## tarea2026073 ## Source details **Canonical URL:** [tarea2026073](https://www.imf.org/-/media/files/publications/tar/2026/english/tarea2026073.pdf) ## Other formats - [Markdown version](/-/media/files/publications/tar/2026/english/tarea2026073.pdf.md) - [Structured JSON version](/-/media/files/publications/tar/2026/english/tarea2026073.pdf.json) --- ### Preface: mission and engagement - Mission dates: visited Accra between November 24 and December 5, 2025. - Purpose: targeted capacity building in reviewing financial performance of state-owned enterprises (SOEs), applying fiscal risks management tools, and analyzing institutional arrangements for SOE oversight; analyzed the role of SOEs in implementing infrastructure investments, and related processes. - Mission leadership and team: - Led by Ms. Natalie Manuilova (FAD). - Team: Mr. Ed Hearne (FAD), Ilyas Tufan (AFRITAC West 2 Public Finance Management Advisor), Mr. Philip Barry and Mr. Edgar Sishi (FAD short-term experts). - Principal counterparts and meetings: Ministry of Finance (MOF) senior officials, State Interests and Governance Authority (SIGA) divisions, Ministry of Energy, Audit Service senior auditors, and key SOEs including ECG, COCOBOD, GPHA, VRA, Ghana Gold Board (GoldBod). - Acknowledgements: special thanks to Ms. Doris Dzidzornu (MOF) and Mr. Adrian Alter, IMF Resident Representative, and team. ### Executive summary: progress, challenges, and fiscal implications - Governance and transparency progress: - Adoption of the SOE Ownership Policy, the Corporate Governance Code, and standardized financial reporting requirements. - Establishment of SIGA in 2019 for centralized and professional state ownership; expansion of performance contracts and regular evaluations. - MOF increased role in SOE financial oversight: authorizing capital injections, borrowing, and investments; developing annual fiscal risk assessments for SOEs. - External audits required; SOEs must submit annual audited financial statements and performance reports to SIGA and MOF. - Portfolio scale and evolution: - Total SOE assets fluctuating around one third of GDP. - SOE liabilities: rose from GHS 35 billion (19 percent of GDP) in 2015 to GHS 282 billion (about 25 percent of GDP) in 2024. - SOE revenues: increased from GHS 19 billion (2015) to GHS 133 billion (2024). - Net losses: fluctuated around 1 percent of GDP between 2016 and 2024; net losses in 2024 amounted to 0.8 percent of GDP. - Concentration and high-risk entities: - ECG, VRA and COCOBOD concentrate assets and liabilities and are in the highest-risk category. - Performance and structural weaknesses: - Overall SOE financial performance has not improved materially despite reforms. - Energy and commodity-sector SOEs are principal sources of fiscal strain: arrears accumulation, liquidity constraints, non-cost-reflective tariffs, foreign-currency debt financing costs, and persistent QFAs. - Fiscal risk assessment and institutional arrangements: - MOF strengthened fiscal risk assessment practices but faces challenges with timeliness, data completeness, and integration. - Two parallel MOF reports (FRS and SOE Fiscal Risk Report) are complementary but sometimes duplicative; SOE report suffers data lags and lack of focus on macro-critical enterprises. - Lack of information on QFAs obscures the true fiscal cost of SOE operations. - Institutional responsibilities split between MOF and SIGA, creating overlaps and fragmented reporting. ### Key policy recommendations (summary of objectives and instruments) - Fiscal risk management and reporting: - Prioritize fiscal risk analysis of macro-critical and high-risk SOEs. - Prepare and publish the Fiscal Risk Statement (FRS) in time to inform the budget process and include it in the Medium Term Expenditure Framework or in the Budget Package. - Develop templates for macro-critical SOEs to report all fiscal flows and identify/report QFAs; implement digital mechanism for timely SOA reporting exchange with SIGA. - Develop models for assessing fiscal risks from financial sector entities with sector-specific financial ratios. - Introduce forward-looking analysis for key macro-critical SOEs. - Build MOF staff capacity in SOE financial analysis and fiscal risk assessment (continuous). - Ownership, governance, and accountability: - Undertake SOE sectorization and re-classify entities; conduct GFSM sectorization exercise. - Review the State Ownership Policy (SOP) and evaluate policy alignment of each entity. - Design and introduce merit-based selection processes for SOE boards and executive management, starting with macro-critical SOEs. - Develop a plan to progressively reduce active politicians and high-level officials on SOE boards. - Strengthen enforcement of SOE financial reporting and audit requirements; expand performance contracts with measurable financial sustainability metrics; mandate disclosure of board and committee structures. - Infrastructure governance and investment management: - Ensure all major SOE projects are subject to independent assurance to assess risks, validate cost and schedule estimates, and review planned benefits. - Include SOE investment plans and project targets in SIGA and MOF strategic plans and performance reviews. - Require major infrastructure SOEs to publish annual investment plans for new, ongoing, and maintenance projects, including funding sources. - Align SOE investment plans with fiscal and financial constraints; introduce medium-term investment planning and reinforce project assurance and procurement compliance. - Data, tools, and interoperability: - Improve timeliness of the FRS and align it with the budget cycle. - Introduce standardized templates for SOE reporting on QFAs, arrears strategies, and key governance actions. - Improve data exchange and analytical tools, including wider use of the IMF’s SOE Health Check Tool and establishing direct digital data exchange channels between SIGA and MOF. ### Extracted numerical commitments and deadlines (as provided) - Recommendation 1: Prioritize fiscal risks analysis of macro-critical and high risks SOEs — Responsible: MOF — Deadline: September 2026. - Recommendation 2: Prepare and publish FRS in time to inform the budget process and include it in the Medium Term Expenditure Framework or in the Budget Package — Responsible: MOF — Deadline: October 2026. - Recommendation 3: Develop templates for macro-critical SOEs to report on all fiscal flows to and from the budget, and to identify and report on QFAs. Implement digital mechanism to ensure timely SOE reporting exchange with SIGA — Responsible: MOF, SIGA — Deadline: September 2026. - Recommendation 4: Develop models for assessing fiscal risks from financial sector entities tailored to sector specific financial ratios — Responsible: MOF — Deadline: September 2026. - Recommendation 5: Introduce forward-looking analysis for key macro-critical SOEs — Responsible: MOF — Deadline: October 2026. - Recommendation 6: Build the MOF staff capacity in analyzing SOEs’ financial performance, fiscal risks and providing input to the ownership level decision-making — Responsible: MOF — Timeline: continuous. - Recommendation 7: Review the SOE portfolio, re-classify all entities to appropriate categories. Conduct GFSM sectorization exercise — Responsible: MOF, SIGA — Deadline: December 2026. - Recommendation 8: Review the SOP and critically evaluate the Policy alignment of each entity, prepare grounds for policy decisions — Responsible: MOF, SIGA — Deadline: December 2026. - Recommendation 9: Design and introduce merit-based selection process for SOE Boards and Executive Management, starting with macro-critical SOEs — Responsible: MOF, SIGA — Deadline: December 2026. - Recommendation 10: Develop a plan to progressively reduce the number of active politicians and high level officials on SOE boards — Responsible: SIGA — Deadline: December 2027. - Recommendation 11: Ensure that all major projects by SOEs are subject to independent assurance to assess risks, validate cost and schedule estimates and review planned benefit — Responsible: MOF, SIGA — Deadline: December 2026. - Recommendation 12: Include SOE investment plans and project targets in the strategic plans and performance reviews by SIGA and MOF — Responsible: MOF, SIGA — Deadline: December 2026. - Recommendation 13: Require major infrastructure SOEs to publish annual investment plans for new, ongoing, and maintenance projects, and their funding sources — Responsible: MOF, SIGA — Deadline: December 2026. ### SOE landscape and aggregated statistics (2024 and related years) - SIGA register (as of 2024): 175 Specified Entities. - State-Owned Enterprises (SOEs) – 53 entities. - Joint Venture Companies (JVCs) – 47 companies. - Other State Entities (OSEs) – 75 entities. - Coverage in the 2024 State Ownership Report: 152 specified entities (54 SOEs, 30 JVCs, 68 OSEs). - Aggregate SOE financials (2024): - Total revenue generated by SOEs: GHS 133.7 billion (11.5 percent of GDP). - Total assets: GHS 395 billion (fluctuated around 34 percent of GDP). - Total liabilities: GHS 282 billion (about 25 percent of GDP). - Liabilities growth: from GHS 35 billion (19 percent of GDP) in 2015 to GHS 282 billion (about 25 percent of GDP) in 2024. - Concentration: - SOEs accounted for approximately 60 percent of total revenues and 51 percent of total assets across all specified entities. - Sector shares of total SOE assets: Energy 61.9 percent; Financial & Allied Services 13.5 percent; Agriculture 9.4 percent; Transport & Logistics 9.0 percent. - A small number of systemically important enterprises (VRA, ECG, GNPC, COCOBOD) account for the majority of the sector’s GHS 395 billion assets and GHS 282 billion liabilities. - Top 10 SOEs hold around 85 percent of total SOE assets and liabilities. ### Aggregate performance, leverage, and finance costs (2021–2024) - Total SOE revenue: GHS 56 billion in 2021 → GHS 133 billion in 2024. - Aggregate SOE net losses: GHS 1.7 billion in 2021 → GHS 9.7 billion in 2024. - Net losses in 2024: 0.8 percent of GDP. - SOE sector recorded aggregate losses for five consecutive years through 2024. - Aggregate financing costs: GHS 9.4 billion in 2024. - Aggregate Earnings before Interest and Tax (EBIT): GHS 1.57 billion in 2024. - Aggregate financing costs were nearly six times aggregate EBIT in 2024. - SOE sector’s aggregate debt-to-asset ratio: 0.71 in 2024 (from 0.70 in 2023). - Ten largest SOEs account for roughly 85 percent of sector liabilities. ### Concentration of revenues and losses (2024) - ECG, VRA, GNPC, COCOBOD, BPA, GNGC, NEDCo, GPHA, CBG and GRIDCo generated almost 80 percent of total SOE revenue in 2024. - These entities collectively recorded a net loss of GHS 8.8 billion in 2024, around 1 percent of GDP, representing over 90 percent of total SOE net losses. - ECG alone contributed 85 percent of the aggregated losses made by SOEs in 2024, equivalent to 0.7 percent of GDP. ### Deep dive — ECG (Electricity Company of Ghana Ltd.) 2024 key facts - Service scope: serves about 80 percent of the country’s population and handles over 90 percent of power purchased for resale. - 2024 financials and ratios: - Total assets: GHS 76.25 billion - Equity: GHS 5.25 billion - Operating revenue: GHS 36.1 billion - Net loss: GHS 8.3 billion in 2024 - Net margin: –22.8 percent - Return on assets: –9.7 percent - Return on equity: –157 percent - Trade and other payables: GHS 54.5 billion - Bank overdrafts, commercial loans, external loans and on-lending: around GHS 5.4 billion - Operational issues: - Around 40 percent of energy fed into its network is effectively unbilled or uncollected. - Government payments recognized as revenue (grants) totaled about GHS 19.7 billion in 2024 (almost half of ECG’s reported revenue). - Cumulative losses of around GHS 26 billion over the last three years. - Significant FX exposure from FX-linked PPAs and FX‑denominated debt. - Governance and reform prescriptions: - Treat ECG as high-risk; enhanced oversight; time-bound operational restructuring with clear milestones on tariff policy, loss reduction, revenue collection, debt and arrears restructuring, and corporate reorganization. - Cash Waterfall Mechanism (CWM) introduced and improved sector situation; five-year financial model and restructuring concept prepared but implementation early-stage. ### Deep dive — COCOBOD - Financial trajectory and risks: - Total liabilities: GHS 14.7 billion in 2020 → GHS 28.5 billion in 2022; payables dominated liabilities. - Turnaround in profitability in 2023 reduced total liabilities by GHS 4 billion. - Debt-to-assets ratio around 90 percent. - 2023 deterioration drivers: sharp decline in cocoa output, surge in producer prices, adverse hedging outcomes and overhedging. - Policy implication: close MOF monitoring required; strengthen COCOBOD risk management. ### SOE risk classification (SOE Health Check Tool — HCT) — sampled 14 SOEs (2023→2024) - ECG: Category 5 → Category 4 - VRA: Category 3 → Category 3 - COCOBOD: Category 3 → Category 3 - GNGC: Category 3 → Category 4 - BPA: Category 3 → Category 3 - GACL: Category 3 → Category 4 - GPHA: Category 2 → Category 2 - BOST: Category 3 → Category 3 - SHC: Category 2 → Category 3 - Ghana Post: Category 4 → Category 3 - PSC: Category 3 → Category 2 - NAFCO: Category 4 → Category 4 - GPCL: Category 3 → Category 2 - GRIDCO: Category 4 → Category 4 - Majority of sampled SOEs fall in Categories 3 to 4 (moderate to elevated risk). ### SOE liabilities, FX exposure and finance-cost drivers - Much of SOE debt is foreign-currency denominated or carries implicit government backing. - Energy SOEs have extensive USD-indexed PPAs backed by government guarantees, magnifying FX and refinancing risks. - Finance costs in 2024: GHS 9 billion–GHS 9.4 billion range reported across sections; COCOBOD and GWCL together account for well over half of aggregate SOE finance costs. - Concentration of liabilities in a few large utilities and commodity-related SOEs increases vulnerability to sector-specific shocks and FX volatility. ### Incomplete identification and disclosure of SOE–government financial relationships - Fragmented/missing information on settlement of arrears, tax expenditures, QFAs, policy-driven pricing arrangements, guarantees, and budget revenues (taxes/dividends). - Consequence: limited ability to assess net fiscal cost and exposures comprehensively; fiscal support scale and timing partially obscured. - QFAs are not systematically identified, quantified, or disclosed; examples include below-cost electricity tariffs, delayed/non‑payment by public institutions, COCOBOD’s exchange-rate and price risk absorption. - IMF guidance: Fiscal Transparency Code and Fiscal Transparency Evaluation emphasize identification, disclosure and quantification of QFAs. ### Fiscal risks reporting framework: current reports and limitations - MOF produces two reports: Fiscal Risks Statement (FRS) by the Fiscal Risks Unit and a detailed SOE Fiscal Risks Report by the Public Entities Unit. - FRS: inaugural comprehensive Statement released March 2019; annual preparation claimed but unpublished since 2019; 2024 draft FRS under internal review and analyzes macroeconomics, SOEs and other fiscal risks. - SOE Fiscal Risks Report: Annual detailed analysis; 2023 report covers 67 entities over 2018–2022; 2024 report preparation ongoing. Key limitations: data lag (two-year gap), limited forward-looking analysis, methodological gap for financial sector SOEs. - Dual reporting: advantages (timely overview vs granular insights) but suffers from duplication and lack of integration; data lags reduce relevance to budget process. ### Priority recommendations to strengthen fiscal risks analysis and oversight - Make SOE Fiscal Risks Report a key input to the FRS and finalize FRS alongside the annual budget package. - Prioritize monitoring of a select group of macro-critical SOEs (suggested: ECG, COCOBOD, VRA, GNPC, GWCL, CBG). - Develop tailored analytical frameworks and reporting templates for financial SOEs to capture banking/insurance metrics and implicit guarantees. - Identify and discuss risk mitigation measures strategically at portfolio level and for macro-critical SOEs. - Introduce forward-looking analysis: scenarios and stress testing for priority/high-risk SOEs. ### MOF and SIGA institutional roles, overlaps and coordination - Legal basis: PFM Act (2016) and SIGA Act (2019) allocate responsibilities; MOF has primary responsibility for macro-fiscal implications and fiscal risk monitoring; SIGA is central ownership entity tasked with governance enforcement and performance monitoring. - Overlaps: - Both MOF and SIGA collect SOE financial statements and perform analysis with complementary objectives; oversight and authorization often overlap (e.g., guarantees, borrowing approvals). - Internal MOF structure: of 14 main MOF divisions, at least five have direct SOE responsibilities, creating overlaps. - Recommendations: - MOF should lead on financial matters affecting public finances; set financial reporting standards with SIGA; maintain accurate register of contingent liabilities and scenario analysis. - Improve MOF–SIGA coordination via data‑sharing protocols, standardized reporting templates, and integrated reporting platforms. ### Governance, appointments, and board practices - Code of Corporate Governance (2023): requires board composition, independence, gender balance, audit responsibilities, risk management and disclosure; SOP mandates SIGA Nomination Framework and governance training. - Appointment practice: board members appointed by the President for 3–5 year terms; CEO appointments typically by the President rather than boards; appointment processes remain highly politicized. - Consequences: weakened board independence and accountability; boards play limited role in CEO selection/dismissal. - Board composition and diversity: - Women occupy about 25.9 percent of board positions; female heads of entities are 17.7 percent in 2024. - Many boards lack board charters, codes of ethics; only about one third of SOEs report having a code of ethics or gender policy. - Board committees: expected audit committees and additional committees encouraged; compliance varies; PFM Act requires five‑member Audit Committees with a majority independent members. - Implementation gaps: politicized appointments, insufficient separation of ownership and policy roles, weak enforcement of the Code. ### SOE reporting, audit and compliance (2024 snapshots) - Legal requirement: financial statements prepared in accordance with IFRS; submission for audit no later than four months after financial year-end. - 2024 compliance: - Audited financial statements compliance across entity types: 24–30 percent of entities. - Proportion signing performance contracts (2024): 74 out of 175 specified entities. - Quarterly reporting compliance: Commercial SOEs 74 percent; Joint ventures and OSEs about one third. - Table 3 (selected entries): - Commercial SOEs — Audited Financial Statements: 11 (29%); Management Statements: 19 (50%); Signed Performance Contracts: 29 (76%); Quarterly Reports Fully Submitted: 28 (74%). - Dual Commercial & Public Policy Mandate SOEs — Audited Financial Statements: 3 (30%); Management Statements: 5 (50%); Signed Performance Contracts: 6 (60%); Quarterly Reports Fully Submitted: 6 (60%). - Joint Venture Companies — Audited Financial Statements: 5 (25%); Management Statements: 10 (50%); Signed Performance Contracts: 6 (30%); Quarterly Reports Fully Submitted: 6 (30%). - Other State Entities (Regulators and Information Agencies) — Audited Financial Statements: 19 (24%); Management Statements: 42 (53%); Signed Performance Contracts: 32 (40%); Quarterly Reports Fully Submitted: 29 (36%). - Other State Entities (Special Purpose Vehicles) — Audited Financial Statements: 2 (29%); Management Statements: 4 (57%); Signed Performance Contracts: 1 (14%); Quarterly Reports Fully Submitted: 1 (14%). - Reported irregularities (Table 4, 2024 Auditor General): - Outstanding debtors & loans — Amount (GHS): 12.54 billion. - Cash irregularities — Amount (GHS): 4.58 billion. - Contract irregularities — Amount (GHS): 871.82 million. - Procurement irregularities — Amount (GHS): 335.27 million. - Payroll irregularities — Amount (GHS): 191.6 million. - Tax irregularities — Amount (GHS): 77.06 million. - Stores irregularities — Amount (GHS): 4.5 million. - Observation: audit findings often not followed by timely corrective actions; delays in finalizing audited accounts and recurring qualified audit opinions for ECG, COCOBOD, VRA. ### Infrastructure governance, investment planning and project assurance - Alignment with national strategy: - Ghana Infrastructure Plan (GIP) sits within National Development Plan; SOE investments generally within planning exercises but often aspirational and unconstrained by resources. - SIGA mandated to evaluate strategic plans but no evidence SIGA systematically evaluates SOE investment plans for alignment with national strategy. - Market structure and regulation: - PURC is multi-sector regulator (electricity and water) using Regulated Asset Base model; key transport SOEs often unregulated. - Electricity tariffs consistently set below cost recovery; many PPAs are “take-or-pay”. - Project preparation and appraisal: - PIM Regulations: pre-feasibility and full feasibility required for projects > USD 5 million. - Compliance with appraisal requirements unclear; appraisals not published. - Funding and risk management: - Borrowing, PPPs and guarantees require MOF approval but historically not always adhered to; large PPPs concentrated in GPHA. - Example megaprojects and costs: - GPHA Takoradi Ship Repair Facility — Cost: 100 (USD million). - GPHA Tema LNG Terminal — Cost: 350 (USD million). - GPHA Takoradi Integrated Terminal — Cost: 210 (USD million). - Ghana Water Ltd Teshie Nungua Desalination — Cost: 125 (USD million). - GPHA Tema Terminal 3 — Cost: 1,500 (USD million). - GPHA Takoradi Bulk Terminal — Cost: 65 (USD million); concessionaire outstanding Upfront Fee $6.8 million. - GPHA Inland Container Terminal — Cost: 70 (USD million); concessionaire owes GHC 16 million. - Ghana Railway Authority projects in preparation: combined value over USD 4.5 billion. - Project assurance and approval: - PIPWC reviews government-funded/debt/PPP projects; about 19 percent of investment projects reviewed by PIPWC originate from SOEs; close to 60 percent approved. - Procurement and contracting weaknesses: - High share of direct awards and restricted tendering; notable examples: - ECG “take-or-pay” contracts and unsolicited generation capacity. - COCOBOD direct-awarded 87 percent of COCOROADS contracts. - ECG purchased meters valued at USD 145 million via 50 contracts without adherence to Public Procurement Act. ### Project and portfolio management, maintenance and asset registry - Essential elements: clear governance, qualified project teams, decision-making authority aligned to size, specialist commercial/engineering capability, gateway reviews, formal change-control, portfolio oversight, and timely contract payments. - Maintenance benchmark: minimum routine maintenance cost in range of 2–3 percent of replacement values. - Finding: routine maintenance spending for main infrastructure SOEs is far below 2–3 percent of replacement cost, contributing to high technical losses and service interruptions. - Recommendations (numbered in source): - 11. Ensure independent assurance for all major SOE projects (MOF, SIGA, December 2026). - 12. Include SOE investment plans and project targets in SIGA and MOF strategic plans and performance reviews (MOF, SIGA, December 2026). - 13. Require major infrastructure SOEs to publish annual plans for new, ongoing, and maintenance projects and funding sources (MOF, SIGA, December 2026). ### Annex I — QFA Reporting Template (key elements excerpt) - Purpose: identify and quantify QFAs; recommended regular reporting for critical SOEs. - Sections include: - A. Basic Information (Reporting Entity; Sector; Reporting Period; Government Directive? Yes / No / Implicit; Legal / Policy Basis). - B. Identification of Potential QFAs (questions on below-cost goods/services, administered prices, below-market credit, non-commercial risk bearing, uncompensated activities). - C. Description of the QFA (type, beneficiary, policy objective, compensation status). - D. Quantification Method with formulas: - Price or Service QFA: QFA Cost = (Benchmark Price – Actual Price) × Quantity Supplied. - Credit QFA: QFA Cost = (Market Interest Rate – Applied Rate) × Outstanding Loan Balance. - Risk Absorption / Guarantees: QFA Cost = Probability of Default × Loss Given Default. - Output fields: Gross QFA Cost; Budget Compensation; Net QFA Cost. - E. Fiscal Risk Assessment: Predictability: Low / Medium / High; Contingent Liability: Yes / No; Impact on Entity Financial Viability: Low / Medium / High; Potential Budget Impact: Low / Medium / High. - F. Accounting and Reporting Treatment: Recorded in Budget? Yes / No; Reflected in SOE Financial Statements? Yes / No; Disclosed in Fiscal Risk Statement? Yes / No; GFSM Treatment: Subsidy / Transfer / Capital Injection. ### Annex II & III highlights (country examples and dividend policy) - Annex II: country FRS examples (Zambia, Georgia, Mongolia) emphasize anchoring FRS in budget, systematic SOE coverage, quantification of risks and scenario analysis. - Annex III: dividend policy options and international practice; recommendation for Ghana to consider a fixed-rate dividend policy requiring profitable SOEs to pay a minimum range between 30 and 50 percent of net profit over a 3–5‑year period to balance revenue needs and SOE sustainability. ### Annex IV — SOE Ownership Policy Review (executive findings) - SOP: advanced on governance but weaker on fiscal integration. - Main opportunity: strengthen MOF–SIGA coordination; timely SOE financial data exchange; systematic QFA identification and quantification; link SOE oversight to MOF fiscal risk analysis and budget processes. - Alignment assessment (selected): - State’s Role as Owner: Aligned. - Centralization of Ownership Function: Aligned. - Role of MOF: Gap vs. IMF. - Financial Oversight & Fiscal Risks: Gap vs. IMF. - QFAs: Gap vs. IMF. - Board Governance & Appointments: Aligned. - Performance Monitoring: Partially aligned. - Transparency & Disclosure: Aligned. - Debt, Guarantees & Contingent Liabilities: Gap vs. IMF. - Integration with Budget Process: Gap vs. IMF. - Policy priorities: - Strengthen MOF–SIGA coordination and data exchange. - Embed QFA and implicit guarantee disclosure and quantification. - Explicitly integrate SOE financial plans, borrowing, guarantees and contingent liabilities into MOF fiscal risk and medium-term frameworks. - Enhance performance contracts with financial sustainability metrics and fiscal risk thresholds. - Improve board composition and de-politicize appointments. - Advance aggregated SOE reporting, foreign‑exchange risk disclosure and stress testing; publish comprehensive SOE fiscal risk statement linked to budget documentation. *IMF Technical Assistance Report — Preface and Executive Summary, tarea2026073* ### Preface ................................................................................................................ ### tarea2026073 - Preface ### Preface: mission and engagement - Mission dates: visited Accra between November 24 and December 5, 2025. - Purpose: targeted capacity building in reviewing financial performance of state-owned enterprises (SOEs), applying fiscal risks management tools, and analyzing institutional arrangements for SOE oversight; analyzed the role of SOEs in implementing infrastructure investments, and related processes. - Mission leadership and team: - Led by Ms. Natalie Manuilova (FAD). - Team included Mr. Ed Hearne (FAD), Ilyas Tufan (AFRITAC West 2 Public Finance Management Advisor), Mr. Philip Barry and Mr. Edgar Sishi (FAD short-term experts). - Principal counterparts and meetings: - Ministry of Finance (MOF): Coordinating Director Mr. David Klotey Collison; Head of the Public Entities Unit Mr. Kwame Adu Okyere-Mensuo; Head of SOEs and JVCs Ms. Doris Dzidzornu; Head of Institutional Reforms and SOEs Ms. Rahinatu Abdul-Rahman; MOF Public Investment and Assets Division team; plus Research Division, Public Debt Management Office, Budget Office, Real Sector Division. - State Interests and Governance Authority (SIGA): Head of Governance Risk and Compliance Division Mr. Eric Opoku; Head of Performance Monitoring and Evaluation Division Mr. Alfred Agorbia. - Other government and oversight bodies: Ministry of Energy Director Mr. Hanson Manny; Audit Service’s Assistant Auditors-General Mr. Paul Afram and Mr. Kwadwo Kyeremeh. - Key SOEs consulted: Electricity Company of Ghana Ltd (ECG), Ghana Cocoa Board (COCOBOD), Ghana Ports and Harbours Authority (GPHA), Volta River Authority (VRA), Ghana Gold Board (GoldBod). - Development partners: Mr. Charles Abbey (SECO), Ms. Ashwini Sebastian and Mr. Andrei Busuioc (World Bank), Mr. Ahu Aminu (GIZ Ghana). - Acknowledgements: special thanks to Ms. Doris Dzidzornu (MOF) for assistance and coordination, and to Mr. Adrian Alter, IMF Resident Representative, and team for guidance and administrative support. ### Executive Summary: progress, challenges, and fiscal implications - Governance and transparency progress: - Adoption of the SOE Ownership Policy, the Corporate Governance Code, and standardized financial reporting requirements. - Establishment of SIGA in 2019 for centralized and professional state ownership; SIGA works with line ministries to expand performance contracts and regular evaluations. - MOF has increased role in SOE financial oversight: authorizing capital injections, borrowing, and investments; developing annual fiscal risk assessments for SOEs. - External audits (Auditor-General or private firms) are standard; SOEs required to submit annual audited financial statements and performance reports to SIGA and MOF. - SOE portfolio scale and evolution: - Total SOE assets fluctuating around one third of GDP. - SOE liabilities rose from GHS 35 billion (19 percent of GDP) in 2015 to GHS 282 billion (about 25 percent of GDP) in 2024. - SOE revenues increased from GHS 19 billion (2015) to GHS 133 billion (2024). - Net losses for the SOE portfolio fluctuated around 1 percent of GDP between 2016 and 2024. - Concentration and high-risk entities: - Assets and liabilities concentrated with three entities: Electricity Company of Ghana Ltd (ECG), Volta River Authority (VRA), and Ghana Cocoa Board (COCOBOD) — together account for the largest share of aggregate liabilities and are in the highest-risk category. - Performance and structural weaknesses: - Despite reform efforts, overall SOE financial performance has not improved materially. - Energy and commodity-sector SOEs are principal sources of financial strain, with arrears accumulation, liquidity constraints, and non-cost-reflective tariffs contributing to fiscal pressures. - Financing costs of foreign currency denominated debts contribute to losses for some SOEs. - Persistent quasi-fiscal activities (QFAs) and weak enforcement of hard budget constraints remain largely unaddressed. - Fiscal risk assessment and institutional arrangements: - MOF has strengthened fiscal risk assessment practices but faces challenges with timeliness, data completeness, and integration of processes. - Two parallel MOF reports exist: the Fiscal Risk Statement (FRS) and the SOE Fiscal Risk Report; analyses are complementary but sometimes duplicative, with the SOE report suffering from data lags and lack of focus on macro-critical enterprises. - Lack of information on QFAs obscures the true fiscal cost of SOE operations. - Institutional responsibilities split between MOF and SIGA, creating overlapping functions and fragmented reporting. - Ownership and governance implementation gaps: - Legislative framework exists, but implementation gaps persist. - Board and CEO appointments remain highly politicized; active politicians and high-level officials occupy many board seats, undermining independence and professionalism. - Compliance with reporting, audit, and performance contracting requirements is uneven; Auditor General reports significant irregularities in procurement, financial management, and audit follow-up. ### Policy recommendations (summary of objectives and instruments) - Focused fiscal risk management and reporting: - Prioritize fiscal risks analysis of macro-critical and high-risk SOEs; identify and propose risk-mitigation measures for major fiscal risks. - Prepare and publish the FRS in time to inform the budget process and include it in the Medium Term Expenditure Framework or in the Budget Package. - Develop templates for macro-critical SOEs to report on all fiscal flows to and from the budget, and to identify and report on QFAs; implement digital mechanism to ensure timely SOE reporting exchange with SIGA. - Develop models for assessing fiscal risks from financial sector entities tailored to sector specific financial ratios. - Introduce forward-looking analysis for key macro-critical SOEs. - Build MOF staff capacity in analyzing SOEs’ financial performance, fiscal risks, and providing input to ownership-level decision-making. - Ownership, governance, and accountability reforms: - Undertake SOE sectorization and re-classify entities to appropriate categories; conduct GFSM sectorization exercise. - Review the State Ownership Policy (SOP) and critically evaluate policy alignment of each entity to prepare grounds for policy decisions. - Design and introduce merit-based selection processes for SOE boards and executive management, starting with macro-critical SOEs. - Develop a plan to progressively reduce the number of active politicians and high level officials on SOE boards. - Strengthen enforcement of SOE financial reporting and audit requirements; expand use of performance contracts with clear and measurable financial sustainability metrics; mandate systematic disclosure of SOE board and committee structures. - Infrastructure governance and investment management: - Ensure all major projects by SOEs are subject to independent assurance to assess risks, validate cost and schedule estimates, and review planned benefits. - Include SOE investment plans and project targets in strategic plans and performance reviews by SIGA and MOF. - Require major infrastructure SOEs to publish annual investment plans for new, ongoing, and maintenance projects, and their funding sources. - Align SOE investment plans with fiscal and financial constraints; introduce medium-term investment planning by SOEs; reinforce project assurance and oversight mechanisms; improve procurement compliance. - Data, tools, and interoperability: - Improve timeliness of the FRS and align it with the budget cycle so fiscal risks inform budget preparation and parliamentary debate. - Introduce standardized templates for SOE reporting on QFAs, arrears strategies, and key governance actions. - Improve data exchange and analytical tools to reduce duplication and improve timeliness, including wider use of the IMF’s SOE Health Check Tool, dedicated financial sector models, and establishing direct digital data exchange channels between SIGA and MOF. ### Extracted numerical and deadline commitments from Recommendations - Recommendation 1: Prioritize fiscal risks analysis of macro-critical and high risks SOEs — Responsible: MOF — Deadline: September 2026. - Recommendation 2: Prepare and publish FRS in time to inform the budget process and include it in the Medium Term Expenditure Framework or in the Budget Package — Responsible: MOF — Deadline: October 2026. - Recommendation 3: Develop templates for macro-critical SOEs to report on all fiscal flows to and from the budget, and to identify and report on QFAs. Implement digital mechanism to ensure timely SOE reporting exchange with SIGA — Responsible: MOF, SIGA — Deadline: September 2026. - Recommendation 4: Develop models for assessing fiscal risks from financial sector entities tailored to sector specific financial ratios — Responsible: MOF — Deadline: September 2026. - Recommendation 5: Introduce forward-looking analysis for key macro-critical SOEs — Responsible: MOF — Deadline: October 2026. - Recommendation 6: Build the MOF staff capacity in analyzing SOEs’ financial performance, fiscal risks and providing input to the ownership level decision-making — Responsible: MOF — Timeline: continuous. - Recommendation 7: Review the SOE portfolio, re-classify all entities to appropriate categories. Conduct GFSM sectorization exercise — Responsible: MOF, SIGA — Deadline: December 2026. - Recommendation 8: Review the SOP and critically evaluate the Policy alignment of each entity, prepare grounds for policy decisions — Responsible: MOF, SIGA — Deadline: December 2026. - Recommendation 9: Design and introduce merit-based selection process for SOE Boards and Executive Management, starting with macro-critical SOEs — Responsible: MOF, SIGA — Deadline: December 2026. - Recommendation 10: Develop a plan to progressively reduce the number of active politicians and high level officials on SOE boards — Responsible: SIGA — Deadline: December 2027. - Recommendation 11: Ensure that all major projects by SOEs are subject to independent assurance to assess risks, validate cost and schedule estimates and review planned benefit — Responsible: MOF, SIGA — Deadline: December 2026. - Recommendation 12: Include SOE investment plans and project targets in the strategic plans and performance reviews by SIGA and MOF — Responsible: MOF, SIGA — Deadline: December 2026. - Recommendation 13: Require major infrastructure SOEs to publish annual investment plans for new, ongoing, and maintenance projects, and their funding sources — Responsible: MOF, SIGA — Deadline: December 2026. *IMF Technical Assistance Report — Preface and Executive Summary, tarea2026073* ### 1. Ghana’s SOEs play a pivotal role in public service delivery and economic development. ### Ghana’s SOEs play a pivotal role in public service delivery and economic development. ### Overview and persistent challenges - SOEs are central to public service delivery and economic development in Ghana; recent reforms have strengthened governance, financial oversight, and reporting frameworks. - Key persistent challenges: - Ensuring financial sustainability and transparency of SOEs. - Monitoring and managing fiscal risks from SOE operations. - Energy and commodity-sector SOEs remain the principal sources of financial strain and contingent liabilities, with arrears accumulation and liquidity pressures affecting public finances. - Improving timeliness, completeness, and quality of SOE financial data and translating it into actionable fiscal-risk analysis is a core government priority. ### Recent reforms and institutional changes - Since 2017, the Government of Ghana (GoG) has implemented reforms targeting: state ownership model, SOE corporate governance, performance management, financial oversight, fiscal risk management, transparency, and reporting. - SIGA (State Interests and Governance Authority): - Established in 2019 under the State Interests and Governance Authority Act (2019) to consolidate the government’s shareholder role, improve oversight, enforce governance standards, and facilitate annual State Ownership Reports. - Compliance with SIGA standards remains uneven; some entities continue to lag in financial disclosures. - State Ownership Policy: - The 2023 State Ownership Policy sets a framework for the government ownership function, defining ownership rationale, objectives (financial, economic, social), state-shareholding functions, financing rules, and criteria for investment or divestment. - Approved by the Cabinet in 2023, officially launched in April 2024. - Corporate Governance Code: - SIGA developed and introduced a Corporate Governance Code (The Code of Corporate Governance for Specified Entities and Public Service Organizations (PSOs) in Ghana), approved by the Cabinet in 2023, based on OECD SOE Corporate Governance Guidelines (2024) and tailored to Ghana’s legal framework. - Establishes standards for board composition, independence, gender balance, ethical conduct, audit responsibilities, risk management, and disclosure. - Performance-Management Framework: - Introduced by SIGA binding SOEs and specified entities to annually negotiated performance contracts with KPIs covering financial performance, operational efficiency, project delivery, governance compliance, and management standards. - Coverage expanded from 48 entities in 2020 to 70 in 2024. - State Ownership Report: - Prepared annually; consolidates financial, operational, and governance information. - Coverage expanded from 18 to 152 participating entities (transfer of preparation function from MOF to SIGA after 2021). ### Fiscal risk oversight and reporting - MOF fiscal risk work: - MOF established a dedicated Fiscal Risk Unit under the Economic Strategy and Research Unit in 2018. - Ghana’s first comprehensive Fiscal Risk Statement was released in March 2019 as part of a structural benchmark under the IMF program; according to authorities the Statement has been prepared annually but has not been published since 2019. - A more detailed internal Annual SOE Fiscal Risk Report using the IMF SOE Health Check Tool (HCT) has been prepared by the Public Entities Unit since 2022; preparation of the 2024 report is ongoing. ### Technical Assistance Report scope - The report: - Takes stock of reforms to date, notes gains, assesses challenges, and proposes next steps. - Examines SOEs from multiple perspectives: financial performance and institutional responsibilities; ownership policy and governance arrangements; SOE board practices, performance contracts, reporting, audit, and disclosure; and SOEs’ role in infrastructure governance (policy, planning, regulatory structure, investment project assurance, funding, operational delivery). - Aims to support efforts to enhance SOE operational efficiency, increase contributions to the state budget, strengthen fiscal risk management, reduce political interference, and ensure SOEs operate transparently and in the public interest. ### SOE landscape and key statistics (2024 and related years) - SIGA register (as of 2024) included 175 Specified Entities classified as: - State-Owned Enterprises (SOEs) – 53 entities. - Joint Venture Companies (JVCs) – 47 companies. - Other State Entities (OSEs) – 75 entities. - Coverage in the 2024 State Ownership Report: 152 specified entities (out of an approved list of 175), including 54 SOEs, 30 JVCs, and 68 OSEs. - Aggregate SOE financials (2024): - Total revenue generated by SOEs: GHS 133.7 billion (11.5 percent of GDP). - Total assets: GHS 395 billion (total assets have fluctuated around 34 percent of GDP over the past decade). - Total liabilities: GHS 282 billion (about 25 percent of GDP). - Liabilities growth: from GHS 35 billion (19 percent of GDP) in 2015 to GHS 282 billion (about 25 percent of GDP) in 2024. - Concentration: - SOEs accounted for approximately 60 percent of total revenues and 51 percent of total assets across all specified entities. - The energy sector accounts for 61.9 percent of total SOE assets; Financial & Allied Services 13.5 percent; Agriculture 9.4 percent; Transport & Logistics 9.0 percent. - A small number of systemically important enterprises (Volta River Authority (VRA), Electricity Company of Ghana (ECG), Ghana National Petroleum Corporation (GNPC), Ghana Cocoa Board (COCOBOD)) account for the majority of the sector’s GHS 395 billion assets and GHS 282 billion liabilities. - Top 10 SOEs hold around 85 percent of total SOE assets and liabilities. - Key entity contributions and concentrations: - ECG accounted for GHS 71 billion of aggregated SOE liabilities (or 6 percent of GDP), the single largest contributor to the sector’s debt burden. - Analysis in HCT workshop includes financial information of 14 SOEs: ECG, COCOBOD, VRA, GNGC, BPA, GPHA, GACL, BOST, NAFCO, SHC, Ghana Post, PSC, GPCL, Gridco. ### SOE leverage, FX exposure, and finance costs - Liabilities composition and risks: - Much of SOE debt is denominated in foreign currency or carries implicit government backing, creating fiscal and external vulnerabilities. - Energy SOEs have extensive obligations under power purchase agreements (PPAs), many USD-indexed and backed by government guarantees, magnifying FX and refinancing risks. - Finance costs: - High finance costs amounted to GHS 9 billion in 2024, absorbing operational gains and worsening net outcomes across the SOE sector. - COCOBOD and Ghana Water Company Limited (GWCL) account for a large share of finance costs; GWCL’s USD-denominated loans were sharply revalued in 2024 due to GHS depreciation; COCOBOD carries sizable bank loans and trade payables. - In 2024, COCOBOD and GWCL together accounted for well over half of aggregate SOE finance costs. - Implication of concentration: - Concentration of liabilities in a few large utilities and commodity-related SOEs exposes the State’s commercial balance sheet to sector-specific shocks and FX volatility, underscoring the need for strengthened monitoring, tighter debt management practices, and robust oversight. ### SOE financial performance trends - Aggregate losses: - Aggregate SOE losses increased sharply in 2022 due to a severe macroeconomic shock, including exchange rate depreciation. - The energy sector—particularly electricity utilities (ECG, Ghana Grid Company or GRIDCo, Northern Electricity Distribution Company or NEDCo, and VRA)—was the main driver of the deterioration. - Main drivers of losses: high-cost, dollar-denominated "take-or-pay" power contracts, GHS depreciation in 2022, liquidity crisis, and worsened ECG collection rates. - Persistent operational inefficiencies include high technical and commercial losses, non-cost-reflective tariffs, and substantial payment arrears within the energy value chain. - Sectoral performance: - Losses in communications, infrastructure, and agriculture (dominated by COCOBOD’s sharp reversal) compounded aggregate losses. - These weaknesses were partially offset by strong performance in the Financial Services and Transport sectors. *IMF Technical Assistance Report | tarea2026073 - 1. Ghana’s SOEs play a pivotal role in public service delivery and economic development.* ### 23. The aggregate SOE portfolio remained structurally loss-making through 2024, with net ### The aggregate SOE portfolio remained structurally loss-making through 2024, with net losses reaching 0.8 percent of GDP ### Aggregate performance and key statistics - Total SOE revenue increased from GHS 56 billion in 2021 to GHS 133 billion in 2024. - Aggregate SOE net losses deepened from GHS 1.7 billion in 2021 to GHS 9.7 billion in 2024. - Net losses in 2024 amounted to 0.8 percent of GDP. - The SOE sector recorded aggregate losses for five consecutive years through 2024. - Aggregate financing costs for SOEs reached GHS 9.4 billion in 2024. - Aggregate Earnings before Interest and Tax (EBIT) amounted to GHS 1.57 billion in 2024. - Ten largest SOEs account for roughly 85 percent of the sector’s total liabilities. ### Concentration of revenues and losses - ECG, VRA, GNPC, COCOBOD, Bui Power Authority (BPA), Ghana National Gas Company (GNGC), Northern Electricity Distribution Company (NEDCo), Ghana Ports and Harbours Authority (GPHA), Consolidated Bank Ghana (CBG) and Ghana Grid Company (GRIDCo) together generated almost 80 percent of total SOE revenue in 2024. - Those entities collectively recorded a net loss of GHS 8.8 billion in 2024, around 1 percent of GDP, representing over 90 percent of total SOE net losses. - ECG alone contributed 85 percent of the aggregated losses made by SOEs in 2024, equivalent to 0.7 percent of GDP. ### Financing costs and indebtedness - Aggregate financing costs (GHS 9.4 billion) were nearly six times aggregate EBIT (GHS 1.57 billion) in 2024. - The bulk of finance costs stem from a limited set of highly indebted entities (GWCL, COCOBOD and energy sector SOEs). - The SOE sector’s aggregate debt-to-asset ratio rose slightly to 0.71 in 2024 (from 0.70 in 2023). - Ten largest SOEs listed include: ECG, COCOBOD, VRA, GNPC, GWCL, GNGC, CBG, BPA, Tema Oil Refinery (TOR) and GRIDCO. ### Structural drivers of poor performance - Tariffs Below Cost Recovery: Some SOEs in regulated sectors operate under tariff structures that do not reflect actual production and service costs. In the energy sector, non-cost-reflective tariffs, high technical and commercial losses and significant payment arrears create chronic cash flow deficits (noted for ECG and NEDCO), cascading upstream to VRA, GNGC, and independent power producers. - Unidentified and Uncosted Quasi-Fiscal Activities (QFAs): SOEs frequently deliver non-commercial services or policy-driven mandates without proper costing or compensation from the budget, undermining transparency and financial sustainability. - Market Factors: External market dynamics adversely affected COCOBOD in 2024 — a sharp decline in cocoa output, a surge in producer prices, and adverse hedging outcomes. Energy sector SOEs are exposed to market-driven energy price fluctuations. - Risk management weaknesses: The developments underscore the importance of robust risk management policies and procedures at SOEs to manage and reduce exposure to volatile market conditions. ### Pockets of positive performance - Financial & allied services and manufacturing subsectors have turned or remained profitable over the past five years. - Examples of improved entities: Ghana EXIM Bank, Ghana Reinsurance, CBG — improved profitability, reduced liabilities or strengthened liquidity. - Smaller SOEs such as Accra Abattoir generate modest but sustainable surpluses and maintain low leverage. - These gains are insufficient to offset large losses in the energy and agriculture sectors driven by ECG and COCOBOD. ### Fiscal risk assessment and implications - SOEs generate fiscal risks through direct budgetary support, government-backed borrowing, arrears and QFAs; exposures are heavily concentrated in a few large entities. - SOE arrears, IPP obligations and foreign currency denominated debt are significant sources of contingent liabilities for the sovereign. - Energy sector SOEs are the most acute and immediate source of fiscal risk due to under-recovery of costs, rising debt burdens, liquidity constraints, and large receivables from the Government. - Persistent arrears accumulation across the energy value chain driven by under-recovery of costs and weak collections by ECG is the most immediate and material fiscal risk channel. - ECG accounts payable reached GHS 54.5 billion or 76.8 percent of its liabilities (source: 2024 ECG financial statements). ### SOE risk analysis, monitoring and capacity building - The mission conducted a fiscal risk analysis workshop using the SOE Health Check Tool (SOE HCT); participants reviewed financial statements of 14 SOEs and populated the HCT with 2023-2024 balance sheets and income statements (2023 data used for COCOBOD due to unavailability of 2024 data). - The HCT classification: entities ranked Category 1 (lowest risk) to Category 5 (highest risk). The majority of sampled SOEs fall in Categories 3 to 4 (moderate to elevated risk). - Table 1 (2023-2024 overall risk ratings): - ECG: Category 5 (2023) → Category 4 (2024) - VRA: Category 3 → Category 3 - COCOBOD: Category 3 → Category 3 - GNGC: Category 3 → Category 4 - BPA: Category 3 → Category 3 - GACL: Category 3 → Category 4 - GPHA: Category 2 → Category 2 - BOST: Category 3 → Category 3 - SHC: Category 2 → Category 3 - Ghana Post: Category 4 → Category 3 - PSC: Category 3 → Category 2 - NAFCO: Category 4 → Category 4 - GPCL: Category 3 → Category 2 - GRIDCO: Category 4 → Category 4 ### Deep dives — ECG (Electricity Company of Ghana Ltd.) - Service scope: Responsible for distribution and supply across southern Ghana, serving about 80 percent of the country’s population and handling over 90 percent of power purchased for resale. - 2024 key financials and ratios: - Total assets: GHS 76.25 billion - Equity: GHS 5.25 billion - Operating revenue: GHS 36.1 billion (up over 55 percent from 2023 due to increased government support) - Net loss: GHS 8.3 billion in 2024 - Net margin: –22.8 percent - Return on assets: –9.7 percent - Return on equity: –157 percent - Trade and other payables: GHS 54.5 billion - Bank overdrafts, commercial loans, external loans and on-lending: around GHS 5.4 billion - Operational issues: - Around 40 percent of energy fed into its network is effectively unbilled or uncollected due to technical and commercial losses and non-metered consumption. - Heavy reliance on government grants and arrears-clearing operations: government payments to IPPs and related costs recognized as revenue (grants) totaled about GHS 19.7 billion in 2024 (almost half of ECG’s reported revenue). - Cumulative losses of around GHS 26 billion over the last three years. - Foreign-exchange exposure from FX-linked PPAs and FX-denominated debt while collecting revenues in Ghanaian cedis. - Governance and reform recommendations for ECG: - Treat ECG as a high-risk SOE within Ghana’s fiscal framework. - Subject ECG to enhanced oversight, clear separation and budgeting of non-commercial obligations, time-bound operational restructuring, and explicit integration into the government’s fiscal risk management and budget frameworks. - Implement a time-bound and credible turnaround plan anchored in clear milestones on tariff policy, loss reduction and revenue collection, debt and arrears restructuring, and corporate and governance reorganization. - Sectoral mechanisms and progress: - Cash Waterfall Mechanism (CWM) introduced to collect revenues and distribute to priority recipients (IPPs and fuel suppliers); with CWM, sector situation improved—ECG revenues increased and arrears to IPPs and fuel suppliers declined. - ECG and SIGA prepared a five-year financial model and restructuring concept including separation of the retail segment (billing and collections); implementation remains at an early stage. ### Deep dives — COCOBOD - Financial trajectory and risks: - Total liabilities increased from GHS 14.7 billion in 2020 to GHS 28.5 billion in 2022, with payables dominating liability structure. - Turnaround in profitability in 2023 reduced total liabilities by GHS 4 billion. - Debt-to-assets ratio continues to hover around 90 percent. - 2023 deterioration drivers: - Sharp decline in cocoa output, steep increase in producer prices, and adverse hedging outcomes (forward contracts executed at prices below prevailing international market levels during sharp global price increases). - Overhedging and forward sales at low prices depleted the stabilization fund and left payables dominating its balance sheet. - Policy implications: - COCOBOD requires close monitoring by the MOF due to high leverage and exposure to market risks. - Need to strengthen COCOBOD’s risk management policies. ### Policy implications and recommended focus areas - Urgent measures to improve financial health of priority SOEs, focusing on: - Cost-reflective tariffs, particularly in the energy sector. - Enhanced corporate governance and time-bound restructuring of high-risk entities. - Stronger fiscal oversight and rigorous framework for managing and monitoring SOE fiscal risks. - Clear identification, costing and budget compensation for Quasi-Fiscal Activities. - Targeted measures addressing high financing costs and concentrated indebtedness among priority entities. - Strengthen MOF capacity in SOE fiscal risk assessment and monitoring (e.g., continued use of SOE HCT and consistent audited financial inputs). *Source: IMF Technical Assistance Report (mission analysis and SOE HCT results, 2023-2024 financial statements).* ### 2024. Alongside this negative profitability trend, difficulties in timely collection of receivables from ### tarea2026073 - 2024. Alongside this negative profitability trend, difficulties in timely collection of receivables from ### SOE financial performance and immediate fiscal risk drivers - VRA: receivables and payables dynamics illustrated for 2017-2024 (Figure 10). - Rising liabilities to suppliers driven by difficulties in timely collection of receivables from distribution companies have further deteriorated the company’s fiscal risk profile. - Negative profitability trend observed (period referenced as 2024 in context). ### Ghana Gold Board (GoldBod) — status and implications - "GoldBod" established in April 2025 under the GoldBod Act (2025). - Not assessed by the mission owing to early stage of operations and insufficient available data. - Available financial information covered only the initial six months of operations and was insufficient for meaningful evaluation of performance or fiscal risks. - Recommendation: as GoldBod matures, it should be regularly included in fiscal risk assessments conducted by the MOF and subjected to proper fiscal discipline and dividend policies set by the government. ### Incomplete identification and disclosure of SOE–government financial relationships - Key weakness: incomplete identification and disclosure of the full range of financial relationships between SOEs and the government. - Reported flows: some direct budget transfers and on-lending operations are reported and covered by the MOF analysis. - Fragmented/missing information: settlement of arrears, tax expenditures, quasi fiscal activities, policy-driven pricing arrangements, guarantees, budget revenues in terms of tax payments or dividends. - Practical consequence: large interactions (including payment arrears to ECG and VRA by government entities and absorption of financial pressures within COCOBOD’s balance sheet) are only partially reflected in fiscal risks analysis. - Result: limited ability to assess net fiscal cost and exposures comprehensively and obscured scale and timing of fiscal support. ### Quasi-fiscal activities (QFAs) - QFAs undertaken by SOEs are not identified, quantified, or transparently disclosed despite material impact on SOE financial performance and fiscal risks. - Examples of QFAs: - Electricity supplied by ECG at tariffs below cost. - Delayed or non-payment by public institutions. - COCOBOD’s assumption of exchange-rate and price risks through cocoa pricing and hedging policies. - Consequences: weakened SOE balance sheets, blurred accountability between policy and commercial objectives, shifted fiscal pressures off budget. - IMF guidance referenced: - Fiscal Transparency Code calls for identification, disclosure, and quantification of QFAs where possible. - Fiscal Transparency Evaluation (FTE) guidance emphasizes explicit identification, quantification, and budgetary compensation of QFAs to strengthen transparency and reduce hidden and contingent fiscal risks. - Proposed action: introduce standardized procedure and templates (see Annex I referenced in source) for identification, measurement, and reporting of QFAs; draw on country examples such as Georgia. ### Fiscal risks reporting framework and current reports - MOF produces two reports analyzing SOE-related fiscal risks: an annual Fiscal Risks Statement (FRS) by the Fiscal Risks Unit and a more detailed SOE-specific fiscal risks report by the Public Entities Unit. - Fiscal Risks Statement (FRS): - Produced by the Fiscal Risk Unit (FRU) since 2019; inaugural edition excepted, treated as internal analytical document. - 2024 draft FRS reviewed by mission, covers risks for 2024 and is under internal review. - 2024 draft FRS analyzes macroeconomics, revenues, expenditures, SOEs, financial sector, monetary and external sectors, PPPs, local governments, and cybersecurity (in `Other Fiscal Risks`). - Uses SOE HCT tool to present risk profiles for ten key SOEs, including ECG, COCOBOD, VRA, and GNPC; presents indicators such as profitability, liquidity, solvency, and five-year trends in ROE, ROA, assets, liabilities, receivables and payables. - Discusses mitigation measures from government portfolio review (privatizations, mergers, divestitures, liquidations). - SOE Fiscal Risks Report by Public Entities Unit: - Annual detailed analysis of entire portfolio of SOEs and JVCs. - 2023 report covers 67 entities over 2018–2022, including 33 non-financial SOEs, 20 financial SOEs and 14 JVCs. - Analysis based on SOE HCT. - Key limitations: significant data lag (2024 SOE Fiscal Risk Report is based on 2022 data, a two-year gap), limited forward-looking analysis; diagnostics can be outdated for highly risky entities in volatile macro contexts. - Methodological gap: SOE HCT primarily designed for non-financial SOEs and not well suited to financial sector SOEs (e.g., CBG, NIB, Ghana Re); may understate vulnerabilities by failing to identify implicit guarantees, directed lending, and other QFAs. - Dual reporting strengths and weaknesses: - Advantages: timely overview via FRS and granular insights via SOE report. - Weaknesses: data lag reduces relevance to budget process; lack of integration between FRS and SOE report; overlapping analytical work and duplication of effort. ### Priority recommendations to strengthen fiscal risks analysis and SOE oversight - Strengthen connection between SOE Fiscal Risks Report, the FRS, and the budget cycle: - Use SOE Fiscal Risks Report as key input to SOE section of FRS. - Synthesize core diagnostics (macro‑critical SOEs, fiscal transmission channels, balance‑sheet vulnerabilities, mitigation measures) in concise, policy‑oriented format focused on macro-critical entities. - Finalize FRS alongside annual budget package to inform budget preparations and medium-term fiscal projections. - Prioritize monitoring on a select group of high-risk, macro-critical SOEs: - Identify priority SOEs using criteria such as leverage, profitability, liquidity, business volatility, and overall risk exposure with indicative thresholds. - Suggested macro-critical entities: ECG, COCOBOD, VRA, GNPC, GWCL, and CBG. - Adopt lighter-touch, less frequent review for SOEs with limited fiscal footprints. - Develop tailored analytical framework and reporting templates for financial SOEs: - Use key financial ratios and indicators relevant to banking and insurance. - Facilitate systematic identification and quantification of QFAs for financial sector entities. - Identify and discuss risk mitigation measures strategically: - Focus on portfolio-level strategies and macro-critical SOEs. - Emphasize early engagement with largest/highest risk SOEs to develop risk management strategies before ad hoc requests for capital injections or other support. - Introduce forward-looking analytical elements: - Complement SOE HCT with alternative scenarios and stress testing for priority/high-risk SOEs while maintaining broad monitoring across the SOE portfolio. ### Financial and fiscal oversight responsibilities (MOF and SIGA) - Legal framework: responsibilities assigned by PFM Act (2016) and SIGA Act (2019), supporting regulations and corporate governance code. - MOF responsibilities: - Primary responsibility for macro-fiscal implications of SOE performance and monitoring related fiscal risks. - Formulation of financial policy, approval of SOE budgets and borrowing limits, assessment of SOE financial performance, and management of fiscal risks from SOEs. - Approves key financial parameters for each SOE (annual budgets, projected dividends, external and domestic borrowing, government guarantees) often on SIGA’s advice. - Consolidates SOE financial plans into fiscal forecasts; Public Entities Unit develops corporate governance policies and liaises with SIGA. - SIGA responsibilities: - Central ownership entity under SIGA Act (2019), reports to the Minister for Finance. - Promotes efficient operations, enforces corporate governance standards, monitors SOE performance against annual performance contracts. - Consolidates financial and operational data across SOE portfolio and evaluates compliance with governance codes. - Duplication and overlap: - Both MOF and SIGA collect SOE financial statements and conduct analysis with complementary objectives: - MOF: ensure prudent fiscal management including SOE debt and guarantees within national fiscal framework. - SIGA: centralized oversight to promote efficiency and governance, monitor performance, and assist MOF on borrowing and guarantee requests. - Oversight and authorization often overlap; where decisions have public finance implications, MOF should be final authority. - Example overlaps: government guarantees (SIGA advises the Minister; Public Debt Management Office within MOF assesses guarantees), budget support recommendations, acquisition/disposal of assets. - Recommended MOF role enhancements: - Lead on financial matters as institution responsible for public finances. - Set appropriate financial reporting standards for SOEs in partnership with SIGA and Controller and Accountant-General’s Department. - Use up-to-date information to maintain an accurate register of contingent liabilities, risks to government revenues from SOE underperformance, impact on economic growth of systemically important SOEs, and related scenario analysis. *Source: IMF Technical Assistance Report (selected excerpts).* ### 60. Improving the effectiveness of coordination between the MOF and SIGA is essential to ### tarea2026073 - 60. Improving the effectiveness of coordination between the MOF and SIGA is essential to ### Coordination between MOF and SIGA: findings - Dual roles of MOF and SIGA result in fragmented reporting and parallel monitoring functions, particularly around financial performance, borrowing approvals, and compliance with reporting requirements. - Opportunity for synergy: - Strengthening data sharing protocols could enable more timely and effective SOE fiscal risk analysis by MOF through making SIGA’s real-time performance monitoring available to MOF staff. - Jointly defining standardized reporting templates can improve early identification of contingent liabilities and fiscal pressures embedded in SOE operations. - Enhanced collaboration, anchored in the legal framework and supported by integrated reporting platforms, would consolidate financial information flows into MOF’s fiscal risk management processes, improving transparency and informing more timely and effective policy decisions. - SOP assigns complementary roles: SIGA as central ownership/performance monitor; MOF focused on fiscal oversight and integration of SOE risks into PFM framework—creating a dual-institution model with overlapping responsibilities. ### Internal MOF structure and overlaps - Of the 14 main MOF divisions, at least five have direct responsibility for some aspect of SOE governance and finances, creating overlaps in reporting lines, submission requirements, and decision-making mandates. - Auditor-General and Audit Services of Ghana have constitutional authority and must work in partnership with MOF and SIGA due to parallel or overlapping responsibilities. - SIGA has improved central oversight but lacks full legal power to enforce sanctions for non-compliance. ### Streamlining SOE reporting and data flows - Current challenges: - Parallel reporting lines requiring SOEs to make submissions, respond to queries, and prioritize engagements with different institutions. - Multiple stakeholders for SOEs leading to accountability across a wide spectrum of governmental and non-governmental bodies. - Recommended operational responses: - Invest in digital technologies, data sharing mechanisms, and a central data repository to reduce administrative burden. - Enhance data flows and information exchange between SIGA and MOF and within MOF to expedite financial data sharing, reduce effort duplication, and improve SOE oversight effectiveness. ### Recommendations (prioritized actions and deadlines) - 1. Prioritize fiscal risks analysis of macro-critical and high risks SOEs, identify and propose risk-mitigation measures for the major fiscal risks (MOF, September 2026). - 2. Prepare and publish FRS in time to inform the budget process and include it in the Medium Term Expenditure Framework or in the Budget Package (MOF, October 2026 to inform 2027 Budget Package). - 3. Develop templates for macro-critical SOEs to report on all fiscal flows to and from the budget, and to identify and report on QFAs. Implement digital mechanism to ensure timely SOE reporting exchange with SIGA (MOF, SIGA, September 2026). - 4. Develop models for assessing fiscal risks from financial sector entities tailored to sector specific financial ratios (MOF, September 2026). - 5. Introduce forward-looking analysis for key macro-critical SOEs (MOF, October 2026). - 6. Build the MOF staff capacity in analyzing SOEs financial performance, fiscal risks and providing input to the ownership level decision-making (MOF, continuous). ### Ownership policy, legal framework and governance: salient points - State Ownership Policy (SOP): - Major step toward a principles-based framework covering SOEs, joint ventures and other state entities; consolidates provisions from the Constitution, Companies Act 2019 (Act 992), Public Financial Management Act 2016 (Act 921) and Regulations, and SIGA Act 2019 (Act 990). - Requires SOE boards to report on compliance with the policy in their annual reports. - Does not explicitly require identification, quantification, and reporting of QFAs, nor mandate systematic disclosure of arrears accumulation or policy-driven losses—gaps relative to the IMF Fiscal Transparency Code (Pillar III) and Fiscal Risks Toolkit. - Stops short of explicitly requiring SOE financial plans, borrowing, guarantees, and contingent liabilities to be systematically integrated into MOF’s fiscal risk analysis and medium-term fiscal framework. - SOE portfolio characteristics: - Portfolio remains relatively large and heterogeneous; SOP does not embed a systematic ownership approach or mechanism for periodic review of ownership rationale. - Recommendation: phased portfolio reviews, initially on macro-critical and priority SOEs, assessing public policy justification, commercial viability, governance quality, and fiscal risks. - Legal and institutional framework highlights: - Key laws include the Constitution (1992), PFM Act (2016), Companies Act (2019), SIGA Act (2019), Audit Service Act (2020), Public Procurement Act (2003, amended in 2016, 2022 and 2025), Corporate Insolvency and Restructuring Act (2020). - Many major SOEs are statutory corporations (e.g., COCOBOD, GPHA, VRA); ECG is a limited liability company under Companies Act. - SIGA performance and limits: - Since 2019, SIGA secured Cabinet approval for an official list of 175 Specified Entities. - Expanded performance contracts to 70 entities in 2024, up from six in 2016. - Increased number of entities submitting financial statements from 18 in 2017 to 152 in 2024. - Launched a harmonised Code of Corporate Governance and a performance management framework; however, SIGA lacks full enforcement powers. - Practical governance challenges: - Major SOEs (ECG, COCOBOD, GPHA, VRA) face multiple principals (sector ministries, regulators, SIGA), conflicting directives, and quasi-fiscal burdens (e.g., below-cost tariffs, social infrastructure, climate-smart investments) that are not always transparently costed or compensated. - Line ministries and political appointees on SOE boards can issue binding policy instructions, blurring separation of ownership, regulation, and management. ### Code of Corporate Governance and implementation - Code adopted in 2023 for specified entities: - Adopts a stakeholder model of corporate governance, incorporating social and environmental considerations. - Key requirements: clear definition of roles and separation of powers; rules for board representation, size and tenure; transparency, disclosure and accountability; regular performance assessment; respect for statutory independence and ethical standards. - SIGA is mandated to ensure compliance with the Code. *IMF Technical Assistance Report | selected sections* ### 83. The Code sets the SOE board and CEO appointment framework that stresses fixed terms, ### The Code sets the SOE board and CEO appointment framework that stresses fixed terms, ### Appointment framework and CEO evaluation - Board members should be appointed to terms of between three and five years by the President of the country. - Once the board approves the corporate strategy, board members must monitor financial and non-financial performance. - The board of each SOE is responsible for establishing board-level committees to oversee risk management, human resource management, financial accounting, reporting and audits, and other critical issues. - CEOs are evaluated on a set of performance criteria; the Code highlights the importance of the CEO’s relationship with the board. ### Implementation gaps and irregularities - Implementation of the Code and its provisions remains incomplete with numerous instances of non-compliance. - The Code prescribes transparency and disclosure requirements, including a list of mandatory reports and procurement requirements. - The 2024 audit of SOE commitments identified major irregularities: - over 15 percent of payables violating PFM regulations or the law; - 6.4 percent of procurement commitments violating PFM regulations or the law. - The largest portion of irregularities occurred in SOEs within the energy and roads construction sectors. - These instances point to ineffective or unethical management practices, political interference, and poor oversight by corporate boards. ### Reforms and institutional changes underway - MOF organizational restructuring includes: - establishment of a dedicated fiscal risk unit; - placing SIGA under the MOF purview; - review of the SOP to improve transparency, revise SOE dividend policies, and refine board appointment criteria. - SOP mandates SIGA to develop a Nomination Framework to identify, vet and shortlist candidates, create a pool of potential directors, and define due process for removals based on Cabinet‑approved benchmarks. - SOP requires mandatory corporate governance training for all new SOE board members, with further training based on annual board evaluations. ### SOE board and CEO selection in practice - Formal architecture aims for a merit-based nominations framework but appointments remain highly political and centralized in the Presidency. - CEO (or Managing Director) appointments are typically made by the President, often in consultation with the relevant minister, rather than selected and appointed by SOE boards through a competitive process. - Consequences of politically driven appointments: - weakened accountability link between boards and management performance; - boards play a limited role in CEO selection and dismissal, discouraging robust board challenge of management; - CEOs may respond more to political principals than to their boards. - Formal and transparent procedures remain insufficiently articulated and institutionalized; appointment processes for some entities lack clear, merit-based criteria, competency profiles, or standardized vetting procedures. - There is limited public disclosure of criteria used for appointments or the outcomes of evaluations. ### SIGA’s role, capacity constraints, and recommendations - SIGA is building a pool of directors, provides governance training when funding allows, and promotes annual board evaluations. - SIGA faces difficulty finding suitably skilled and experienced candidates, especially in technical sectors. - Authorities should encourage SOE board members to undertake structured training programs in corporate governance and board effectiveness. ### SOE board composition and diversity - Board sizes and structures are broadly within international good practice: - VRA has a statutory nine‑member board (chair, CEO and seven others); - COCOBOD and GPHA historically had around eleven members, though the new GPHA board has nine; - ECG’s board is of similar size. - Boards combine one executive (the CEO) with a majority of non‑executive members. - Primary concern: qualifications of non-executives rather than board size. - Political appointees hold many SOE board seats; ministers and other public officials serve on boards, diverging from OECD SOE Guidelines that emphasize independence. - Stakeholder representation is relatively strong but commercial expertise can be lacking (examples: COCOBOD, GPHA, VRA). - Gender representation: - women occupy about 25.9 percent of board positions across State Entities (2024 State Ownership Report); - female heads of entities are 17.7 percent in 2024. - Many SOE boards lack foundational governance tools (board charters, codes of ethics); only about a third of SOEs report having a code of ethics or gender policy. - VRA is noted as an exception with a formal Board Charter, delegation of authority, regular governance training and annual self‑evaluations. ### Board committee structures and functioning - Under the Companies Act (2019) and governance guidelines, SOEs are expected to establish audit committees; SIGA framework and performance contracts encourage additional committees (risk, remuneration, nominations). - Compliance in establishing and operating specialized committees varies; gaps include partially constituted or non-independent committees, unclear mandates, and insufficient technical capacity. - PFM Act requirement: every specified entity must establish a five‑member Audit Committee with a majority of independent members nominated by the Internal Audit Agency and the Institute of Chartered Accountants, chaired by an external member. - ECG, COCOBOD, GPHA and VRA have such Audit Committees. - VRA’s committee architecture: - Audit & Risk, Finance & Investment, Services & Employee Relations, and earlier Engineering & Operations committees; - in a recent year, the board held six ordinary meetings, one emergency meeting and seventeen committee meetings. - COCOBOD operates a politicized Finance Committee and other specialized committees, with heavy political leadership limiting independence. - GPHA has committees for Finance, Audit, Human Resource Management, Technical, and Risk & Cybersecurity but provides limited public disclosure on mandates and performance. - ECG’s weak disclosure makes its internal control architecture opaque. - SIGA expects boards to operate on annual calendars, meet at least quarterly and sign performance contracts; SOP and the Code call for annual board evaluations, codes of ethics and mandatory governance training. ### SOE reporting, audit and disclosure - Legal requirement: SOEs must prepare financial statements in accordance with International Financial Reporting Standards (IFRS). - In practice, compliance is uneven, especially among large and macro-critical entities. - Reporting weaknesses: - ECG and GWCL financial statements have historically shown weaknesses in treatment and disclosure of arrears, government receivables, and foreign-exchange losses; - COCOBOD’s accounts reveal challenges recording hedging positions, exchange-rate exposures, and policy-driven pricing decisions. - SOEs must submit annual audited financial statements and performance reports to SIGA and the MOF, forming the basis of the State Ownership Report; reporting remains fragmented with delays and gaps. - Aggregate reporting gaps: - does not fully capture interconnected financial exposures within the energy sector linking ECG, NEDCO, VRA, GNGC, and IPPs; - does not systematically consolidate SOE debt, guarantees, and arrears into MOF’s fiscal risk analysis. - Public disclosure has improved through expanded State Ownership Reports and publication of selected audited accounts but remains largely backward-looking and provides limited insight into quasi-fiscal activities (QFAs) and implicit subsidies. - Fiscal costs not systematically quantified or disclosed include: - non-cost-reflective electricity tariffs and delayed payments by public entities to ECG; - COCOBOD’s assumption of price and exchange-rate risks through administered producer prices and hedging practices. - External audits are legally required (private audit firms or Ghana Audit Service) per the Companies Act and public sector audit requirements; audit coverage and timeliness vary. - Large SOEs such as ECG, COCOBOD, and VRA have experienced delays in finalizing audited accounts and recurring qualified audit opinions. - Audit findings are not always followed by timely corrective actions; need to strengthen audit timeliness, publication, and systematic follow-up for systemically important SOEs. *IMF Technical Assistance Report* ### 110. The majority of Ghanaian SOEs struggle with financial reporting and audit timelines. Public ### tarea2026073 - 110. The majority of Ghanaian SOEs struggle with financial reporting and audit timelines. Public ### Compliance with financial reporting and audit timelines - Public institutions such as SOEs must submit financial statements for auditing no later than four months after the end of the financial year. - For the 2024 financial year, majority of SOEs were unable to meet this requirement, including non-submission of financial statements by some entities, late submissions, inaccurate revenue reporting, failure to maintain adequate documentation, inadequate asset management and weak internal audit functions. - Across all entity types, audited financial statements show the weakest compliance (24–30 percent of entities). - Signed performance contracts compliance: - Commercial SOEs: 76 percent - Dual‑mandate SOEs: 60 percent - Other entities: much lower (see breakdown below) - Quarterly reporting compliance: - Commercial SOEs: 74 percent - Joint ventures and other state entities: about one third - Table 3: Compliance with Reporting Requirements in 2024 (number and percentage of total within the category) - Commercial SOEs — Audited Financial Statements: 11 (29%) ; Management Statements: 19 (50%) ; Signed Performance Contracts: 29 (76%) ; Quarterly Reports Fully Submitted: 28 (74%) - Dual Commercial & Public Policy Mandate SOEs — Audited Financial Statements: 3 (30%) ; Management Statements: 5 (50%) ; Signed Performance Contracts: 6 (60%) ; Quarterly Reports Fully Submitted: 6 (60%) - Joint Venture Companies — Audited Financial Statements: 5 (25%) ; Management Statements: 10 (50%) ; Signed Performance Contracts: 6 (30%) ; Quarterly Reports Fully Submitted: 6 (30%) - Other State Entities (Regulators and Information Agencies) — Audited Financial Statements: 19 (24%) ; Management Statements: 42 (53%) ; Signed Performance Contracts: 32 (40%) ; Quarterly Reports Fully Submitted: 29 (36%) - Other State Entities (Special Purpose Vehicles) — Audited Financial Statements: 2 (29%) ; Management Statements: 4 (57%) ; Signed Performance Contracts: 1 (14%) ; Quarterly Reports Fully Submitted: 1 (14%) - Source: 2024 SIGA, Mission calculations ### Irregularities, amounts, and causes - Weak compliance with financial management standards has undermined the integrity of key processes, leading to notable irregularities per the Auditor-General report. - Shortcomings primarily attributable to insufficient oversight by management and boards; observed indifferent attitude toward loan recovery and ineffective debt collection, contributing to delays in debt repayment, accumulation of interest charges, and a growing volume of accounts receivable. - Table 4: SOE Reporting Irregularities by Category (2024) - Outstanding debtors & loans — Amount (GHS): 12.54 billion — Description: Overdue receivables; locked-up funds - Cash irregularities — Amount (GHS): 4.58 billion — Description: Unsupported payments, unaccounted revenue - Contract irregularities — Amount (GHS): 871.82 million — Description: Overdue payables, leading to interest penalties - Procurement irregularities — Amount (GHS): 335.27 million — Description: Non-competitive procurement, illegal awards - Payroll irregularities — Amount (GHS): 191.6 million — Description: Unremitted taxes, failure to deduct - Tax irregularities — Amount (GHS): 77.06 million — Description: Unearned salaries, unpaid SSNIT - Stores irregularities — Amount (GHS): 4.5 million — Description: Unaccounted inventory, no stores records - Source: 2024 Report of the Auditor General on the Public Accounts of Ghana ### Institutional framework, performance contracting, and evaluation - Ghana has a formal framework for SOE performance contracting and evaluation intended to strengthen accountability, monitor results, and align SOE operations with government objectives. - Annual performance contracts are overseen by SIGA and coordinated with the MOF; framework reflected in SIGA’s performance management guidelines and reported through the MOF State Ownership Reports. - Performance contracts are legally binding between the government and the board and management of specified entities; SIGA is empowered to negotiate, sign and enforce performance contracts and recommend sanctions to the President, including removal of board members for non-performance. - PFM Regulations of 2019 (L.I 2378) operationalize contracting requirements; set out penalties such as suspension, dismissal, administration, or liquidation for non-compliance; link requests for government support to the budget process. - The Code of Corporate Governance establishes a sequential process of monitoring and evaluation, providing for internal and external evaluation, committee formation, peer reviews, external consultant reviews, and dispute resolution and appeal mechanisms for directors and management. - Despite institutional arrangements, only half of specified entities signed performance contracts in 2024: - 74 out of 175 specified entities signed performance contracts in 2024. - No verifiable instances of punitive measures taken despite financial distress, procurement irregularities, abandoned projects and reporting non-compliance; enforcement weaknesses may affect credibility of turnaround plans (example: COCOBOD). ### Progress, gaps, and examples of practice - Authorities have tightened spending controls, especially in the energy sector; expensive contracts are being renegotiated, and some quasi-fiscal operations are winding down. - Persistent implementation gaps undermine effective governance: financial underperformance, high quasi-fiscal burdens, recurring audit findings, weaknesses in board independence, role separation, and transparency. - Examples of good practice: adoption of SOE board charters, structured board level committees, regular evaluations, and training; expanded performance contracts and improving audit coverage through centralized oversight signal gradual behavioural change. - Three systemic weaknesses requiring decisive action: - Politicized appointments - Insufficient separation of ownership and policy roles - Weak SOE transparency - Recommended institutional responses include operationalizing a merit-based nomination framework, reducing political presence on boards, enforcing the Code of Corporate Governance, and mandating systematic disclosure of board composition, committee mandates, and evaluation outcomes. ### Priority actions and recommendations (selected) - Review the SOE portfolio, re-classify all entities to appropriate categories: (i) commercial or having potential to operate commercially; (ii) mixed mandates; and (iii) general government units (incl. regulators). Conduct GFSM sectorization exercise (MOF, SIGA, December 2026). - Review the SOP and critically evaluate the Policy alignment of each entity, prepare grounds for policy decisions (MOF, SIGA, December 2026). - Design and introduce merit-based selection process for SOE Boards and Executive Management, starting with macro-critical SOEs (MOF, SIGA, December 2026). - Develop a plan to progressively reduce the number of active politicians and high level officials on SOE boards (SIGA, December 2027). - Additional recommended measures described in text: - Fully implement the Code of Corporate Governance: mandatory board charters, codes of ethics, annual evaluations, and training. - Enforce systematic disclosure of board and committee structures, attendance, and evaluation findings in annual reports and on entity websites. - MOF to actively participate in SOE boards merit-based appointments, strengthen spending controls, and enforce transparent reporting and oversight. - Clarify and compensate QFA mandates (examples cited: ECG’s tariff under-recovery and COCOBOD’s social programmes) to align incentives and enable boards to focus on long-term value creation. *Source: IMF Technical Assistance Report (sections on Ghanaan SOE financial reporting, governance, performance contracting, and infrastructure governance derived from the provided chapter content).* ### 131. Aligning SOE investment with national and sectoral strategy supports coherent, ### 131. Aligning SOE investment with national and sectoral strategy supports coherent, ### Alignment with policy - Integrating SOE investment projects into national and sectoral strategies supports a single, coherent strategy in which power, transport and water infrastructure is planned alongside critical social facilities such as schools, hospitals and public housing. - Alignment can strengthen spatial planning, facilitate balanced regional development and help ensure that major investments - however funded and delivered - function as a connected system rather than isolated assets. - Setting out the policy principles that shape SOE public investment in the national Ownership Policy and in individual SOE mandates further supports alignment. - Ghana mechanisms: - The Ghana Infrastructure Plan (GIP) is a long-term investment framework – updated periodically – that sits within the framework of the over-arching National Development Plan. - The GIP is composed of a set of sectoral investment frameworks, including energy; transport; water; human settlement and housing; social civic and commercial infrastructure; and ICT assets. SOE investments are within scope of these planning exercises. - SIGA has a legal mandate to evaluate the strategic plans of SOEs and to advise the MOF in relation to an entity’s investment plan. - Practical observations: - Most SOE investments are well-integrated into the national investment strategies, but plans are aspirational, and some SOE infrastructure spending is unconnected to their core business. - The GIP’s results framework presents an integrated set of output and outcome indicators that covers public investment of SOE activities alongside MDAs. - There is no evidence that SIGA considers the infrastructure investment plans of SOEs or evaluates their strategic plans from the perspective of alignment with national investment strategy. - Plans are highly aspirational with indicative costs running to many hundreds of billions of US dollars and not contained by available resources. - Examples of weak links to core business: COCOBOD’s large-scale road building program and GPHA’s engagement in road and rail construction. ### Market structure and regulation - Effective regulation and an appropriate market structure are central to ensuring infrastructure services are reliable, efficiently priced and receive sustainable investment. - In natural monopoly sectors independent economic regulation can set tariffs, performance standards and investment obligations; transparent pricing frameworks are important where SOEs are dominant to avoid cross-subsidization. - Competitive markets require rules on access and pricing to prevent dominance and ensure new entrants can invest. - Where SOEs perform commercial activities as well as public sector obligations, clear arrangements should prevent distortionary cross-subsidization. - Ghana specifics: - The Public Utilities Regulatory Committee (PURC) is a multi-sector regulator for electricity and water utility services. - PURC follows a Regulated Asset Base model to factor in the cost of investment in new infrastructure and maintenance in setting allowable revenues. - SOEs dominate the energy sector and have a combined asset capital stock of GHS 80 billion, equivalent to about 7 percent of GDP. - Key transport SOEs such as ports, airports and bus transport are not economically regulated. - Weaknesses: - Tariffs in the electricity sector have been consistently set below cost recovery levels, reducing resources available for investment in transmission and distribution networks. - The tariff calculation does not include the cost of excess capacity, while many PPAs are “take-or-pay” and therefore impose real costs on ECG. - PURC is nominally independent, but tariff decisions are approved by the Board which is politically appointed. ### Project preparation and appraisal - Strong project preparation and appraisal ensure SOE investments are feasible, well-designed and deliver value for money. - For routine projects with clear mandates, financial analysis may be sufficient; for large, complex projects, socio-economic appraisal such as cost–benefit analysis (CBA) is needed. - Appraisal requirements in Ghana: - Ghana’s 2020 PIM Regulations apply to all projects that are whole or partially budget-funded, involve debt or guarantees or are PPP-financed. - Pre-feasibility and full feasibility studies are required for projects with an estimated cost in excess of USD 5 million. - PURC requires investment appraisal as part of regulatory determinations and GRIDCO and GWCL are required to submit investment plans including CBA of proposed investments. - Compliance and practice: - Degree of compliance with appraisal requirements is unclear; appraisals are not published. - Some feasibility studies have been commissioned for donor-funded projects in electricity transmission, airports and water and have included costing, financial analysis and to a lesser degree economic appraisal. - Submissions to PURC by GRIDCO refer to priority investment projects but do not include CBA. ### Funding and risk management - Clear funding policies and disciplined fiscal risk management are essential to ensure SOE investment is affordable, transparent and fiscally sustainable. - A well-defined framework should specify permissible funding sources (own revenues, borrowing, guarantees, PPPs) and conditions under which each may be used, with explicit limits on borrowing, guarantees and long-term contractual commitments. - Transparent reporting on debt, guarantees, PPP exposures and projected cash flows is necessary for government monitoring and fiscal integration. - Ghana specifics: - Borrowing, PPPs and guarantees by SOEs are required to be approved by the MOF, though historically this was not adhered to and many SOEs took on PPP arrangements, often unsolicited. - SOE investment programs contain the largest PPP projects in Ghana, the majority contracted by GPHA. - The Ghana Railway Authority has two megaprojects in preparation with a combined value of over USD 4.5 billion. - Selected SOE PPP and concession projects (issues and costs): - GPHA Takoradi Ship Repair Facility — Not reached financial close, prompting concerns over capacity to execute. Cost: 100 (USD million). - GPHA Tema LNG Terminal — Project delays have led to foregone revenue and increased commercial risk. Cost: 350 (USD million). - GPHA Takoradi Integrated Terminal — Stable performance but demand-side risks persist. Cost: 210 (USD million). - Ghana Water Ltd Teshie Nungua Desalination — Failure to meet payment obligations necessitated project restructuring and renegotiation. Cost: 125 (USD million). - GPHA Tema Terminal 3 — Stable performance recently but operational risks linked to climate change and equipment unreliability. Cost: 1,500 (USD million). - GPHA Takoradi Bulk Terminal — Concessionaire has yet to fulfil an outstanding Upfront Fee payment of $6.8 million to GPHA; significant market risks due to lack of tank farms and storage facilities. Cost: 65 (USD million). - GPHA Inland Container Terminal — Market risks and other challenges led to concessionaire accumulating outstanding fees owing to the authority of GHC 16 million, leading to GPHA terminating the contract. Cost: 70 (USD million). - Source: Staff analysis of Ministry of Finance (2025) 2024 Annual Report on Public Private Partnerships. - Medium-term budgeting: - A credible multi-year budget should transparently set out financing sources including own resources, borrowings, PPPs, and budget support. - Most SOEs do not have consistent medium-term budgeting for public investment; capital investment plans are not consistently prepared. - Some SOEs budget for major projects on an annual basis; performance contracts reviewed do not include explicit information on major projects to be implemented over the medium-term. - Investment planning is undermined by short-term public fund allocation horizons and lack of predictable dividend policies. - SOEs have relied on long-term funding from IFIs and other lenders to implement large, multi-year capital investments. ### Project assurance and approval - Independent assurance and scrutiny of SOE investment proposals improve investment efficiency and reduce risk of cost escalation, schedule delay and benefit shortfall. - A structured challenge process (“the outside view”) tests assumptions on demand, cost, risk and implementation; independent assurance is especially important for large or innovative projects, regulated or monopoly settings, or investments with significant environmental, spatial or network effects. - Ghana institutions and practice: - Projects wholly or partially funded by government, debt, PPP or requiring guarantees should be reviewed by the PIPWC. PURC reviews some utility investments. - The PIPWC reviews technical, legal, financial, economic and institutional aspects and recommends issuance of a SoQ by the MOF or return to the proposing MDA for further development. - As part of tariff determination, SOE investment plans in water, energy transmission and energy generation are reviewed by PURC. - About 19 percent of investment projects reviewed by PIPWC have been from SOEs and close to 60 percent were approved, with the remainder rejected or recommended for further analysis and refinement. ### Implementation and operation — Procurement, contracting and project management - Effective procurement (open and competitive tendering) and commercially sound contracting increase market participation, strengthen price discipline, reduce corruption exposures and limit variations, cost escalation and schedule delay. - Ghana framework: - SOEs are subject to the PPP framework and the Public Procurement Act with competitive, open procurement as the default option. The Act applies to SOEs “to the extent that they utilize public funds”. - Practice and weaknesses: - Weak procurement and contracting practices have significantly undermined the efficiency of public investment by SOEs in Ghana. - There is a persistently high share of direct award or restricted tendering; high profile cases of weak procurement practices by SOEs exist. - Boxed examples of weak procurement and commercial practices: - ECG entered into multiple “take-or-pay” contracts, obligating the SOE to purchase a given level of electricity irrespective of demand; many contracts were unsolicited, resulting in generation capacity far in excess of needs. PURC does not allow for the cost of excess capacity in allowable revenue calculations. - COCOBOD directly awarded 87 percent of the contracts in the COCOROADS portfolio, underestimated project costs and failed to adequately manage contracts. - An Audit by the Ghana Audit Service found that ECG purchased electricity meters to the value of USD 145 million via 50 contracts without adhering to the Public Procurement Act. *Source: tarea2026073 - 131.* ### 150. Strong project and portfolio management and structured adjustment practices are critical ### Strong project and portfolio management and structured adjustment practices are critical ### Project and portfolio management: findings and practices - Strong project and portfolio management and structured adjustment practices are critical for ensuring SOE-led infrastructure is delivered on time and within budget. - Essential elements: - Clear governance arrangements with defined accountability. - Qualified project teams. - Decision-making authority aligned to project size. - For megaprojects or highly complex investments, expertise at board and senior management level is particularly important. - Support mechanisms: specialist commercial, engineering and contract-management capability, gateway reviews, and escalation arrangements for emerging risks. - Formal change-control processes should govern any adjustment in scope, schedule or cost, with transparent documentation and justification. - Ongoing portfolio oversight and assurance to challenge assumptions, validate forecasts and provide scrutiny at key delivery milestones. - Contracts must be paid on time as a key element of reliable project execution. - Current arrangements: - The PIM regulations set out arrangements for project management and portfolio monitoring, but these do not apply to all SOE projects. - Many individual SOEs have their own portfolio management practices. - Procurement framework requires contract review where costs increase by more than 10 percent of the original contract value, but these reviews do not reexamine the continuing merit of the project or systematically adjust project scope, schedule or costs. ### Maintenance and asset registry: findings and benchmarks - Adequate maintenance funding and comprehensive, regularly updated asset registers are essential to sustain performance and value of SOE-owned infrastructure. - Asset registers should capture: asset age, condition, location, technical characteristics, maintenance history and climate exposure to support risk-based planning and realistic capital budgeting. - International experience shows ring-fenced maintenance budgets and performance-linked incentives strengthen discipline and counter bias toward new construction. - Where maintenance is deferred or data are weak, independent technical audits or regulator-led condition reviews can provide assurance. - Most infrastructure-oriented SOEs have comprehensive and regularly updated asset registers, but routine maintenance budgeting is insufficient to maintain service standards. - Benchmark for minimum routine maintenance cost across several asset classes: at least in the range of 2–3 percent of replacement values. - Case evidence: In the main infrastructure investing SOEs in Ghana, spending on routine maintenance is far below this level; inadequate maintenance contributes to high technical losses in electricity transmission and distribution and service interruptions. - Figure reference: Routine Maintenance Budgeting in Infrastructure SOEs (most recent year available) displays routine maintenance spending as % Replacement Cost for: - Electricity Company of Ghana - Ghana Water Company - GRIDCO - Ghana Airports Company - Volta River Authority - (Visual shows a “Minimum adequate levels” marker at 2–3 percent) ### Key recommendations (numbered in source) - 11. Ensure that all major projects by SOEs are subject to independent assurance to assess risks, validate cost and schedule estimates and review planned benefit (MOF, SIGA, December 2026). - 12. Include SOE investment plans and project targets in the strategic plans and performance reviews by SIGA and MOF (MOF, SIGA, December 2026). - 13. Require major infrastructure SOEs to publish annual plans for new, ongoing, and maintenance projects, and their funding sources (MOF, SIGA, December 2026). ### Annex I — QFA Reporting Template: key elements (example) - Purpose: identification and quantification of QFAs carried out by public entities and SOEs; recommended for critical SOEs on a regular basis. - Sections: - A. Basic Information: Reporting Entity; Sector; Reporting Period; Government Directive? Yes / No / Implicit; Legal / Policy Basis. - B. Identification of Potential QFAs: Provides goods/services below cost-recovery? Yes / No; Applies administered prices/tariffs for social reasons? Yes / No; Provides credit at below-market interest rates? Yes / No; Bears non-commercial risks on behalf of government? Yes / No; Undertakes activities without compensation? Yes / No. - C. Description of the QFA: Type of QFA: Price subsidy / Credit subsidy / Risk absorption / Service obligation; Beneficiary; Policy Objective; Compensation Provided? Full / Partial / None. - D. Quantification Method: - 1. Benchmark Definition: Market price / interest rate; Cost-recovery price; Commercial risk-adjusted return. - 2. Financial Impact Calculation formulas: - Price or Service QFA: QFA Cost = (Benchmark Price – Actual Price) × Quantity Supplied - Credit QFA: QFA Cost = (Market Interest Rate – Applied Rate) × Outstanding Loan Balance - Risk Absorption / Guarantees: QFA Cost = Probability of Default × Loss Given Default - 3. Estimated Annual Cost: Gross QFA Cost; Budget Compensation; Net QFA Cost. - E. Fiscal Risk Assessment: Predictability: Low / Medium / High; Contingent Liability: Yes / No; Impact on Entity Financial Viability: Low / Medium / High; Potential Budget Impact: Low / Medium / High. - F. Accounting and Reporting Treatment: Recorded in Budget? Yes / No; Reflected in SOE Financial Statements? Yes / No; Disclosed in Fiscal Risk Statement? Yes / No; GFSM Treatment: Subsidy / Transfer / Capital Injection. ### Annex II — Fiscal Risk Statements: country examples and lessons - Principles: anchor FRS in the budget process, provide systematic coverage of SOEs and contingent liabilities, quantify risks where feasible and link them to fiscal aggregates and policy responses. - Zambia: - Published a standalone FRS alongside the annual budget documents. - FRS broadened to cover macroeconomic risks, quantitative analysis on SOEs, PPPs, contingent liabilities, local authorities, other obligations, and effects of climate change. - SOEs hold assets exceeding 30 percent of GDP and liabilities of about 26 percent of GDP. - Georgia: - FRS annexed to the annual budget documentation; covers macro-critical SOEs, financial performance, risk ratings, key contingent liabilities, power purchase agreements, guarantees, and quasi-fiscal activities, particularly in the energy sector. - Includes qualitative analysis and increasing quantification of risks, financial indicators for major SOEs and scenario-based assessments; integrates SOE risks into the medium-term fiscal framework and debt sustainability analysis. - Mongolia: - FRS published alongside the annual budget with strong emphasis on SOEs, particularly mining and energy. - Detailed disclosure of SOE financial performance, debt, aggregate quasi-fiscal activities, contingent liabilities and scenario analysis linking SOE risks to macro-fiscal outcomes. ### Annex III — SOE dividend policies, practices and examples - General points: - Dividends can be a significant revenue stream for the state budget. - SOEs’ investment potential depends on profits retained; balanced and predictable dividend policy supports investment planning. - Annual determination of dividends that varies significantly year-to-year precludes sustainable investment planning. - Dividends should be paid out of profits and must not compromise the entity’s capital base. - Factors to consider when setting dividend policy: type of industry; age of company; need for additional capital; business cycle; profit trends. - Dividend models and international examples: - “Negotiation” Model: ratio or dividend expectation set; SOE boards propose; level negotiated between SOE board and Ownership Entity. - Finland, New Zealand, South Korea, Sweden: described practices where boards propose and negotiate dividend levels with ownership entities. - Set Percentage of Net Income: - Ireland: general dividend expectation of 30% of net income for commercial SOEs (generally informal). - Lithuania: SOEs required to pay dividends of at least 7% of equity but not exceeding 80% of company profits. - Netherlands: general dividend expectation of 40% of SOEs net income as government ownership policy; in 2014 only nine of the 26 SOEs distributed 40%. - Switzerland: dividend expectations communicated through annual strategic objectives, often as a percentage of net income or free cash flow. - Extraordinary Dividends: may be imposed occasionally to distribute capital surpluses or meet budgetary needs; examples noted in the United Kingdom, Norway, Sweden, Estonia, Netherlands, Poland and other countries. - Ghana context and policy suggestion: - Peer-country practices: Brazil requires minimum of 25 percent of net income; India mandates at least 30 percent of profit after tax or 5 percent of net worth, whichever is higher; Romania, Latvia, Bulgaria, Serbia, Uzbekistan typically set minimum at 50 percent of net profit. - Recommendation for Ghana: consider adopting a simple, fixed-rate dividend policy requiring all profitable SOEs to pay a minimum range from their net profits (e.g. between 30 and 50 percent of net profit) as dividends to the state each year, fixed for a 3–5-year period, to balance government revenue needs with SOE financial sustainability. *IMF Technical Assistance Report — selected sections from the supplied content unit* ### Annex IV. SOE Ownership Policy Review ### Annex IV. SOE Ownership Policy Review ### Executive summary - SOP remains more advanced on governance matters than on fiscal integration. - Main opportunity: build on the existing framework by strengthening MOF–SIGA coordination, building effective and timely mechanisms of SOE financial data exchange between SIGA and MOF, embedding systematic identification and quantification of quasi-fiscal activities, and explicitly linking SOE financial oversight to fiscal risk analysis and budget processes. - Goal: move Ghana from good governance architecture toward a fully operational, fiscally anchored SOE ownership model consistent with IMF best practice. ### Institutional roles and centralization - SOP assigns SIGA a clear role in monitoring performance, enforcing governance standards, and representing the state’s ownership interests, while recognizing the MOF’s mandate over fiscal policy, public finances, and macro-fiscal risk. - SOP broadly reflects the OECD SOE Guidelines on centralizing the ownership function, although institutional responsibilities could be defined more clearly. - SIGA established as central ownership entity with portfolio-wide mandate — described as "Aligned" with OECD Guidelines in the comparative review. - MOF role acknowledged but fiscal risk interface with SIGA not fully operationalized — identified as a "Gap vs. IMF". ### Fiscal oversight and fiscal risk integration (key gaps) - SOP emphasizes financial discipline and transparency but: - Does not explicitly require identification, quantification, and reporting of quasi-fiscal activities (QFAs) undertaken by SOEs — a core requirement under the IMF Fiscal Transparency Code (Pillar III) and emphasized in the Fiscal Risks Toolkit. - Does not mandate systematic disclosure of implicit guarantees, arrears accumulation, or policy-driven losses (e.g., non-cost-reflective tariffs or administered prices) — critical sources of fiscal risk in Ghana’s energy and cocoa sectors. - Stops short of fully operationalizing the fiscal risk interface between SIGA and MOF; cooperation is encouraged but SOP does not explicitly require that SOE financial plans, borrowing, guarantees, and contingent liabilities be systematically integrated into MOF’s fiscal risk analysis and medium-term fiscal framework. - Result: fiscal implications of SOE operations may remain partially obscured, limiting MOF’s ability to anticipate and manage shocks. ### Governance, boards, and performance contracts (strengths and limitations) - SOP emphasizes performance contracts, board evaluations, and separation of board and management roles — reflects international good practice and OECD Guidelines on SOE board responsibilities, merit-based appointments, fiduciary duties, and performance monitoring. - IMF experience suggests performance contracts are most effective when they include financial sustainability metrics (e.g., leverage, liquidity, arrears, and subsidy dependence) and are explicitly linked to fiscal risk thresholds. - SOP currently places more weight on operational and governance compliance than on forward-looking financial risk indicators — described as "Partially aligned" with IMF guidance on performance monitoring. - Practical implementation of SOE board appointment and composition remains to be improved to de-politicize SOE boards: - Suggested gradual measures: reduce the number of active politicians/high level officials on SOE boards and raise the number of professional directors with sector expertise. ### Transparency, reporting, and disclosure - SOP is well structured around regular SOE reporting and public disclosure. - Expansion of State Ownership Reports and standardized reporting templates reflects OECD SOE Guidelines and supports IMF objectives on fiscal transparency — classified as "Aligned". - Remaining gaps versus IMF standards: - SOP does not yet require publication of a comprehensive SOE fiscal risk statement. - SOP does not explicitly link SOE disclosures to the budget documentation. - SOP would benefit from further progress toward aggregated SOE reporting, including balance-sheet exposure, foreign-exchange risk, and stress-testing of large SOEs. - These gaps could be closed in the upcoming SOP revision or its conversion into the State Ownership Law. ### Comparative review highlights (selected entries from the table) - State’s Role as Owner: Clearly defines state ownership objectives and roles; establishes centralized ownership through SIGA — Status: Aligned. - Centralization of Ownership Function: SIGA established as central ownership entity with portfolio-wide mandate — Status: Aligned. - Role of MOF: MOF role acknowledged but fiscal risk interface with SIGA not fully operationalized — Status: Gap vs. IMF. - Financial Oversight & Fiscal Risks: Emphasizes financial discipline but lacks explicit fiscal risk framework — Status: Gap vs. IMF. - Quasi-Fiscal Activities (QFAs): QFAs acknowledged implicitly but not systematically identified or costed — Status: Gap vs. IMF. - Board Governance & Appointments: Strong provisions on board roles, performance, and accountability — Status: Aligned. - Performance Monitoring: Performance contracts emphasized; limited focus on financial risk metrics — Status: Partially aligned. - Transparency & Disclosure: Annual State Ownership Reports published and expanding in coverage — Status: Aligned. - Debt, Guarantees & Contingent Liabilities: Policy references oversight but lacks systematic fiscal integration — Status: Gap vs. IMF. - Integration with Budget Process: Limited explicit linkage to budget documentation — Status: Gap vs. IMF. ### Policy implications and recommended priorities - Strengthen MOF–SIGA coordination and establish effective, timely SOE financial data exchange mechanisms between SIGA and MOF. - Embed systematic identification, quantification, and public reporting of QFAs and implicit guarantees, arrears accumulation, and policy-driven losses (e.g., non-cost-reflective tariffs or administered prices). - Explicitly link SOE financial oversight to MOF fiscal risk analysis and the medium-term fiscal framework; require that SOE financial plans, borrowing, guarantees, and contingent liabilities be integrated into MOF fiscal risk processes. - Enhance performance contracts to include financial sustainability metrics (leverage, liquidity, arrears, subsidy dependence) and tie them to fiscal risk thresholds. - Improve board composition implementation to de-politicize boards by reducing active politicians/high level officials and increasing professional directors with sector expertise. - Advance aggregated SOE reporting requirements to include balance-sheet exposure, foreign-exchange risk, and stress-testing of large SOEs; publish a comprehensive SOE fiscal risk statement and link SOE disclosures to budget documentation. *Annex IV. SOE Ownership Policy Review — IMF Technical Assistance Report.* --- _Source: https://www.imf.org/-/media/files/publications/tar/2026/english/tarea2026073.pdf_