Accra, Ghana’s 2020 State Ownership Report has revealed that majority of state-owned enterprises, joint venture companies and other enterprises under the State Interests and Governance Authority (SIGA) recorded aggregate losses amounting to GHc5.
The 183 specified entities under SIGA, 50 per cent of state-owned enterprises (SOEs), 63 per cent of joint venture companies (JVCs) and 34 percent of the other state enterprises (OSEs) recorded financial losses and deficits.
Additionally, only 31 out of 51 SOEs, 22 out of 89 OSEs and 23 out of 43 JVCs had submitted their financial statements to the Minister of Finance as at the end of December 2021.
Mr Ken Ofori-Atta, the Finance Minister, said in view of the non-compliance with the Public Financial Management Act, 2016, (Act 921), the Public Financial Management Regulation and SIGA Act, 2019 (Act 990) by SOEs, JVCs and OSEs, the Ministry would, henceforth, not consider any request for government support from any entity that failed to meet the reporting requirements.
In consultation with the Minister for Public Enterprises, Mr Joseph Cudjoe, the Finance minister has directed SIGA’s Director-General, Ambassador Edward Boateng, to ensure that the appropriate sanctions and penalties were applied to the offending organisations including recommendation for the removal of the members of the governing board.
Mr Ofori-Atta said this on Friday in a speech read on his behalf at the opening of the 2022 Policy and Governance Forum of SIGA in Accra, on the theme: “Improving the Performance of Specified Entities: Leadership and Technology”.
In the short to medium term government is expected to implement a financing policy for specified entities, particularly SOEs, which anchored on three main principles.
These are: the requirement for specified entities to operate on the strength of their balance sheet, capitalisation of any specified entities to be funded only through the sale of its strategic assets not drawn from tax revenue or added to public purse, and the clear distinction of cost of SOEs and JVCs from their commercial activities and those incurred in exercising their public policy framework.
Mr Ofori-Atta, therefore, urged boards and management of state enterprises to leverage on appropriate tools of technology to improve on their management operations.
They should also adopt innovative business models to enhance productivity, commercial viability and financial sustainability.
The Minister was of the belief that effective leadership was vital for breaking the inefficient state enterprises and meeting the demands of the performance contracts signed with government.
SIGA replaced the Divestiture Implementation Committee and the State Enterprises Commission mandated to streamline the operations of SOEs, JVCs and OSEs to promote sound governance and optimal institutional performance to make them profitable.
Source: Ghana News Agency
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