10 SOEs lose GH¢8.8 billion in 2024, ECG accounts for 85% – IMF report

Ghana’s state-owned enterprises (SOEs) recorded a combined net loss of GH¢8.8 billion in 2024, with the Electricity Company of Ghana (ECG) accounting for about 85% of the losses, according to the International Monetary Fund (IMF).

The losses recorded by 10 state-owned companies were equivalent to about 1.0% of Ghana’s Gross Domestic Product (GDP) and represented more than 90% of the total losses recorded by SOEs during the year.

ECG was the largest contributor to the losses, with its loss alone equivalent to about 0.7% of GDP.

The other major loss-making SOEs included the Volta River Authority (VRA), Ghana National Petroleum Corporation (GNPC), Ghana Cocoa Board (COCOBOD), Bui Power Authority, Ghana National Gas Company, Northern Electricity Distribution Company (NEDCo), Ghana Ports and Harbours Authority (GPHA), Consolidated Bank Ghana (CBG) and Ghana Grid Company (GRIDCo).

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The IMF identified high financing costs and heavy debt burdens as major factors affecting the financial performance of state-owned companies.

According to the Fund, SOEs incurred combined financing costs of GH¢9.4 billion in 2024, nearly six times their Earnings Before Interest and Tax (EBIT) of GH¢1.57 billion.

“Aggregate financing costs reached GH¢9.4 billion in 2024 - nearly six times the Earnings before Interest and Tax of GH¢1.57 billion,” the IMF stated citing data from the 2024 Auditor-General's Report.

Much of the financing burden was concentrated among highly indebted entities, particularly Ghana Water Company Limited (GWCL), COCOBOD and companies operating in the energy sector.

The IMF said this concentration meant that the government could significantly reduce SOE losses by focusing reforms on a relatively small number of financially distressed entities.

Beyond debt, the Fund identified deeper structural challenges affecting the commercial viability of some SOEs. These include tariffs that do not fully cover operating costs, unfunded public-service obligations and difficult market conditions.

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However, the IMF noted that not all state-owned companies were struggling, with some continuing to perform relatively well.

The Fund said the performance of these entities demonstrated that stronger commercial discipline and supportive government policies could improve the financial health of state-owned enterprises.

The findings highlight the growing fiscal risks posed by underperforming SOEs, particularly ECG and other heavily indebted entities, and reinforce calls for targeted reforms to reduce the financial burden on the state.

DR/MA

Ghana will not borrow simply because financing is available – Dr Ato Forson