AGI SECTOR CHAIR APPLAUDS CONSTRUCTION BANK ESTABLISHMENT
The sector chair of the Association of Ghana Industries (AGI) Construction Sector and Vice President of the Chartered Institute of Building (CIOB-Africa) Mr Rockson Dogbegah has lauded the establishment of Construction Bank Ghana Limited describing it as timely and strategic.
“I see the opening of the Construction Bank, Ghana as very timely and strategic. It's coming at a time when the government has set very ambitious targets to make Ghana one of the most attractive industrialized countries in Africa. This calls for a sustainable long term financing environment to support the agenda for growth,” he said.
Speaking in an interview in Accra Mr Dogbegah said it was his expectation that the Bank would help in addressing some of the major challenges confronting the sector.
“I will expect the bank to be supportive of the needs of the sector. The bank should be able to position itself to pre- finance government contracts so government can pay the bank directly. This can be done by government providing some kind of guarantee to the banks,” he said.
In this case, he said, the government must deal directly with the bank whiles contractors take their certificate directly to the bank for payment.
“This way the headache of delayed payment for government contracts suffered by local contractors leading to a lot of nonperformance related issues will be solved. I’ll also expect the new bank to create a desk to provide special support services to contractors and customers in the area of business growth support solutions. In other jurisdictions, this is done very well to ensure that SMEs are adhering to corporate governance and growth strategies,” he suggested.
On challenges confronting the construction, he said cited in particular delayed payment by government sector clients as one the challenges.
“This problem strains the relationship with our suppliers and puts a lot of pressure on government service providers. It's not surprising that, most local contractors are not able to live long,” he said.
Mr Dogbegah said “Long term financing is also a challenge. Most facilities are short term. The high interest rates also don’t make the local construction companies competitive. Foreign companies are able to access banking facility without too much demand for collateral etc and also at a cheaper cost sometimes between 3-5 per cent as opposed to over 35 per cent in Ghana with a lot of other fees- processing, monitoring, etc which aggregates to about five per cent. All of these make the cost of construction in Ghana very expensive.”
On ways to solving the problems confronting the sector, he said, “As a country we need a complete re-orientation and be ready to learn very quickly from what other countries are doing. There is the need for government to further quicken the private sector re-positioning agenda for it to provide the needed impact through further deepening of the private sector engagement. It's important to mention that this government is doing well but there is still a lot of room for improvement.”
The government he said must also create the appropriate socio-economic environment through revolutionary policies and legislations that ensure all polices are well aligned to stimulate performance of the banking sector.
“I wish to congratulate the Board Chairman Asare Akuffo and the MD Mr Steve Kpordzi for their appointment as the first "drivers" of the maiden bank. The two have a lot of banking experience in the banking sector and the construction industry space,” he said