State-Owned Enterprises (SOEs) have recorded approximately GH¢18.6 billion in financial management irregularities.

This was contained in the IMF’s Technical Assistance Report, “Advancing SOE Fiscal Risks Management, Financial Oversight, Governance, and Investment Implementation”, which highlights financial controls and the potential fiscal risks these entities pose to  government.

The irregularities which are referenced from the 2024 Report of the Auditor-General span several areas, with outstanding debtors and loans accounting for the largest share at GH¢12.54 billion.

This includes overdue receivables and funds that remain locked up.

Another GH¢4.58 billion relates to cash irregularities, including unsupported payments and revenues that were not properly accounted for.

Contract irregularities amounted to about GH¢871.82 million, while procurement 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 irregularities, and GH¢4.5 million in stores irregularities.

Energy, roads sectors

The IMF report identifies the energy and roads construction sectors among those with significant financial and procurement weaknesses.

It notes that more than 15 percent of payables and 6.4 percent of procurement commitments in these sectors were found to be in breach of public financial management regulations or statutory requirements.

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

ECG procurement, power contracts

The Electricity Company of Ghana (ECG) is highlighted for procurement and contractual weaknesses.

A performance audit by the Ghana Audit Service found that ECG purchased electricity meters valued at about US$145 million through 50 contracts without complying with the Public Procurement Act.

The IMF report also points to unsolicited “take-or-pay” Power Purchase Agreements, which contributed to generation capacity exceeding actual national demand.

Such arrangements have created financial obligations that continue to put pressure on the energy sector and public finances.

COCOBOD procurement

The Ghana Cocoa Board (COCOBOD) is also cited over weaknesses in procurement and project management.

The report references an audit which found that 87 percent of contracts under COCOBOD’s cocoa roads investment portfolio were directly awarded without competitive tendering.

It further identifies weaknesses in project costing and contract management, which contributed to additional financial pressures.

These findings come as Ghana continues to grapple with fiscal risks associated with its state-owned enterprises, particularly entities with significant liabilities and persistent losses in the energy and commodity sectors.

The IMF is therefore advocating stronger financial oversight, improved governance and closer monitoring of SOE-related fiscal risks.

Among its recommendations are stronger board appointment practices, better coordination between the Ministry of Finance and the State Interests and Governance Authority, and improved oversight of investments undertaken by state-owned enterprises.