A recent Auditor General’s Report has revealed a significant issue in the government’s recovery of loans receivables, with an alarming GH¢61 billion still outstanding.
This represents a staggering 99.93% of the total loan receivables for the year ending December 31, 2023.
The Auditor General’s review identified that, out of GH¢63,384,527,594 in outstanding loans, only GH¢43,450,428.00 representing, 0.07%—was recovered during the review period.
This poor recovery rate has been attributed to the absence of a debt collection strategy and a lack of follow-up actions by the Controller and Accountant-General (CAG) to ensure that these covered entities repay their debts.
Appearing before the Public Accounts Committee of Parliament, the Controller and Accountant General, Kwasi Adjei, explained that a committee has been established to oversee the recovery of the debt.
The report further notes that these loans have remained in government books for extended periods without any clear recovery plan or policy in place.
The report further notes that these loans have remained on government books for extended periods, with no clear recovery plan or policy in place. The Auditor General warned that if the government fails to act, these debts could eventually be written off, depriving the nation of vital resources needed to fund its programs.
The report calls for urgent action to create and implement a comprehensive debt recovery strategy to address this pressing issue.
Background
In March this year, banks in Ghana wrote off GH¢4.33 billion as bad debt for 2023. The bad debt was categorized under loan losses, depreciation, and other financial impairments.
According to the Bank of Ghana, this sharp reduction in 2023 is attributed to banks reporting lower impairments on financial assets during the year.
This number, although high, reflected a significant 79.2% decrease compared to 2022. In 2022, bad debt amounted to an estimated GH¢20.8 billion.
In 2021, the Finance Ministry was also unable to recover monies given out as loans to some public sector workers ¢11,005,582.
The Auditor-General uncovered this in its report on the country’s public accounts for ministries, departments, and agencies for the year ended December 31, 2021.
Per the report, the Auditor-General directed that the Ministry take steps to recover the said amounts.
Portions of the document read, “We recommended that the Chief Director of the Ministry should liaise with the Controller and Accountant-General’s Department to have the outstanding amounts deducted from the salaries of the staff involved.”
In that same year, a total of ¢17.4 billion in financial irregularities were flagged by the Auditor-General in its report, which was submitted to Parliament for the 2021 financial year.
