Ghana’s state-owned enterprises (SOEs) concluded the 2024 fiscal year with a net deficit of Gh₵9.7 million, up from Gh₵7.1 million in 2023, despite indications of improved operational output, according to the latest State Ownership Report.
The sector’s earnings before interest and tax (EBIT) saw a notable turnaround, reaching Gh₵1.57 million in 2024, a sharp contrast to the Gh₵9.6 million loss recorded in 2022. However, this recovery was largely neutralized by escalating finance expenses, which surged by 34 percent to Gh₵9.4 million—an increase from Gh₵7.0 million in the previous year.
The report revealed that for every Gh₵1.00 earned in operating profit, SOEs spent Gh₵5.97 on interest and related financial obligations, highlighting that the sector’s weak financial results were driven more by debt servicing than by inefficiencies in operations.
Major Drivers of Financial Strain
Ghana Water Company Limited (GWCL) and the Ghana Cocoa Board (COCOBOD) emerged as the leading contributors to the sector’s finance costs, jointly responsible for nearly 59 percent of the total.
GWCL’s finance charges amounted to Gh₵3.64 million, primarily due to foreign exchange losses. The depreciation of the cedi in 2024 added Gh₵3.44 million to its dollar-denominated debt, significantly increasing its repayment burden.
COCOBOD followed with Gh₵1.88 million in finance costs, stemming from bank loans, outstanding payables, and lease commitments.
Other prominent SOEs also experienced setbacks due to high debt-related expenses. GRIDCo, which had the potential to report a net gain of Gh₵660.8 million, instead posted a net loss of Gh₵113.5 million after incurring Gh₵774.3 million in finance charges.
Ghana National Gas Company (GNGC) and Ghana National Petroleum Corporation (GNPC) were similarly affected, with finance costs of Gh₵756.3 million and Gh₵619.2 million respectively, severely impacting their bottom lines.
Debt-Driven Vulnerabilities
The report emphasized that excessive borrowing and exposure to currency volatility have rendered SOEs susceptible to refinancing challenges and interest rate swings, raising red flags about their financial resilience and long-term viability.
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