The World Bank has issued a stark warning to Ghana, stressing that the country’s poorly performing State-Owned Enterprises (SOEs), particularly in the energy and agriculture sectors, continue to pose significant fiscal risks.

In its latest economic analysis, the Bretton Woods institution called for urgent reforms and strengthened oversight to safeguard long-term stability and fiscal sustainability.

According to the World Bank, Ghana’s SOEs remain a structural weakness in the economy, contributing to persistent fiscal imbalances. The energy sector, in particular, has been plagued by inefficiencies, operational losses, and mounting arrears. Similarly, some state-run agricultural ventures have struggled to remain viable, draining public resources without delivering commensurate returns.

“These inefficiencies in SOEs are undermining the government’s fiscal consolidation efforts and exposing the economy to unnecessary risks. A comprehensive reform agenda, including governance improvements and transparency measures, is urgently needed.”
World Bank

The call comes at a time when Ghana is implementing a fiscal discipline programme under an International Monetary Fund (IMF)–supported arrangement, designed to stabilise the economy and restore debt sustainability.

Beyond SOEs, the World Bank expressed concern about Ghana’s weak revenue performance. Between 2020 and 2024, the country’s tax-to-Gross Domestic Product (GDP) ratio averaged just 12.5%—well below that of regional peers.

The low ratio, according to the report, is a result of widespread VAT exemptions, tax evasion, and underutilisation of revenues from the extractive sector. These gaps have left the government heavily dependent on borrowing, further complicating the debt situation. “Reforming SOEs must go hand in hand with improving revenue mobilisation to create fiscal space for priority investments,” the World Bank advised.

Fiscal Slippages in 2024 and Recovery in 2025

The report also pointed to fiscal setbacks in 2024, largely due to election-related spending and the accumulation of arrears. The excess expenditure led to fiscal slippages, undermining earlier gains made under the fiscal consolidation plan.

However, the World Bank acknowledged that Ghana’s fiscal discipline improved significantly in the first half of 2025, driven by strong expenditure restraint and the adoption of new fiscal rules. These reforms helped limit spending overruns and restored some investor confidence. “While the 2024 slippages were unfortunate, the improved discipline in 2025 demonstrates that Ghana can stay on track with the right policy measures,” the institution said.

On the debt front, the World Bank noted that Ghana’s public debt is now assessed as sustainable in the medium term, provided that the government maintains strong fiscal discipline and completes its external debt restructuring process.

The restructuring effort, which covers domestic, bilateral, Eurobond, and commercial creditor claims, has made significant progress. A Memorandum of Understanding (MoU) was signed with the Official Creditors Committee in January 2025, the Eurobond exchange was finalised in October 2024, and negotiations with remaining commercial creditors are ongoing.

The World Bank commended Ghana for adopting tailored solutions for each creditor group, noting that the approach aligns with IMF programme parameters and could set the stage for a more sustainable debt profile.

Ghana’s path to fiscal stability hinges on striking the right balance between expenditure control, debt sustainability, and growth-oriented investments. The World Bank’s message is clear: reforms in SOEs cannot wait.

If the government can sustain fiscal discipline, complete its debt restructuring, and implement meaningful reforms in its state-owned entities, the country will be better positioned to attract investment, boost revenues, and secure long-term economic stability.