By Adnan Adams Mohammed
A startling new report from the Ministry of Finance has exposed a deep-seated culture of fiscal non-compliance within Ghana’s State-Owned Enterprises (SOEs), revealing that only seven out of dozens of entities are “highly compliant” with the Public Financial Management (PFM) Act.
The disclosure, contained in the latest 2024 SOE Health Report, has sent shockwaves through the financial sector, raising urgent questions about oversight, accountability, and the potential risk these entities pose to the national purse.
According to the Ministry, the small group of compliant entities has demonstrated rigorous adherence to financial reporting timelines, debt management protocols, and budget execution guidelines. While the Ministry did not immediately publish the full list of all reviewed entities, the “Highly Compliant” tier represents a fraction of the corporate landscape under the state’s umbrella.
Compliance with the PFM Act is not merely a bureaucratic requirement; it is a legal safeguard designed to ensure that state entities—which control billions of cedis in public assets—do not operate in a vacuum of transparency.
The non-compliance trap
The vast majority of SOEs fell into the “Low” or “Moderate” compliance categories. The Ministry identified several recurring failures.
One is delayed financial statements as many entities are years behind in submitting audited accounts
Another is unapproved spending. Significant portions of expenditure were found to have been conducted without the necessary parliamentary or ministerial approvals.
The third is inordinate debt accumulation, with the failure to report or manage inter-utility debts, which continues to create a “circular debt” crisis, particularly in the energy and water sectors.
“State-Owned Enterprises are meant to be engines of growth, not liabilities to the taxpayer,” a senior official at the Finance Ministry stated. “The PFM Act is the law of the land. Operating outside of its boundaries is no longer an option.”
Fiscal risks to the state
The lack of compliance has direct implications for Ghana’s broader economic stability. Non-compliant SOEs often require government bailouts, which bloat the national deficit and divert funds from critical social sectors like health and education.
International observers and credit rating agencies have frequently pointed to the “contingent liabilities” posed by SOEs as a major risk factor for Ghana’s debt sustainability. The Ministry’s report confirms that without a radical shift in management culture, these entities remain a “fiscal time bomb.”
Sanctions on the horizon?
The Ministry of Finance has signaled that the era of “gentle reminders” is over. Under the PFM Act, the Minister has the power to withhold budgetary support, block new loan agreements, and even recommend the removal of board members or management teams of non-compliant entities.
The Director-General of the State Interests and Governance Authority (SIGA) is expected to work closely with the Ministry to enforce the “Performance Contracts” signed by SOE heads earlier this year.
Expert reaction
Financial analysts have called for the names of the non-compliant SOEs to be made public to provide “market discipline.”
“Transparency is the first step toward reform,” said a local policy analyst. “If only seven are doing the right thing, we need to know what is happening in the boardrooms of the others. The taxpayer is the shareholder, and the shareholder deserves to know the truth.”
As the government moves to tighten its grip on state entities, the focus remains on the “Elite Seven” as a blueprint for what is possible when professional management meets legal accountability. For the rest, the clock is ticking to get their houses in order.
