The World Bank has identified that many of Ghana’s state-owned enterprises (SOEs) in the energy and agricultural sectors are on a collision course with the nation’s public finances, threatening the country’s fiscal health.
The Electricity Company of Ghana (ECG), for instance, is projected to post a $2.2 billion funding gap by the end of 2025 if urgent reforms are not undertaken.
The stark warning came from Robert Taliercio, the World Bank’s Country Director for Ghana, Sierra Leone, and Liberia, at the launch of the 9th Ghana Economic Update.
He further revealed that the situation of ECG could worsen without urgent actions, as the total shortfall could balloon to over $9 billion by 2026. The Bretton Woods institution says the public utility company is grappling with non-cost-reflective tariffs, high distribution and collection losses, and mounting foreign exchange and inflationary pressures.
Unfortunately, the World Bank observes that despite the government’s Energy Sector Recovery Program (ESRP), the problems persist. In 2024, ECG added fresh debts to independent power producers and fuel suppliers, piling on liabilities that already strain the national budget through annual bailouts.
“The government’s Energy Sector Recovery Program (ESRP) has not solved these problems, and every year, the government must provide significant financial support,” Taliercio remarked.
He continued, “The Electricity Company of Ghana (ECG) built up new debts to independent power producers and fuel suppliers in 2024. If no action is taken, ECG is expected to have a funding gap of $2.2 billion in 2025, with total shortfalls reaching over $9 billion by the end of 2026.”
On the agricultural front, the situation is almost the same. The Ghana Cocoa Board is also grappling with financial instability despite high global cocoa prices. Weak production, large debts to suppliers, and costly “quasi-fiscal” activities outside its core mandate are adding to fiscal pressures.
“Despite high global cocoa prices, Ghana’s cocoa production is weak, and COCOBOD owes large amounts to its suppliers. Its involvement in activities beyond its main business (quasi-fiscal operations) further increases financial risks,” the World Bank Director indicated.
To protect the country’s fiscal health and safeguard the future, Taliercio says strengthening oversight and accountability across these SOEs is crucial.
Without decisive action, he warned, these fiscal leakages could derail economic stability, force further government intervention, and crowd out spending in other critical areas such as infrastructure and social protection.
“It is crucial to strengthen oversight and accountability in both the energy and agricultural sectors. This will help reduce risks and ensure long-term stability,” he recommended.
