As Ghana prepares to finally exit the era of direct financial rescue under the International Monetary Fund (IMF) programme, there are growing concerns over whether the country can sustain fiscal stability amid the widespread inefficiencies in the State-Owned Enterprises (SOEs) sector.
Banking and corporate governance consultant, Dr. Richmond Atuahene fears that without drastic reforms, SOEs could become the next major threat to fiscal stability post IMF bailout.
Dr. Richmond Atuahene explains that the country risks undoing hard-won economic gains if loss-making SOEs continue to depend on government bailouts, guarantees, and politically driven interventions.
In his latest policy analysis, Dr. Atuahene argues that many SOEs have become structural drains on public finances, forcing government to absorb debts, operational losses, and contingent liabilities that ultimately widen the fiscal deficit and increase public debt.
To prevent Ghana from slipping back into another fiscal crisis in the post-IMF era, he proposes six strategic reforms aimed at repositioning SOEs from being a burden on taxpayers to becoming efficient, accountable, and commercially viable institutions.
Reduce State Dominance and Expand Private Sector Participation
Dr. Atuahene believes the government must make a deliberate political decision to gradually move commercial activity away from inefficient state enterprises toward private sector-led participation.
According to him, persistent losses by SOEs are not merely operational problems; they have become direct fiscal threats that weaken the national budget through recurring bailouts and debt guarantees.
He therefore recommends pragmatic divestiture policies including outright sales, leases, joint ventures, mergers, and even liquidation of chronically loss-making entities.
Drawing historical parallels, he noted that Ghana successfully divested about 192 state enterprises between 1989 and 1999 through various models, generating significant value while reducing fiscal pressure on the state.
For him, the government cannot continue acting as owner, financier, rescuer, and regulator of failing commercial enterprises all at once.
Strengthen Governance and Reduce Political Interference
Another major recommendation focuses on governance reforms within public institutions. Dr. Atuahene argues that excessive political influence in SOE management and the civil service often weakens accountability, promotes inefficiency, and fuels corruption.
To reverse the trend, he is calling for stronger anti-corruption mechanisms, improved transparency, stricter accountability systems, and more professional public sector management insulated from partisan interference.
He also believes decentralization reforms must be matched with stronger local government accountability capacity so that transparency is not merely administrative rhetoric but an enforceable governance culture.
This recommendation seeks to ensure that SOEs are managed like professional businesses rather than political patronage structures.
Restructure Key High-Risk Institutions Like ECG and COCOBOD
Dr. Atuahene further argues that Ghana cannot solve its fiscal challenges without confronting the structural weaknesses within major state institutions. He specifically points to the Electricity Company of Ghana and COCOBOD as critical examples.
For ECG, he recommends operational reforms and potential private sector participation to improve efficiency and reduce technical and commercial losses within the energy sector.
For COCOBOD, he proposes a comprehensive restructuring that narrows the institution’s focus strictly to cocoa production and marketing, rather than engaging in quasi-fiscal activities that place additional burdens on government finances.
He insists government must reduce reliance on guarantees and transfers to underperforming SOEs if fiscal discipline is to become sustainable beyond the IMF programme.
Expand Public-Private Partnerships to Close Infrastructure Gaps
The corporate governance expert is also advocating for a stronger Public-Private Partnership (PPP) framework modeled partly on successful international examples such as Canada’s infrastructure financing approach.
According to him, Ghana must increasingly leverage private sector capital, expertise, innovation, and operational efficiency to address infrastructure deficits, especially in transport, logistics, and trade connectivity.
Rather than relying solely on state financing, he believes PPPs can reduce pressure on public debt while accelerating infrastructure development and service delivery.
Introduce Strict Fiscal Rules and Performance Contracts for SOEs
One of the most forceful recommendation from Dr. Atuahene relates to fiscal discipline and accountability standards for SOEs. He argues that government oversight must move beyond merely reporting annual losses to enforcing binding operational and fiscal performance benchmarks.
Under his proposal, SOEs that consistently fail efficiency targets should no longer qualify automatically for government guarantees, subsidies, or transfers unless they are undergoing approved restructuring programmes.
He is also calling for mandatory performance contracts with measurable fiscal targets; Annual Fiscal Risk Statements quantifying SOE liabilities; Explicit budget caps on subsidies and transfers; Parliamentary approval for restructuring-related guarantees; and Elimination of politically motivated non-commercial interventions.
Adopt OECD Corporate Governance Standards and Independent Oversight
Finally, Dr. Atuahene believes Ghana’s SOEs must align with internationally recognized corporate governance standards, particularly the updated 2024 OECD Guidelines on Corporate Governance of State-Owned Enterprises.
These frameworks emphasize professionalism, transparency, operational efficiency, and institutional independence.
A key part of the recommendation involves strengthening the authority and independence of SOE boards to negotiate performance contracts, commission independent audits, and impose sanctions on underperforming management teams.
According to him, stronger board oversight is essential if SOEs are to operate with commercial discipline instead of political convenience.
The Bottomline
Dr. Atuahene’s recommendations arrive at a critical moment for Ghana’s economy. While the IMF programme helped restore a degree of macroeconomic stability, economists increasingly warn that unresolved inefficiencies within the SOE sector could quietly rebuild the same fiscal pressures that triggered the crisis in the first place.
The challenge for government now is no longer simply reducing deficits on paper, but fundamentally changing how public enterprises are governed, financed, and held accountable.
