Government reform efforts yet to translate into improved SOEs financial performance – IMF

The International Monetary Fund (IMF) has highlighted that Ghana's decade-long government reform efforts have not yet yielded improved financial performance from State-Owned Enterprises (SOEs). The IMF attributed this to persistent structural weaknesses, particularly in the energy and commodity sectors. Despite a significant increase in SOE revenues from GH¢19 billion in 2015 to GH¢133 billion in 2024, the overall performance remains stagnant.

A few large SOEs continue to drive the portfolio into net losses, fluctuating around 1.0% of GDP between 2016 and 2024, largely due to financing costs of foreign currency-denominated debts. The IMF emphasized the disconnect between reform progress and tangible performance gains, noting that structural constraints, such as weak enforcement of hard budget constraints, remain unaddressed.

The agency welcomed the strengthened fiscal risk assessments by the Ministry of Finance (MOF) but pointed out challenges with timeliness, data completeness, and integration of these processes. The MOF's fiscal risk assessment, consisting of the Fiscal Risk Statement (FRS) and the SOE Fiscal Risk Report, suffers from data lags, duplication, and a lack of focus on macro-critical enterprises.

Additionally, the IMF noted that institutional responsibilities for SOE financial oversight are split between the MOF and the State Interest and Governance Authority (SIGA), leading to overlapping functions and fragmented reporting, which hinder efficient fiscal risk management. The Fund also pointed out that ownership and governance in Ghana's SOEs have seen progress with the establishment of the legislative framework but highlighted implementation gaps, particularly in the independence and professionalism of Board and CEO appointments.

The IMF expressed concern over the uneven compliance with reporting, audit, and performance contracting requirements, citing significant irregularities in procurement, financial management, and audit follow-up by the Auditor General.