Ghana’s State Owned Enterprises recorded financial management irregularities amounting to approximately GH¢18.6 billion in 2024, raising fresh concerns about financial controls, procurement practices and the growing fiscal risks associated with publicly owned institutions.
The scale of the irregularities is contained in an International Monetary Fund Technical Assistance Report titled “Advancing SOE Fiscal Risks Management, Financial Oversight, Governance, and Investment Implementation”, which examines Ghana’s management of State Owned Enterprises, their financial performance, governance structures and potential exposure to the public purse.
According to the report, the irregularities identified in the 2024 Report of the Auditor General on the Public Accounts of Ghana covered several categories, with outstanding debtors and loans accounting for the largest proportion.
Outstanding debtors and loans amounted to GH¢12.54 billion, representing overdue receivables and funds that remained locked up and therefore unavailable for productive use.
Cash irregularities constituted another GH¢4.58 billion and included unsupported payments as well as revenues that were not properly accounted for.
Contract related irregularities amounted to GH¢871.82 million, while procurement irregularities stood at GH¢335.27 million. The Auditor General also identified payroll irregularities amounting to GH¢191.6 million, tax irregularities of GH¢77.06 million and stores irregularities of GH¢4.5 million.
Taken together, the figures amount to approximately GH¢18.6 billion, underscoring the extent of weaknesses in financial management across parts of Ghana’s State Owned Enterprise sector.
The IMF report attributed the weaknesses in part to inadequate oversight by management and boards, while also pointing to ineffective debt collection practices and weaknesses in internal audit systems.
It observed that some company managers had demonstrated insufficient commitment to recovering loans and outstanding debts, contributing to delayed repayments and the accumulation of additional interest charges.
The Fund further noted that weak systems for collecting debts had resulted in a growing volume of accounts receivable, thereby tying up resources that could otherwise support the operations and financial sustainability of the affected institutions.
The findings have particular significance for Ghana’s energy and roads construction sectors, which the IMF identified as areas where financial management and procurement weaknesses remain pronounced.
More than 15 percent of payables and 6.4 percent of procurement commitments in the sectors were identified as being in breach of public financial management regulations or other statutory requirements.
The IMF warned that weaknesses within strategically important State Owned Enterprises could have consequences beyond the individual institutions because persistent financial distress and accumulated liabilities can ultimately increase the government’s fiscal exposure.
The Electricity Company of Ghana emerged as one of the prominent examples highlighted in the assessment.
A performance audit by the Ghana Audit Service found that ECG entered into 50 contracts for the procurement of electricity meters and related accessories valued at approximately US$145 million without complying with the requirements of the Public Procurement Act.
The contracts covered the procurement of 862,750 meters and accessories, with the Auditor General concluding that ECG had failed to follow the prescribed procurement requirements.
The IMF also drew attention to power purchase arrangements involving unsolicited take or pay agreements.
Such contracts, under which payment obligations can arise even when the contracted electricity is not fully utilised, contributed to a situation in which Ghana’s electricity generation capacity exceeded actual national demand.
The resulting obligations have placed continued pressure on the energy sector and created additional financial burdens that ultimately carry implications for public finances.
The Ghana Cocoa Board was similarly identified as facing significant weaknesses in procurement and infrastructure project management.
The IMF referenced an audit which found that 87 percent of projects under COCOBOD’s cocoa roads investment portfolio were awarded through single source and non competitive processes.
The report further identified deficiencies in project costing, including significant cost overruns, as well as weaknesses in monitoring and contract management. These shortcomings, according to the assessment, contributed to additional financial pressures within the cocoa sector.
The concerns surrounding ECG and COCOBOD form part of a broader fiscal challenge confronting Ghana’s State Owned Enterprise sector.
The IMF found that liabilities across the SOE portfolio had risen sharply, increasing from GH¢35 billion in 2015 to GH¢282 billion in 2024, equivalent to about 25 percent of Ghana’s gross domestic product.
It identified ECG, the Volta River Authority and COCOBOD as the entities accounting for the largest share of aggregate liabilities and therefore carrying some of the greatest potential fiscal risks for the state.
The Fund noted that Ghana had made considerable progress in establishing systems for monitoring State Owned Enterprises, including the creation of the State Interests and Governance Authority, the adoption of a State Ownership Policy and the introduction of corporate governance and performance management frameworks.
However, it cautioned that the existence of these frameworks had not yet translated into consistently effective financial and institutional discipline across the sector.
The report also raised concerns about compliance with financial reporting and auditing requirements, noting that many State Owned Enterprises struggled to submit financial statements within the required timelines.
For the 2024 financial year, the IMF found weaknesses including late or missing financial statements, inaccurate revenue reporting, inadequate documentation, weak asset management and insufficient internal audit capacity.
The Fund consequently called for stronger enforcement of financial reporting and audit requirements, arguing that improved compliance would enhance transparency, strengthen accountability and improve the credibility of Ghana’s public financial management system.
It also recommended that fiscal risk monitoring should focus more closely on strategically important and high risk State Owned Enterprises, while the Ministry of Finance and SIGA should improve the exchange and integration of financial information.
The IMF further urged authorities to strengthen oversight of major investments undertaken by State Owned Enterprises and ensure that infrastructure projects are subjected to independent assessment of their costs, risks, schedules and expected benefits.
The report’s recommendations come at a time when Ghana is seeking to consolidate recent improvements in fiscal management and reduce the possibility that liabilities accumulated by public enterprises will eventually become obligations of the central government.
The Fund has therefore stressed that stronger financial controls, more rigorous procurement practices, effective debt recovery, timely auditing and credible oversight must become central features of the management of State Owned Enterprises.
For Ghana, the GH¢18.6 billion in reported irregularities represents more than an accounting concern. It highlights the financial consequences of weak controls within institutions that manage significant public assets and operate in sectors that are critical to the national economy.
The IMF’s assessment makes clear that reducing the fiscal risks posed by State Owned Enterprises will require not only new policies and governance structures, but also consistent enforcement of the rules, stronger institutional oversight and demonstrable accountability for the management of public resources.
