What is the way forward for State Owned Enterprises in Ghana now?

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Much talk have been made coming from last week on the way forward in terms of managing the State Owned Enterprises (SOEs) in the country.

A damning report on SOEs in the country has generated a heated and intellectual discussions among experts.

It is estimated that about 18 SOEs made a loss of about seven GH¢791 million last year.

Government in the 2017 budget hinted of plans to list a number of the SOEs.

The news of the losses recorded by the SOEs therefore re-affirms the government’s decision to list several of the SOEs on the Ghana Stock Market to ensure efficiency and prudence management.

Dr Bawumia at a forum in Accra, last week, said there is an increasing pressure for SOEs to justify the continued government support and investments, especially for loss-making and inefficiently run entities.

Also, the Finance Minister Ken Ofori-Atta has hinted that, soon no Chief Executive Officer of any State-owned Enterprise will earn more than the President,

He noted that, a rationalisation process will be undertaken to cut salaries and allowances of CEOs whose remuneration is above that of the President.

Addressing a policy and governance forum on governance and strategic policy for the Civil Society Organisation sector, Mr Ofori-Atta said: “We currently have a mirage of remuneration schedule that we don’t quite understand.

“I think we need to begin to rationalise it to make it clear where remuneration ends so that it does not go beyond the presidency,” he stated.

Mr Ofori-Atta said some of the CEOs of the SOEs earn more than thrice the salary of the president.

The current president, Nana Akufo-Addo’s salary is pegged at GH¢22,809 per the Professor Dora Edu-Buandoh Committee’s report which was tasked to recommend emoluments for article 71 office holders.

The Vice President also per the committee’s report is earning GH¢20,529.

But, there are a number of SOEs who earns more than these two gentlemen of the land, despite their under productivity and inefficiency.

“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,” the minister stated.

In support of the idea of government releasing control of the SOEs in the country, the founder and Chairman of the Institute of Economic Affairs (IEA), Dr. Charles Mensa says the government should consider relinquishing its control of state-owned enterprises if it wants them to be run profitably.

According to Dr. Mensa, most enterprises owned by the state are under-performing because of interference by politicians.

“They don’t make money not because they are inefficient or they don’t know what to do but because of the demands from the top…and this makes it very difficult for the company to move forward and succeed,” Dr. Mensa has said in an interview.

“Some state agencies have remained babies and infants for more than 30 years…If the government really wants these state enterprises to grow and become like private companies [then] they should let them go.

“They should let them be on their own and perform well. You don’t groom a state enterprise for 30 years,” stated the former Chief Executive of Volta Aluminium Company (VALCO).

Meanwhile, Dr. Mensa shared a different view with regards to salary cut of CEOs. He said, this may not necessarily make the organizations profitable.

According to him, some of the public organizations operate in the same space with private ones and compete with the private sector to recruit the best brains, therefore, “you have no choice but to pay competitive salaries”.

“In the government sector you may be guaranteed your job [for up to four years or more] but in the private sector your job is not guaranteed for that long,” he said.

He added: “The fact that the company is owned by the government does not mean that the particular company operates within the government sector.”

Also adding his intellectual touch, Economist Eric Osei-Assibey lauded government’s decision to list State Owned Enterprises (SOEs) on the Ghana Stock Exchange (GSE).

He believes the decision will ensure that SOE’s remain accountable to the public. “I think it is good because then you are also allowing public participation and also many of them are currently undercapitalized so you want to ensure equity financing so that Ghanaians become shareholders of these companies.

“I think that if that is done it will not only bring in the necessary financing but will also strengthen the corporate structures and the ownership structure of such corporations, so that gradually we offload government’s interest from some of these SOE’s” he added.

The move is among others expected to solve the financial challenges facing most SOEs in Ghana.

Dr. Osei-Assibey stated that listing of SOE’s will attract the needed funding for the state. “So I think it is very good suggestion that we should pursue. It will definitely bring the needed financing and also because once you are listed on the Ghana Stock Exchange, you need to put in place good governance structure, your reporting becomes much more accountable and transparent in terms of your finances”.

Source: Adnan Adams Mohammed

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