Ghana's SOEs rack up GH¢18.6 billion in financial irregularities in 2024 – IMF report

Ghana’s State-Owned Enterprises (SOEs) recorded financial management irregularities amounting to GH¢18.6 billion, raising concerns about the potential impact of poor financial controls on the country’s public finances.

The figures are contained in a recent International Monetary Fund (IMF) Technical Assistance Report titled “Advancing SOE Fiscal Risks Management, Financial Oversight, Governance, and Investment Implementation,” which relied on data from the 2024 Auditor-General’s Report.

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The report identified outstanding debtors and loans as the largest area of irregularities, amounting to GH¢12.54 billion.

“Outstanding debtors and loans accounted for the largest share at GH¢12.54 billion,” the report stated, noting that the amount included overdue receivables and funds that remain locked up.

Cash irregularities followed with GH¢4.58 billion, involving unsupported payments and revenues that were not properly accounted for.

Contract irregularities amounted to GH¢871.82 million, while procurement-related irregularities stood at GH¢335.27 million.

The Auditor-General also identified GH¢191.6 million in payroll irregularities, GH¢77.06 million in tax violations and GH¢4.5 million in stores irregularities across the state entities.

The IMF said the energy and road construction sectors were among those facing serious financial management and procurement challenges.

It noted that more than 15 percent of payables and 6.4 percent of procurement commitments in the two sectors breached public financial management rules.

“The implications extend beyond the affected entities, as persistent financial weaknesses in strategically important SOEs can ultimately increase government’s fiscal exposure,” the report warned.

The report also cited the Electricity Company of Ghana (ECG) over procurement concerns, referencing a Ghana Audit Service performance audit which found that the company purchased electricity meters valued at US$145 million through 50 contracts without following the Public Procurement Act.

It also raised concerns about unsolicited “take-or-pay” Power Purchase Agreements, which required the country to pay for power generation capacity beyond actual demand.

Meanwhile, in the agriculture sector, the Ghana Cocoa Board (COCOBOD) was also cited for weaknesses in managing its cocoa roads project. The audit found that 87 percent of the contracts were awarded directly without competitive bidding, contributing to high costs and financial pressure.

The IMF has therefore urged the government to tighten oversight and improve corporate governance across state-owned enterprises. It recommended transparent board appointments, stronger coordination between the Ministry of Finance and the State Interests and Governance Authority (SIGA), and closer monitoring of capital investments by SOEs.

ANAS/MA

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