IMF Calls for Merit-Based Board Appointments at Ghana's State Enterprises

The International Monetary Fund has delivered a sharp rebuke to Ghana's approach to managing state-owned enterprises, insisting that board appointments must be determined purely on merit rather than political considerations or patronage. The warning comes as the IMF's latest country report highlights persistent structural weaknesses that threaten Ghana's fiscal stability and economic recovery efforts.

According to the report, Ghana's SOE sector remains a significant drain on public finances, with these enterprises continuing to operate at an aggregate loss whilst accumulating mounting liabilities that place increasing pressure on the central government. The IMF argues that this situation is unsustainable and demands immediate intervention.

Core Governance Reforms Needed

The Fund has recommended several key reforms to address the SOE crisis. Beyond merit-based board appointments, the IMF wants state enterprises to submit audited financial statements on time—a basic accountability measure that apparently remains problematic in Ghana's context. More ambitiously, the IMF advocates for a comprehensive strategic review of the entire SOE portfolio to determine which enterprises genuinely warrant continued state ownership.

"A strategic review of the SOE portfolio is necessary to reassess the rationale for state ownership and concentrate oversight on strategically important entities," the report states. This implies that some SOEs may be candidates for privatisation or restructuring if they cannot demonstrate clear strategic value to the nation.

The governance agenda extends beyond the boardroom. The IMF also emphasises the need to strengthen Ghana's Public Financial Management systems more broadly, recommending expansion of the Government Integrated Financial Management System to cover all central government entities and enforcing competitive procurement practices instead of the single-source tenders that have plagued Ghana's public spending.

Revenue Collection and Tax Compliance Challenges

Beyond SOE governance, the IMF report raises alarm about Ghana's persistently weak tax compliance. Despite the Ghana Revenue Authority introducing digital tools in recent years, large compliance gaps remain, reflecting what the Fund describes as structural weaknesses, insufficient use of risk-based approaches, and operational inefficiencies. A particular bottleneck is the incomplete digitisation of the VAT refund process, which creates delays and discourages compliance.

These revenue administration challenges are critical because they undermine Ghana's ability to fund essential services and repay its debt obligations—both central to the country's current economic stabilisation programme with the IMF.

Why This Matters for Ghana

Ghana has been operating under an Extended Credit Facility with the IMF since 2023, and the Fund's recommendations carry substantial weight. The insistence on merit-based SOE appointments signals international investor and creditor concerns that Ghana's public institutions are being used for patronage rather than efficient service delivery. This perception, if not addressed, can undermine investor confidence and make future borrowing more expensive.

The broader fiscal risks posed by loss-making SOEs are significant. In a resource-constrained environment where Ghana is already making difficult budget choices, every cedi lost by inefficient state enterprises is a cedi not available for healthcare, education, or infrastructure. The IMF's push for a strategic SOE review suggests that hard decisions may be necessary—potentially including the restructuring or closure of non-essential enterprises.

Additionally, the public investment management weaknesses flagged by the IMF's 2025 Project and Institutional Diagnostic assessment indicate that as Ghana scales up capital spending, the risk of wasted resources through poorly appraised projects remains high. Ensuring that all capital projects entering the budget comply with legislated appraisal procedures is essential to maximise the returns on Ghana's limited investment resources.

The government faces mounting pressure to demonstrate that it is serious about institutional reform and fiscal discipline—not merely as IMF requirements, but as necessary steps toward sustainable economic growth.