Ghana's state-owned enterprises (SOEs) reported a net loss after tax of GHS 9.7 billion in 2024. This significant financial deficit occurred even though 35 out of 54 assessed state enterprises recorded an operating profit.
The State Interests and Governance Authority (SIGA) 2024 State Ownership Report reveals that a few large utility companies caused almost all the losses. A weakening Ghana cedi quietly inflated interest payment and currency revaluation costs. This financial drag pushed the sector into a deeper loss compared to GHS 7.1 billion in 2023.
This outcome challenges the perception that all Ghanaian SOEs are drains on public funds. It highlights the concentrated impact of a few large entities and external economic pressures. The overall loss represents a critical issue for Ghana's public finances and economic stability. Persistent losses from these key entities strain the national budget and divert resources from other development areas.
The SIGA 2024 State Ownership Report confirms that the SOE portfolio delivered a positive operating profit. Profit Before Interest and Tax (PBIT) reached GHS 1.6 billion in 2024. This marked an increase from GHS 377 million in 2023 and reversed a GHS 9.6 billion loss in 2022. Total revenue for the sector grew by 28.3 percent to GHS 133.7 billion. The cost-recovery ratio also moved above one, indicating operational improvements.
Dr. Stephen Lartey's analysis of the SIGA report highlights the disconnect between operational performance and net losses. He noted that the standard verdict of SOEs as a uniform “drain on the public purse” is misleading. He stated that the problem lies with a few very large companies and a financing structure converting otherwise recovering businesses into loss-makers. Fixing the underlying financial issues is crucial for overall sector improvement.
To address these financial challenges, policymakers must focus on the specific entities driving the losses. The Electricity Company of Ghana (ECG) alone lost GHS 8.3 billion. Ghana Water Company recorded a GHS 4.9 billion loss. COCOBOD lost GHS 4.1 billion, and Tema Oil Refinery (TOR) lost GHS 1.5 billion. The Northern Electricity Distribution Company (NEDCo) lost GHS 0.7 billion. These five entities account for almost the entire sector loss, as per the report.
The impact of currency depreciation, specifically the Ghana cedi's weakening, remains a significant concern. A less stable cedi directly increases the cost of foreign currency-denominated debts and imports for these companies. This inflates their expenses, leading to revaluation losses. Investors and financial markets will closely monitor government efforts to stabilize the cedi. They will also look for reforms targeting the large loss-making SOEs. Decisions regarding debt restructuring, improved financial management, and potential strategic partnerships will shape the future performance of this vital sector. The government's fiscal position hinges on addressing these concentrated financial vulnerabilities.