Financial management lapses among SOEs have reached about GH¢18.6 billion, according to the International Monetary Fund (IMF).

The information was contained in the IMF’s Technical Assistance Report, “Advancing SOE Fiscal Risk Management, Financial Oversight, Governance, and Investment Implementation,” which examines financial controls and the possible fiscal risks these entities could pose to government.

The financial lapses cited in the 2024 Auditor-General’s Report cover several areas, with outstanding debts and loans making up the largest portion at GH¢12.54 billion. This covers outstanding payments yet to be collected and funds that remain tied up.

A further GH¢4.58 billion involves cash-related lapses, including payments without proper documentation and revenues that were not fully accounted for.

Issues involving contracts totalled about GH¢871.82 million, while purchasing lapses stood at GH¢335.27 million.

The Auditor-General also found GH¢191.6 million in salary-related issues, GH¢77.06 million in tax issues, and GH¢4.5 million in stores-related problems.

Within the Energy and Roads Sectors, the IMF report identifies the energy and roads construction sectors among those with significant financial and purchasing issues

It notes that more than 15 per cent of payables and 6.4 per cent of the purchasing commitments in these sectors were found to be in breach of public finance regulations or statutory requirements.

The effects go beyond the institutions concerned, as ongoing financial challenges in key SOEs can ultimately increase the government’s financial burden.

Power Contracts Under ECG Procurement

ECG has been flagged for weaknesses in its contracting and purchasing processes.

A performance audit by the Ghana Audit Service found that ECG entered into 50 agreements to purchase electricity meters worth about US$145 million without following the requirements of the Public Procurement Act.

The report also highlights unrequested “take-or-pay” Power Purchase Agreements, which resulted in electricity generation capacity exceeding actual national demand.

Such agreements have created financial obligations that continue to put pressure on the power industry and government spending.

The Ghana Cocoa Board (COCOBOD) is also mentioned in the IMF report over concerns about weaknesses in its procurement and contract processes.

The report highlights issues in the way some contracts were awarded and managed, raising concerns about transparency, value for money and proper oversight.

These shortcomings could expose the state-owned enterprise to financial risks and affect the efficient use of public resources.

The IMF says addressing these gaps will require stronger procurement controls, better monitoring and greater accountability within the enterprise.