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VRA debt: 160 million cedis to be paid end of March

vraAbout 160 million cedis is expected to hit the accounts of banks that are owed the energy sector debts, by the end of March 2017.

This is according to the President of the Ghana Association of Bankers, Alhassan Andani.

The payment will be the first to be made this year since the erstwhile NDC government commenced payments to the affected banks in August last year.

“It’s a restructured facility it’s about coming in at 160 million cedis at the end of March,” he said.

Mr. Andani added, “Government is on schedule with the reductions as was agreed, we have received our advanced payments. We have two hundred and fifty million; we have received the September quarterly payments and also received the December quarterly payments with invoices for March and there is every indication that we will get paid so that is really coming down.”

The state owned Volta River Authority (VRA) owes the banks to the tune of 4.4 billion cedis.

Already, three tranches have been paid to the 13 affected banks.

Mr. Alhassan Andani also tells Citi Business News the settling of the debts should help improve the loan books of the affected banks.

“The VRA debt has been paid down…But as I said 2.4 billion that was restructured for five years is being repaid on time in the amounts that we agreed on with government  sometimes we don’t like reporting that it is doing well but it is doing very well I must say.”

The huge debt portfolio has affected the bottom line of banks for sometime now.

For instance the latest Economic and Financial Stability report by the Bank of Ghana has shown that Non-Performing Loans of banks as at end of 2016 was 17.4 percent after reaching highest figures in May, July, September and October where the NPL portfolio hit the region of 19 percent.

The development also compelled the commercial banks to threaten cuts in loans to businesses if their debt profiles did not improve.

 

 

Source: citibusinessnews

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