The International Monetary Fund (IMF) has expressed serious concern regarding the continuous build-up of liabilities across Ghana’s State-Owned Enterprises (SOEs). These liabilities now collectively stand at 25% of the nation's Gross Domestic Product (GDP).
This alarming growth in SOE liabilities significantly outpaces asset growth. Total SOE debt surged from GHS 35 billion (19.0% of GDP) in 2015 to GHS 282 billion (about 25% of GDP) by 2024. The Electricity Company of Ghana (ECG) is the single largest contributor, accounting for GHS 71 billion of these aggregated liabilities, which represents 6.0% of GDP.
This situation presents a major fiscal risk for the Ghanaian government. The rapid accumulation of debt by SOEs, particularly in the energy sector, strains public finances and limits the government's ability to invest in other critical areas. This trend has been a persistent challenge, with previous reform efforts failing to translate into improved financial performance for many state entities.
The IMF highlighted these issues in its Technical Assistance Report on Ghana, titled “Advancing SOE Fiscal Risks Management, Financial Oversight, Governance and Investment Implementation.” The report underscores the urgent need for better management and oversight of these state-owned entities. It also noted that other large entities like the Volta River Authority (VRA) and Ghana National Petroleum Corporation (GNPC) also contribute significantly to the overall liability stock.
The implications of this growing debt are far-reaching. Much of the SOE debt is denominated in foreign currencies or carries implicit government backing. This creates a key channel for both fiscal and external vulnerability for Ghana. Power Purchase Agreements (PPAs) held by energy SOEs often involve US dollar-indexed obligations and government guarantees. These factors magnify foreign-exchange and refinancing risks, closely linking SOE balance sheets to the sovereign's own debt position. Decision-makers must address these structural issues to prevent further deterioration of Ghana's financial health and maintain investor confidence.
The SOE sector remains a substantial part of Ghana's economy. Among specified entities reporting to the State Interest and Governance Authority (SIGA), SOEs generated total revenue of GHS 133.7 billion (11.5% of GDP) in 2024. Total assets for SOEs reached GHS 395 billion in 2024, fluctuating around 34% of GDP over the past decade. While the sector's size has grown with the economy, the disproportionate increase in liabilities poses a severe threat to its sustainability and the broader national economy. This financial imbalance requires immediate and decisive action from policymakers to ensure long-term stability and economic growth.