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Ghana’s Minister of Finance, Dr. Cassiel Ato Forson, has announced that state-owned enterprises (SOEs) will now operate under the government’s commitment authorisation regime, a fiscal control measure aimed at strengthening financial discipline and preventing the accumulation of debts that ultimately become public liabilities.
The announcement was made during the presentation of the 2026 Mid-Year Budget Review to Parliament on July 23, 2026, as part of a broader package of public financial management reforms designed to improve fiscal sustainability and curb excessive borrowing.
Reform Targets Growing Public Debt
According to the Finance Minister, the inclusion of SOEs in the commitment authorisation framework marks the first time these entities will be subject to the same expenditure controls that apply to other public institutions.
Under the new arrangement, state-owned enterprises will be required to obtain spending approvals within approved financial limits, preventing them from committing resources beyond their available budgets.
“For the first time, state-owned enterprises are now bound by the commitment authorisation regime, restraining them from spending beyond their means,” Dr. Forson told lawmakers.
SOE Liabilities Have Increased Public Debt
The minister noted that the financial obligations accumulated by state-owned enterprises have significantly contributed to Ghana’s rising public debt over the past decade.
According to him, liabilities incurred by SOEs have added the equivalent of about 3 per cent of Ghana’s Gross Domestic Product (GDP) to the country’s public debt annually over the last ten years.
He explained that many state-owned enterprises failed to meet their contractual obligations, forcing the government to assume responsibility for those liabilities.
“Over the last 10 years, liabilities of state-owned enterprises have added the equivalent of about 3 per cent of GDP to Ghana’s public debt every year because many of these entities failed to honour their contractual obligations, compelling government to settle those debts,” he said.
Resources Diverted from Infrastructure Development
Dr. Forson stated that the growing debt burden has diverted public resources away from critical development priorities.
According to him, funds that could have been invested in infrastructure such as roads, hospitals and other essential public services have instead been used to service debts accumulated by state-owned enterprises.
“This is part of the reason why Ghana’s debt grew unsustainably without the corresponding investment in critical infrastructure,” he noted.
Fiscal Discipline to Cover Entire Public Sector
The Finance Minister stressed that efforts to improve fiscal discipline across ministries, departments and other public institutions would have limited impact if state-owned enterprises remained outside the government’s expenditure control framework.
He argued that strengthening oversight of SOEs is essential to achieving sustainable public financial management.
“What is the point of ensuring that ministries and other public institutions live within their means if state-owned enterprises continue to accumulate liabilities that taxpayers eventually have to pay?” he asked.
Dr. Forson further explained that Ghana’s debt challenges have been driven not only by fiscal deficits but also by the unchecked financial commitments of state-owned enterprises.
He said extending the commitment authorisation regime to SOEs is therefore a necessary step toward improving accountability, reducing fiscal risks and strengthening debt management.
Mid-Year Budget Review
The 2026 Mid-Year Budget Review, presented in line with Ghana’s public financial management framework, provides an assessment of the country’s economic performance during the first half of the year, including updates on government revenue, expenditure, debt servicing and the fiscal outlook for the remainder of 2026.
The latest reforms underscore the government’s commitment to strengthening fiscal governance, improving public sector accountability and ensuring that state-owned enterprises operate on a more sustainable financial footing while reducing future pressure on public finances.
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