Ghana's state-owned enterprises (SOEs) have accumulated GHS 282 billion in liabilities by 2024, according to a new International Monetary Fund (IMF) technical assistance report. This substantial debt, equivalent to about 25.00% of Ghana's Gross Domestic Product (GDP), signals a critical threat to the nation's public finances.
The report details how these liabilities have surged from GHS 35 billion in 2015, driven by persistent losses, weak governance, and large infrastructure investments. Key entities like the Electricity Company of Ghana (ECG), Ghana Cocoa Board (COCOBOD), and Volta River Authority (VRA) are central to this problem. Their financial distress could quickly become a major macro-fiscal issue for the entire country.
This escalating SOE debt fits into Ghana's broader economic challenges, including high public debt and ongoing fiscal consolidation efforts. The government has been working with the IMF on a bailout program to restore macroeconomic stability. The report underscores how SOE financial health directly impacts the government's ability to manage its overall debt burden and achieve sustainable growth. Previous efforts to reform these entities have not yielded consistent financial improvements.
The IMF warns that Ghana possesses the institutional frameworks to control these risks, but they have not translated into better financial outcomes. The Fund's central warning highlights a disconnect between established rules and actual financial performance. This situation exposes taxpayers to significant financial burdens, far beyond the direct managers of these public companies.
Decision-makers must now address the structural issues identified by the IMF to prevent further fiscal deterioration. Investors and financial markets will closely watch the government's response to these findings. The report implies that without decisive action, the government may face difficult choices regarding recapitalisation or assuming more SOE debt, further straining public resources.
The Electricity Company of Ghana (ECG) provides a striking example of the problem's scale. ECG recorded GHS 8.3 billion in losses in 2024, despite reporting GHS 36.1 billion in operating revenue. The utility accumulated approximately GHS 26 billion in losses over three years. This persistent weakness could ultimately force the government into significant recapitalisation or debt assumption, placing a heavy burden on the national budget.
ECG's balance sheet reveals that trade and other payables reached GHS 54.5 billion, accounting for 76.80% of its liabilities. Total liabilities approach 90.00% of assets when trade payables and tax obligations are included. ECG itself estimates that about 40.00% of electricity placed on its network is effectively unbilled or uncollected. This results from technical and commercial losses and non-metered consumption, severely impacting its financial viability.
Across the wider SOE portfolio, the IMF notes that losses remain heavily concentrated despite years of reform efforts. SOE revenues rose from GHS 56 billion in 2021 to GHS 133 billion in 2024. However, aggregate losses deepened from GHS 1.7 billion to GHS 9.7 billion over the same period. Ten major entities generated more than 90.00% of total losses, with ECG alone accounting for about 85.00% of aggregate SOE losses in 2024. This indicates a problem with a smaller number of systemically dangerous companies rather than widespread distress.
Finance costs are making it harder for these companies to escape their financial woes. The IMF estimates aggregate financing costs at GHS 9.4 billion in 2024. This figure is almost six times the GHS 1.57 billion in earnings before interest and tax generated by the largest SOEs. Foreign-currency liabilities also expose these companies to cedi depreciation and refinancing risk. An enterprise can improve operations, yet see those gains swallowed by debt servicing, exchange-rate movements, and legacy obligations.
The report's most politically sensitive finding concerns the governance of these companies. The IMF states that Ghana's formal ownership and corporate-governance framework aligns with international standards. However, board and chief executive appointments remain highly political and centralized in the Presidency. Major SOE boards contain significant numbers of political appointees. This can weaken board independence and create incentives for CEOs to respond more strongly to political principals than to their boards. This becomes a serious concern when companies control billions of cedis in assets, contracts, and infrastructure expenditure. The IMF recommends Ghana introduce merit-based selection for boards and executives. It also suggests progressively reducing the number of active politicians and senior public officials serving on SOE boards.