Nana Kwadwo Boakye-Akyeampong, Senior Manager for Real Estate Financing at Absa Bank Ghana Limited, has bemoaned the challenges confronting banks in providing funding for major infrastructure and real estate projects in Ghana.
Speaking at the Citi Business Festival Roundtable Discussion on Monday, June 15, held under the theme ‘Building Competitive Cities: Infrastructure, Innovation and Investment for Sustainable Economic Growth,’ Boakye-Akyeampong highlighted the complex considerations banks must take into account before committing funds to large-scale development projects.
He explained that while financial institutions are often expected to support infrastructure development and economic growth, they are constrained by their responsibility to safeguard the interests of depositors, investors, and other stakeholders.
“Financing institutions have a fiduciary duty to their stakeholders, which means that they are protecting investments and adding value to them. That means before you do any investment, you must consider whether the project is bankable or viable.
“If I put money into that project, will I get the expected returns to ensure that value is returned to the promoters of the development as well as my various stakeholders and this is where it is sometimes a problem to finance some projects. You come out with projections which sometimes are not realistic.”
Boakye-Akyeampong further explained that project financing decisions are influenced not only by the quality of project proposals but also by broader macroeconomic conditions including exchange rate volatility, high interest rates, and inflation as some of the major factors that continue to hinder project financing in Ghana.
Explore the world of impactful news with CitiNewsroom on WhatsApp!
Click on the link to join the Citi Newsroom channel for curated, meaningful stories tailored just for YOU:
https://whatsapp.com/channel/0029VaCYzPRAYlUPudDDe53x
No spam, just the stories that truly matter! #StayInformed #CitiNewsroom #CNRDigital
