Mitigating Factors of Financial Distress Causalities of Project Performance in Ghana

In response to bankruptcies and undesirable business performance of construction companies in Sub-Saharan African, this paper seeks to identify factors that mitigate financial distress. Findings presented will assist project stakeholders in mitigating the effects of financial distress. A quantitative research design was adopted using primary data gathered from Ghanaian contractors. A literature review was first conducted to synthesise factors that mitigate financial distress. A closed ended questionnaire was developed to collect perceptional data from contractors on the significance of the mitigation factors to financial distress factors identified within the literature review. The main analytical tools used for this study were the relative importance index (RII), Cronbach's Alpha Coefficient, and Kendall's Coefficient of Concordance. A total of 22 factors were identified and using the RII, the top three rated mitigation factors were delineated, namely, proper financial planning; practice of prompt payment by client; and proper estimation of project cost. This work constitutes pioneering research in the developing country of Ghana that must concentrate on mitigating financial distress in its construction industry.