IMF Alarms Ghana: SOEs Drowning in Billions of Liabilities Amidst Political Interference!

Ghana's State-Owned Enterprises (SOEs) continue to grapple with persistent structural weaknesses, despite significant government reform efforts over the past decade, according to the International Monetary Fund (IMF). In its Technical Assistance Report on Ghana, titled “Advancing SOE Fiscal Risks Management, Financial Oversight, Governance and Investment Implementation”, the IMF noted that these reforms have not translated into improved financial performance, with energy and commodity-sector SOEs remaining the primary sources of fiscal strain through arrears accumulation, liquidity constraints, and non-cost reflective tariffs.

The financial challenges facing Ghana's SOEs are profound. While total revenues increased markedly from GH¢19 billion in 2015 to GH¢133 billion in 2024, this growth has not translated into overall performance improvement. Aggregate liabilities across the SOE portfolio reached approximately GH¢282 billion (about 25% of Gross Domestic Product, GDP) in 2024/2025, significantly outpacing asset growth, which stood at GH¢395 billion in 2024 and GH¢407.85 billion in December 2025. President John Dramani Mahama also expressed alarm over these growing liabilities, highlighting deficits across various public entities.

A few large SOEs are disproportionately responsible for the sector's net losses, which fluctuated around 1.0% of GDP between 2016 and 2024. In 2024, ten SOEs collectively recorded a net loss of GH¢8.8 billion, representing over 90% of total SOE net losses. The Electricity Company of Ghana (ECG) alone contributed 85% of these aggregated losses, equivalent to 0.7% of GDP, and accounted for GH¢71 billion (6.0% of GDP) of the total SOE liabilities. Other major contributors to the debt burden include the Volta River Authority (VRA), Ghana National Petroleum Corporation (GNPC), and Ghana Cocoa Board (COCOBOD). The IMF identified financing costs, particularly for foreign currency-denominated debts, as a critical drag on profitability, with aggregate financing costs reaching GH¢9.4 billion in 2024.

The SOEs’ leverage profile is particularly vulnerable, as much of their debt is denominated in foreign currency or carries implicit government backing, creating significant fiscal and external risks. Furthermore, energy SOEs carry extensive obligations under US dollar-indexed power purchase agreements (PPAs), often backed by government guarantees, which magnify foreign-exchange and refinancing risks, linking SOE balance sheets closely to the sovereign’s debt position. The IMF also cited the issue of tariffs being below cost recovery, unidentified and uncosted quasi-fiscal activities, and other market factors affecting performance as underlying structural issues.

Beyond the financial figures, significant governance weaknesses exacerbate the SOE crisis. The IMF explicitly identified the politicisation of board and chief executive appointments as a major impediment to independence and professionalism. Despite Ghana’s legislative framework for merit-based appointments, these selections remain highly political and centralised in the Presidency. Examples cited include the Ghana Ports and Harbours Authority (GPHA), chaired by a national party chairman, and the Volta River Authority (VRA), where prominent politicians serve on the board. This structure undermines board independence, discourages challenges to management decisions, and weakens the accountability link between board oversight and management performance, departing significantly from OECD standards.

Institutional responsibilities for SOE financial oversight are fragmented between the Ministry of Finance (MOF) and the State Interest and Governance Authority (SIGA), resulting in overlapping functions and reduced efficiency in fiscal risk management. The MOF’s parallel fiscal risk reports (Fiscal Risk Statement and SOE Fiscal Risk Report) offer complementary but sometimes duplicative analyses, with data lags and a lack of focus on macro-critical enterprises. The absence of information on quasi-fiscal activities further obscures the true fiscal cost of SOE operations.

The Auditor-General has noted significant irregularities in procurement, financial management, and audit follow-up across SOEs. Approximately GH¢18.6 billion in financial management irregularities were recorded in 2024, primarily from outstanding debtors and loans (GH¢12.54 billion), and cash irregularities (GH¢4.58 billion). The energy and roads construction sectors were particularly flagged for financial and procurement weaknesses. ECG, for instance, acquired electricity meters valued at approximately US$145 million without complying with the Public Procurement Act. COCOBOD was also identified for major weaknesses in its cocoa roads investment programme, with 87% of contracts directly awarded without competitive tendering.

To address these systemic issues, the IMF has called for urgent reforms. Key recommendations include operationalising formal, transparent, and merit-based procedures for appointing SOE board members and chief executives, with clear competency profiles and standardised vetting. The Fund advocates for progressively reducing the number of active politicians on SOE boards, replacing them with independent professionals and sector experts, and providing structured training in corporate governance. It also stressed the need for stronger financial oversight and governance, improved coordination between the MOF and SIGA, and closer monitoring of SOE investments and procurement to contain fiscal risks and ensure compliance with public financial management regulations. The IMF's assessment underscores that Ghana's journey toward financially sustainable SOEs hinges critically on establishing independent, professional, and accountable governance structures.