Ghana, there are credible reports from sources in the Bank of Africa and contractors suggesting that Central Bank, regulators and monitors of financial and fiscal sanity, are themselves guilty of the plague of dud cheques afflicting business and the economy of Ghana.
According to our sources at the Central Bank and some notable banking institutions, it is becoming a norm for contractors to be given cheques and told to hold on or walk into the banks to be told that Government has no money in the vaults.
The situation has compelled one banking institution with a soft heart for local contractors, Bank of Africa, to review its overdraft and short term project loan financing facility as a result of the frequency of dud cheques it has been receiving from contractors having been paid them from the Almighty Central Bank.
Since its entry onto the banking turf in Ghana, Bank of Africa has received wide acclamation from contractors for its initiative in pre-financing contractors as a matter, not necessarily of business, but also social responsibility in the effort to help grow industry and the economy. In that regard, it has been assisting several contractors and Small and Medium Scale Enterprises (SMEs) in Ghana and across the sub-region.
With branches across West Africa, including Burkina Faso, it provided lifeline to industry and until recently was the natural choice of most SMEs, until this phenomenon of empty vault even when Ghana boasts of having reduced inflation and gotten its indices on the economy right.
Peeved, contractors are being compelled to quietly lay off workers gradually because maintaining them is become a challenge. They are also scared of trying other banks because, as a result of the convenience and necessity of interconnectivity and networking of banks, the secret is coming out and other banks getting scared as well to engage in the pre-finance products.
Our sources in the Association of Ghana Industry (AGI) has confirmed the trend and said they hope leadership of AGI will make appropriate gestures to Government for intervention and redress.
Contractors are paid from the Consolidated Fund through the Ministry of Finance, which releases cheques on Bank of Ghana Account. Workers, whether formal or informal, then benefit from the economy through paid wages and salaries. This trickles onto the market and dependants in terms of spending helping in the creation of wealth in the society.
In the current situation, therefore, there is likely to be a brake on release of cash and a brake as well on spending to the extent that families will socially benefit in the ultimate to improve living conditions.
