IMF identifies political appointments as major weakness in key SOEs

The International Monetary Fund (IMF) has identified the politicisation of board and executive appointments as a major weakness undermining the governance and performance of Ghana’s state-owned enterprises (SOEs).

In its July 2026 Technical Assistance Report on Ghana’s SOEs, the IMF said appointments to the boards and top management of major state-owned entities remain heavily influenced by political considerations, despite efforts to establish a merit-based system.

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The report noted that “board and CEO appointments remain highly politicised, with active politicians and high-level officials occupying many board seats”, a situation it said undermines the independence and professionalism of SOE boards.

According to the IMF, Ghana has established a framework intended to make the nomination of directors and chief executives more transparent and merit-based.

However, it said the system is still at an early stage of implementation, with appointments in practice remaining “highly political and centralised in the Presidency”.

The IMF specifically cited the Ghana Ports and Harbours Authority (GPHA) and the Volta River Authority (VRA) as examples.

“Boards of major SOEs are largely dominated by political appointees, with board chairs frequently being ministers, members of parliament, or prominent party officials,” the report stated.

It added that GPHA’s newly inaugurated 10-member board was chaired by the national chairman of the governing party, while the VRA board also included prominent politicians alongside technocrats and a traditional leader.

The Fund said such arrangements represent a significant departure from international corporate governance standards, which discourage active politicians from serving on SOE boards and emphasise independent and professional board membership.

CEO appointments

The IMF also raised concerns about the manner in which chief executives of SOEs are appointed.

It said CEO appointments remain largely political, with boards having limited influence over the process.

“The CEO (or Managing Director) is typically appointed by the President, often in consultation with the relevant minister, rather than selected and appointed by the SOE board through a competitive process,” the report said.

The IMF warned that this arrangement weakens the accountability relationship between boards and management.

According to the report, the situation could discourage boards from challenging management decisions and may create incentives for CEOs to respond more to political authorities than to the boards responsible for overseeing their performance.

IMF calls for merit-based appointments

The IMF has consequently recommended that Ghana introduce a merit-based selection process for SOE boards and executive management, beginning with enterprises considered critical to the economy.

It also called for a gradual reduction in the number of active politicians and high-level government officials serving on SOE boards.

The report recommends that the government “progressively reduc[e] the number of active politicians on SOE boards and replac[e] them with independent professionals and sector experts.”

It further called for the full implementation of Ghana’s Code of Corporate Governance, including mandatory board charters, codes of ethics, annual evaluations and training.

The IMF said systematic disclosure of board and committee structures, attendance and evaluation findings should also be enforced and included in annual reports and published on the websites of SOEs.

The concerns over governance come against a backdrop of significant financial challenges facing Ghana’s SOE sector.

The IMF reported that aggregate SOE liabilities rose from GH¢35 billion in 2015 to GH¢282 billion in 2024, equivalent to about 25 per cent of GDP.

It identified the Electricity Company of Ghana (ECG), VRA and Ghana Cocoa Board (COCOBOD) among the entities posing the greatest fiscal risks.

The report said Ghana’s SOE portfolio recorded aggregate net losses of GH¢9.7 billion in 2024, despite total revenues rising to GH¢133 billion.

The IMF argued that persistent financial underperformance, combined with weak corporate governance, political interference and insufficient enforcement of existing rules, continues to expose public finances to significant risks.

It said three systemic weaknesses remain particularly important: “politicised appointments, insufficient separation of ownership and policy roles, and weak SOE transparency.”

“Active political representation on boards undermines independence and professionalism of SOE boards,” the report stated.

The IMF said addressing these weaknesses would require Ghana to operationalise its merit-based nomination framework, reduce political representation on boards, enforce the Corporate Governance Code and strengthen disclosure requirements.

The recommendations form part of the IMF’s broader call for Ghana to improve SOE governance, strengthen fiscal risk management and ensure that state-owned enterprises deliver sustainable value to the economy and public finances.

Read the full report below

NA/BAI