SOEs account for 25% of Ghana’s total debt stock
According to Finance Minister Ken Ofori-Atta, approximately 25% of Ghana’s assessed debt burden is attributed to non-central government operations, primarily State-Owned Enterprises (SOEs) such as COCOBOD (Ghana Cocoa Board) and those in the energy sector.
Currently, the country’s total debt stock is unknown as the Bank of Ghana’s May 2023 Summary of Economic and Financial Data failed to provide an update on the country’s domestic and external debt stock as of March 2023. The data presented by the Central Bank pertained to December 2022, when Ghana’s total debt stock stood at an alarming GHS 434.6 billion or $52.2 billion, amounting to approximately 71.2% of GDP.
Going by this, the 25% stake of SOEs in the country’s total debt stock should amount to 108.6bn.
Within this total debt stock, the external debt accounted for GHS 240.2 billion or $28.9 billion, equivalent to 39.4% of GDP, while the domestic debt stock was recorded at GHS 194.4 billion, making up 31.9% of GDP.
Mr. Ofori-Atta believes that implementing better governance standards for these institutions will address their liabilities and promote their growth.
During a recent press conference, the Finance Minister emphasized the importance of committed and wide-ranging structural reforms to address various weaknesses and enhance resilience in key areas.
These reforms encompass tax policy and tax administration, expenditure commitment control and arrears clearance, financial stability, financial sector plans, review of statutory funds, governance and corruption, debt management, fiscal credibility, and reformation of SOEs in the energy and cocoa sectors.
Additionally, the Finance Minister highlighted several structural reforms aimed at fostering fiscal discipline and transparency. These include enhancing revenue administration and tax policy, operationalizing the Human Resource Management Information System, strengthening spending controls and preventing arrears accumulation, and streamlining earmarked funds.
Furthermore, Mr. Ofori-Atta mentioned that the government is transitioning from central government reporting to general government reporting and from cash-based to accrual-based reporting.
The Finance Minister expressed the government’s commitment to these reforms and its pursuit of innovation and strengthened partnerships.
He also mentioned the government’s efforts to secure significant support from multilateral partners for Ghana, backed by the renewed drive for reforms.
