Editorial: SOEs strong revenue performance offers hope!

News filtering in that state-owned enterprises (SOEs) recorded strong revenue growth for the 2024 financial year with total earnings climbing 28.3 percent to GH¢133.68billion – up from GH¢104.19billion in 2023 – makes interesting reading, considering the dismal performance of state entities over the years.

According to the 2024 State Ownership Report, this performance was largely driven by robust expansion in the Energy sub-sector – which posted 38.98 percent growth – and Financial & Allied Services surging by 49.52 percent.

The sector also showed signs of operational recovery, with profit before interest and tax (PBIT) improving sharply to GH¢1.57billion in 2024 compared with GH¢376.93million in 2023 and a loss of GH¢9.62billion in 2022.

However, the SOE sector ended 2024 with a net loss of GH¢9.67billion – wider than the       GH¢7.14billion shortfall recorded in 2023. Excessive finance charges, totalling GH¢9.39billion, wiped out all operational gains.

Despite persistent losses from entities such as Ghana Cylinder Manufacturing Company, GNPA, Ghana Water Company Limited, Graphic Communications Group and Tema Oil Refinery, nine SOEs – including Ghana Ports and Harbours Authority (GPHA), Bui Power Authority (BPA), Ghana National Gas Company (GNGC) and BOST – maintained consistent profitability over the past five years.

On a more positive development, three SOEs – Ghana Reinsurance Company, TDC Company, and State Housing Company – paid a combined dividend of GH¢29.36million to government in 2024, representing a 78.9 percent increase from the previous year.

It is recalled that Finance Minister Dr. Cassiel Ato Forson raised an alarm over growing financial risks which threaten to cripple the economy, particularly citing the poor performance of state-owned enterprises (SOEs) and joint venture companies.

He raised this concern during the National Economic Dialogue held early in the year where he stated that many SOEs are operating at a loss and their financial difficulties pose a significant challenge to the country’s overall economic stability.

This situation, he noted, not only weakens the financial standing of these enterprises, but also poses a broader risk to the country’s economy. “Nearly all SOEs are operating at a loss, with organisations such as the ECG and ADB among those in the red,” he said.

The then finance minister time warned that the current unsustainable operations of these enterprises could lead to deeper fiscal challenges, affecting not only government revenue but also the livelihoods of citizens dependent on their services.

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