Bawumia has charged heads of State-Owned Enterprises (SOEs) to ensure, among others, the commercial viability of their entities, as well as deploy world-standard corporate land governance systems to remain competitive.

The Vice-President intimated that a worrying phenomenon where most State-Owned Enterprises continue to make huge losses in areas where the private sector has shown resilience makes it increasingly difficult to justify the participation of government in certain sectors of the economy. 

He noted that given that most SOEs were initially created to fill gaps in the economy at a time when there are no private sector players with sufficient leverage to pursue such investments, it is less sensible for government to keep its interest in SOEs in sectors with strong private participation and which continue to make such losses.

18 SOEs incur GH¢791m net losses in 2016
“A recent report by the Ministry of Finance covering 18 SOEs indicates that they made a net loss of GH¢791 million, in addition to having received loans and financial support totalling more than GH¢13 million. This is no longer sustainable and it is your responsibility to come to the table, in the course of this forum, with solutions to it”, he said to buttress his point. 

The Vice-President made these comments at a State-Owned Enterprises Policy and Governance Forum jointly hosted by the State Enterprises Commission and Ministry of Finance in Accra yesterday.

He observed that a major weakness of SOEs is its corporate governance structures.

“In addition to having leadership sufficiently invested with the requisite expertise, agile enough to keep up with, and get the best deals out of partnerships with the private sector, there is an urgent need to harmonise the way in which government manages these entities”, he added.

He noted that, currently, multiple institutions, including the Ministry of Finance, the State Enterprises Commission (SEC) and sector ministries perform various oversight functions in the SOE sector. 

This fragmentation in the government’s ownership structure, coupled with the absence of a clearly defined ownership framework, he said, has limited government’s ability to effectively oversee SOEs. 

These notwithstanding, he noted, that SOEs have been, and continue to be, at the heart of the production and delivery of major public infrastructure and services: from electric power, through drinking water to petroleum products.

“Central to making Ghana the most business-friendly economy in Africa is a private sector working hand-in-hand with an efficiently run, capable public sector enterprises.

“As the quasi-commercial arm of the state, the role of SOEs in helping achieve the objective of job-creating Public-Private Partnerships (PPPs) is pivotal as they extend to all critical sectors of the economy, including energy & power, petroleum, trade, agriculture, manufacturing, housing, railways and aviation.”

He, therefore, charged the forum to come up with proposals to government on how SOEs can play an effective role as a major part of the country’s economic transformation strategy going forward.

“It is in our interest that they do well so they can contribute positively to our efforts.”

Credit: The Finder 

(By Daniel NONOR)