The Ministry of Roads and Highways has announced a new payment regime that will ensure that all outstanding debts owed contractors in the road sector are cleared within 90 days of certification.
This is part of efforts to eliminate interest charges on delayed payments that have drained the national purse for years.
Appearing before the Public Accounts Committee (PAC) of Parliament last Monday, the Minister of Roads and Highways, Kwame Governs Agbodza, disclosed that the ministry had begun implementing a contractual framework under which contractors would no longer receive mobilisation fees or be entitled to claim interest on delayed payments.
In return, government would guarantee prompt settlement of certificates within the stipulated 90 days.
He explained that the decision formed part of a broader fiscal discipline strategy under the “Big Push” infrastructure initiative to curb the accumulation of arrears and restore confidence among road contractors.
“We are determined to pay them before the 90 days; far before that,” Mr Agbodza said, adding that if the proposed regime worked satisfactorily, contractors would not need to include a clause for interest on delayed payment in any government contract.
Report
The session formed part of PAC’s ongoing consideration of the Auditor-General’s Report on the Public Accounts of Ghana for the year ended December 31, 2024, focusing on infractions and financial performance within the Ministry of Roads and Highways.
According to the Auditor-General’s 2024 Report, the ministry owed GH¢615 million in delayed payments to contractors, a liability that continues to rise.
The minister described the situation as unsustainable, revealing that interest payments across all road agencies could total between GH¢10 billion and GH¢15 billion if not checked.
“It’s a drain on the national resource,” he emphasised, adding that the government had already paid close to GH¢5 billion toward arrears clearance in recent months.
Mr Agbodza acknowledged that frequent delays in payment were largely due to overcommitment on the part of government, often influenced by popular demand for new road projects.
He stressed that the ministry was now working to align contract awards with available funding, as advised by the Auditor-General, to ensure project continuity and prevent costly stoppages.
Sustainability
Responding to questions from the committee on the sustainability of the new arrangement, the minister said most contractors preferred timely payment to the current interest-laden arrangement.
“Once the regime of payment improves, contractors don't really care whether there's a clause in there or not, and we are determined to use the big push as a template to start that without having written that into the contract.
“We pay them within a reasonable time, then they can go and actually retire their indebtedness to the banks or the financial institutions,” Mr Agbodza said.
The Chair of the committee, Abena Osei Asare, however, urged the ministry to strictly enforce the 90-day contract payment regime and ensure adequate budgetary provision to sustain the new regime.
Mr Agbodza further assured the committee that active steps were being taken to complete critical road projects such as the Nsawam–Ofankor and Konongo–Ejisu bypasses, where work had resumed after the clearance of outstanding debts to contractors.
Axle-load
Beyond payment issues, the minister expressed grave concern over the increasing rate of axle-load violations and overloading on the country’s roads, which, he said, was contributing to premature road deterioration despite massive investments in infrastructure.
He revealed that many vehicles bypassed weighbridge stations at ports, aided by lax oversight, and that some axle-load operators manipulated data to conceal infractions.
To address the situation, he said the government had raised the fine for overloading from GH¢5,000 to GH¢50,000, with plans to make overloaded goods liable to forfeiture and auction.
Mr Agbodza said stricter enforcement and stiffer penalties were necessary to protect roads and public funds.
