Wed, 29 May 2024 Business & Finance

Construction Chamber laments seizure of properties of members over loan default

  Wed, 29 May 2024
Construction Chamber laments seizure of properties of members over loan default

Chamber of Construction Industry has raised concern over a growing crisis where financial institutions have begun seizing the assets of its members.

These assets were initially used as collateral for loans meant to facilitate the execution of government projects.

According to the Chamber, the drastic move by the financial institutions is creating a ripple effect throughout the construction sector and the broader economy.

The Chamber highlighted a staggering debt of GH¢15 billion owed to contractors, saying only a fraction, amounting to GH¢1 billion, has been disbursed by the Ghana Cocoa Board to road contractors.

This insufficient payment has forced many contractors to abandon their project sites, leaving numerous government projects unfinished thereby exacerbating the challenges in the construction sector.

Emmanuel Cherry, the Chief Executive Officer of the Chamber of Construction Industry, detailed the severe repercussions of this situation during an interview with Citi News.

He painted a bleak picture of the current state of affairs for contractors, who he said are now facing the confiscation of their assets by financial institutions.

These assets, which include houses and other properties, were used as collateral to secure loans for their work on government projects. The inability to meet loan repayments has led financial institutions to reclaim these assets, severely impacting the contractor’s financial stability and operations.

“The financial institutions have moved to the various assets used by the contractors as collateral and then they are now taking possession of those assets. Most of the houses that the contractors or the properties that the contractors have used as collateral, most of them have been taken over by the financial institutions.

“The unemployment rate is on the ascendancy because contractors have moved from the site. So all those construction workers have been redundant as we speak. From the engineers, architects, surveyors, project managers and what have you, all of them are home today,” Emmanuel Cherry lamented to Citi News.