Did you know that a staggering 70% of funds allocated to road projects are swallowed by interest payments rather than actual construction?
Ghana’s road construction sector, for years, has been bleeding profusely, draining the scarce resources of the state due to payments made for interest for delays. This was revealed by the Deputy Finance Minister Thomas Nyarko Ampem.
The minister revealed this grim reality at the 2025 National Procurement and Supply Conference, exposing years of systemic inefficiency fueled by poor procurement practices and reckless contract awards.
The numbers and the extent of the damage, he says, are shocking. For every GH¢1 billion earmarked for road construction, only GH¢300 million delivers tangible work on the ground.
The rest, representing some GH¢700 million, evaporates into interest charges on delayed payments.
“Surveys show that any amount of money that we pay for road construction, only 30% of that amount is actual work done. 70% is interest on delayed payments. So if you hear that the government says we will spend 1 billion cedis on roads, only 30% of that, only 300 million of that 1 billion, has gone into actual road construction. The remaining 70% is payment for interest, and delayed payment on interest,” he recounted.
The problem, he narrated, stems from uncontrolled contract awards without secured budgets.
For instance, an audit conducted by the government has revealed that the Ministry of Roads and Highways, for instance, carried over 800 contracts into the 2025 fiscal year despite receiving just GH¢2.2 billion in capital expenditure allocation.
Many projects worth millions were allocated a paltry GH¢70,000, enough to commit the state, but not enough to move machines back to the site.
This endless cycle of overcommitment and underfunding has turned Ghana’s infrastructure development into a vicious debt trap, where the nation pays more for doing less.
However, there is hope. The recent amendment of the Public Procurement Act is being hailed as a game-changer. Under the new government, no procurement can be approved unless backed by commencement certificates, budgetary provisions, and commitment authorisations from the Ministry of Finance.
This means ministries, departments, and agencies can no longer award contracts without secured funds.
“We have amended the Public Procurement Act to make commencement certificates, authorisation, and budgetary provisions prerequisites for all procurements to be paid by the central government. We have enhanced system integration to ensure that only MDAs’ projects, and purchase orders that have approved budgets and allotments can obtain procurement approvals to award contracts,” he noted.
While some complain the system introduces an additional bureaucratic hurdle, the Deputy Minister insists it is a necessary intervention to save the state from hemorrhaging scarce resources. “If you don’t have the budget for it, the Minister of Finance will not give you authorisation to commit the state,” he explained.
These procurement tightening processes, the Minister said, are aimed at halting the financial waste that has long crippled road projects, ensuring that every cedi spent delivers actual development rather than feeding the black hole of interest payments.
