BoG’s Negative Equity, ECG’s Debt, & COCOBOD’s Losses Undermining Progress of Other State Enterprises

Although Ghana’s State Enterprises (SEs) recorded notable progress in the 2024 financial year, deep-seated challenges at some of the country’s most strategic and critical institutions are threatening to derail overall progress.

This is according to the Director-General of the State Interest and Governance Authority (SIGA), Prof. Michael Kpessa Whyte, in the latest 2024 State Ownership Report.

The report, cited by The High Street Journal, highlighted about four major troubled spots in state entities posing danger to the overall growth and expansion of the country’s state-owned enterprises.

The Bank of Ghana’s (BoG) negative equity, the crippling debts of the Electricity Company of Ghana (ECG) and Ghana Water Limited (GWL), and the persistent financial and operational woes of COCOBOD, Ghana’s cocoa regulator, Prof. Kpessa Whyte says, if not tackled, could derail the gains recorded so far.

The financial regulator, the central bank’s negative equity, financial analysts say, not only weakens its ability to anchor financial stability but also sends worrying signals to investors and markets about Ghana’s macroeconomic resilience.

In the utility sector, ECG’s ballooning debts, which are mostly tied to inefficiencies in revenue collection and high system losses, continue to weigh heavily on public finances, while Ghana Water Limited struggles with similar financial imbalances.

The most glaring is COCOBOD, whose role in sustaining Ghana’s top foreign exchange earner is increasingly at risk. With ballooning debt, falling cocoa production, and the high costs of financing the so-called “cocoa roads,” the regulator is struggling to balance national development commitments with financial sustainability.

“Despite some gains, significant risks persist. The Bank of Ghana’s negative equity, the mounting debts of the Electricity Company of Ghana (ECG) and Ghana Water Limited (GWL), along with COCOBOD’s challenges of debt, low production, and costly cocoa roads, continue to undermine the progress made by other State Enterprises (SEs) in our portfolios,” portions of the report read.

These threats, SIGA fears, could undermine the impressive strides made by other well-performing State Enterprises in transport, agriculture, finance, and energy. This is because when the largest institutions are underperforming, their weight pulls down the progress of the entire portfolio.

The SIGA, which oversees state-owned firms, is spearheading reforms to reverse these trends. The introduction of the State Ownership Policy and a new Code of Corporate Governance are expected to strengthen management and accountability across specified entities.

In addition, capacity-building programs for boards and executives are aimed at instilling stronger corporate discipline.

“It is essential that the reforms in the SE sector, led by the State Interest and Governance Authority (SIGA), continue. With the introduction of key policy documents such as the State Ownership Policy (SOP) for Specified Entities and the Code of Corporate Governance for Specified Entities and Public Service Organizations, along with efforts to enhance the capacity of boards and management, SIGA is well-positioned to accelerate transformative reforms,” the report further indicated.

For the Ghanaians, the impact of the situation is real and direct. ECG’s debts can translate into unstable electricity supply and rising tariffs, COCOBOD’s inefficiencies threaten farmer incomes and cocoa revenues, while BoG’s weak balance sheet risks higher inflation and currency volatility.

While Ghana’s State Enterprises, according to the 2024 State Ownership Report, show signs of recovery, the weaknesses of its biggest institutions remain a ticking time bomb that must be addressed with urgency.

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