Ghana’s Finance Minister, Dr Cassiel Ato Forson, has warned that liabilities run up by state-owned enterprises (SOEs) have added the equivalent of about 3% of the country’s Gross Domestic Product (GDP) to public debt every year over the past decade, calling it a key factor behind the nation’s debt crisis.
Presenting the 2026 Mid-Year Budget Review to Parliament on Thursday, 23 July, Dr Forson said SOEs had, for the first time, been placed under the government’s commitment authorisation regime – a system designed to stop public bodies from entering spending commitments beyond their approved limits.
“For the first time, state-owned enterprises are now bound by the commitment authorisation, restraining them from spending beyond their means.
Over the last 10 years, liabilities of state-owned enterprises have added the equivalent of about 3% of GDP to Ghana’s public debt every single year,” he told MPs.
SOE arrears ‘forced government to pay’
Dr Forson said many SOEs had repeatedly failed to honour their contractual obligations, which meant successive governments were eventually forced to take over and settle those debts, significantly increasing the state’s overall borrowing.
“This occurred because state-owned enterprises failed to honour their contractual obligation, compelling government to assume and settle those liabilities. This contributed to the sharp rise in Ghana’s public debt,” he said.
The minister argued that the mounting SOE liabilities had diverted scarce public funds away from infrastructure and essential services, with money that could have gone into development instead used to plug holes in SOE finances.
“The resources that would have financed critical infrastructure were used to pay those SOEs’ debt. This is part of the reason why Ghana’s debt grew unsustainably without the bridges, roads or hospitals,” he stated.
‘Taxpayers end up paying’
Dr Forson questioned the value of enforcing strict spending controls on central government ministries, departments and even Parliament if SOEs were allowed to accumulate debts that ultimately ended up being borne by the public.
“What is the point of ensuring that ministries and even Parliament live within their means if state-owned enterprises are permitted to run up liabilities that taxpayers are ultimately forced to pay?” he asked.
He stressed that Ghana’s debt problems could not be explained solely by budget deficits recorded on the central government’s books, insisting that off-balance-sheet exposure from SOEs was a major, and often overlooked, contributor.
“It is therefore important to recognise that Ghana’s debt challenge was driven not only by fiscal deficits, but also by the unchecked accumulation of liabilities by state-owned enterprises.
This is precisely why the commitment authorisation regime would have been meaningless and ultimately ineffective had state-owned enterprises been excluded from its coverage,” he said.
Part of wider fiscal reforms
Dr Forson said extending the commitment authorisation framework to include SOEs is one element of wider public financial management reforms aimed at restoring fiscal discipline and improving the sustainability of Ghana’s debt.
He explained that these reforms are intended to prevent a repeat of the build-up of hidden or off-balance-sheet obligations that have added significantly to the country’s debt stock over the last decade.
According to the minister, ensuring that SOEs cannot commit to spending beyond their approved budgets is central to efforts to protect the public purse, reduce the risk of future bailouts and create space for investment in roads, bridges, hospitals and other critical infrastructure.
He maintained that bringing SOEs under the same spending controls as central government was essential if Ghana is to avoid a recurrence of the debt dynamics that have constrained public investment and contributed to the current debt overhang.
