The International Monetary Fund (IMF) has raised concerns over the continued influence of political considerations in the appointment of board members and chief executives of Ghana’s state-owned enterprises (SOEs).
According to the Fund, the practice is weakening the independence of boards and limiting their ability to provide effective oversight of state enterprises.
In its 2024 Technical Assistance Report on Ghana’s SOE sector, the IMF noted that although the country has mechanisms intended to promote structured and merit-based appointments, the process remains largely centralised around the Presidency.
The Fund observed that several major SOEs have boards containing prominent political figures, including ministers, Members of Parliament and senior political party officials.
The Ghana Ports and Harbours Authority (GPHA) was cited as one example, with the IMF pointing to the political affiliation of its board leadership. The Volta River Authority (VRA) was also referenced for having politicians serving alongside technocrats and a traditional leader.
The IMF said the composition of such boards differs from Organisation for Economic Co-operation and Development (OECD) standards, which favour independent and professionally qualified individuals over active politicians in SOE governance.
CEO appointments also a concern
The Fund further identified the appointment of chief executives and managing directors as an area requiring reform.
It said SOE boards have limited involvement in selecting their chief executives, with appointments generally made by the President, often in consultation with the responsible minister.
The IMF argued that this arrangement weakens the direct accountability relationship between boards and management because boards may have limited authority over the selection of the executives whose performance they are expected to supervise.
It also raised concerns about limited disclosure of the criteria used to appoint board members and executives, as well as insufficient public information on their performance evaluations.
COCOBOD governance highlighted
The Ghana Cocoa Board (COCOBOD) also featured in the IMF’s assessment, particularly over the composition of its committees.
The report described COCOBOD as having a “politicised committee ecosystem” and noted that senior political figures had played leading roles on important committees, including its Finance Committee.
While acknowledging the significance of the committees’ responsibilities, the IMF said strong political involvement could affect their independence and make it more difficult to balance the organisation’s commercial responsibilities with its broader social obligations.
The Fund consequently identified political influence in appointments, inadequate separation of ownership and policy functions, and weaknesses in transparency as broader governance challenges affecting Ghana’s SOE sector.
Financial risks linked to weak oversight
The IMF also drew attention to irregularities recorded within SOEs, particularly those operating in the energy and roads construction sectors.
It said a significant share of irregularities identified by the Auditor General occurred in these areas, with the findings pointing to weaknesses in management, political interference and inadequate board oversight.
The governance concerns are particularly significant given the scale of financial obligations carried by Ghana’s SOEs.
The IMF reported that aggregate SOE liabilities reached about GH¢282 billion in 2024, equivalent to approximately 25 per cent of Ghana’s Gross Domestic Product (GDP).
The ten largest SOEs accounted for about 85 per cent of those liabilities, with the Electricity Company of Ghana (ECG), VRA and COCOBOD among the entities presenting substantial fiscal risks.
According to the Fund, SOEs can expose government finances to significant risks through government support, government-backed borrowing, arrears and other quasi-fiscal activities.
IMF pushes for professional appointments
The IMF said Ghana already has a foundation for reform through the State Ownership Policy, which assigns the State Interests and Governance Authority (SIGA) responsibility for developing a framework for nominating and vetting candidates for board and chief executive positions.
The framework is also expected to establish a pool of potential directors and procedures for the removal of board members and executives.
However, the Fund said implementation remains at an early stage.
It has therefore recommended that Ghana fully operationalise a transparent and merit-based appointment system for SOE boards and chief executive positions.
The IMF is also calling for a gradual reduction in the number of active politicians serving on SOE boards, with greater representation for independent professionals and sector specialists.
It further recommends structured training for board members in corporate governance and board effectiveness to strengthen oversight, particularly in highly technical sectors where qualified candidates may be limited.
The Fund’s assessment places SOE governance at the centre of efforts to reduce fiscal risks, improve accountability and strengthen the financial sustainability of state-owned enterprises.
