World Bank Pledges $15M to Support Ghana’s SOE Reforms
The World Bank has announced its commitment to provide $15 million to Ghana under the $150 million Public Financial Management for Service Delivery Program to support reforms aimed at improving the performance of State-Owned Enterprises (SOEs).
According to the World Bank’s Country Director for Ghana, Robert Taliercio O’Brien, the funding will be disbursed once the State Interests and Governance Authority (SIGA) meets agreed performance targets. One of the key milestones under the program is the successful preparation and publication of the 2023 State Ownership Report (SOR), which highlights the underperformance and growing liabilities of Ghana’s SOE sector.
The report reveals that total liabilities of SOEs reached GHS 215.5 billion in 2023, representing a 21.81% increase from GHS 176.9 billion in 2022. Energy sector SOEs, including the Electricity Company of Ghana (ECG), Volta River Authority (VRA), and Northern Electricity Distribution Company (NEDCo), account for about 63% of these liabilities. The financial burden includes GHS 68 billion owed by ECG and GHS 32 billion owed by Ghana Cocoa Board (COCOBOD), raising concerns about sustainability and fiscal stability.
Mr. O’Brien emphasized the need for urgent SOE reforms to reduce their dependence on government support and enhance their ability to generate revenue. Key measures include strengthening corporate governance, improving financial controls, and incentivizing performance at both the management and board levels.
He pointed to global examples of successful SOE reforms, including Chile’s corporate governance model, Uruguay’s performance-based SOE management contracts, and The Gambia’s energy sector improvements. These cases, he said, provide valuable lessons for Ghana as it seeks to transform its SOE sector.
The World Bank is also supporting SOE reforms through a $300 million budget support instrument, which includes policy actions targeted at restructuring Ghana’s energy sector.
