Ghana's GH¢1.2bn accounting blunder: How liability overstated in public accounts

Ghana's financial management has come under scrutiny after the Auditor-General discovered a GH¢1.24 billion overstatement in the country's national accounts for 2025. The error stems from incomplete accounting treatment of service concession arrangements—the government recorded substantial new liabilities without properly documenting corresponding assets, distorting the country's true financial position.

The Controller and Accountant-General's office reported GH¢40.35 billion in service concession liabilities, but verification by the Ghana Audit Service found the actual amount should have been GH¢39.11 billion. This GH¢1.2 billion gap represents one of the most significant accounting findings in the Auditor-General's 2025 report and raises serious questions about the reliability of Ghana's public financial reporting.

How the error occurred

Service concession arrangements function like government "build-now-pay-later" contracts, where private companies construct or upgrade critical infrastructure—such as roads, hospitals, or ICT systems—in exchange for government payments spread over time. International Public Sector Accounting Standards (IPSAS 32) require that when governments enter these deals, they must record both a corresponding asset (the infrastructure) and a matching liability (the repayment obligation).

The Auditor-General identified two critical failures in how the CAG handled these accounts. First, when additional expenditure of GH¢1.2 billion was added to the liability side of the balance sheet, the corresponding asset value was never increased to match—a fundamental accounting principle violation. Second, the audit revealed "inadequate reconciliation and review" processes and "weaknesses in compilation and validation" of records tracking these multi-billion-cedi arrangements before accounts were finalised.

The error essentially meant Ghana's books showed it owed substantially more to private sector partners than it actually did, creating a false picture of the nation's obligations and financial health.

Why this matters for Ghana

Although GH¢1.2 billion represents a fraction of Ghana's total national debt, its exposure as a top finding in the Auditor-General's report carries significant implications. Misstatements of this magnitude undermine Parliament's ability to make informed budgetary decisions and can mislead international investors and development partners about Ghana's true financial position and creditworthiness.

The error also raises concerns about systemic weaknesses in Ghana's financial management infrastructure. If the CAG's office failed to properly reconcile and validate service concession liabilities, questions arise about whether other large financial obligations are similarly misstated. This directly affects Ghana's credibility in international borrowing markets and development financing negotiations.

The discovery echoes a previous high-profile error when the Auditor-General's report was initially misinterpreted to suggest a Defence Ministry official received GHS 427 million in unearned salaries—later clarified as a "transpositional" error. That incident demonstrated how accounting errors, even when eventually corrected, can damage public confidence and complicate policy discussions.

For ordinary Ghanaians, these accounting lapses matter because they affect government credibility when negotiating loans, setting tax policy, and allocating resources to public services. Inaccurate financial statements make it harder for citizens to hold government accountable for how national resources are managed.

What happens next

The Auditor-General's report has flagged the error formally, placing responsibility on the CAG's office to implement corrective measures. Strengthening reconciliation processes, improving validation systems, and ensuring staff training on IPSAS standards will be essential steps to prevent similar discrepancies. The report serves as a crucial accountability mechanism, though implementation of recommendations ultimately depends on the government's commitment to addressing identified weaknesses in public financial management.