Ten state owned enterprises (SOEs) have been prepared and ready for listing on the Ghana Stock Exchange (GSE).
The 10 SOEs were identified by the GSE, together with the State Interest and Governance Authority (SIGA) and the Public Enterprises Ministry after a market readiness assessment was done.
This was disclosed by the Managing Director of GSE, Abena Amoah, at the just ended SIGA annual stakeholder meeting held in Kwahu Abetifi in the Eastern region.
She, however, did not mention the SOEs identified for listing.
Despite controlling about half of the country’s assets, SOEs in Ghana have largely been a drain on the country’s resources rather than being a tool for economic development.
The 175 SOEs, contribute just five per cent to the country’s gross domestic product (GDP).
The underperformance of these SOEs have largely been due to mismanagement, which has led to some legacy debts which in turn has made it difficult for them to raise additional capital to expand their businesses.
At the moment, most of these SOEs have made appeals to the government through the Ministry of Finance to assist them to recapitalise their businesses.
Contributing to a panel discussion, Abena Amoah said the stock market presented the best opportunity to raise additional capital for these SOEs.
“The stock exchange presents an opportunity to strengthen and grow SOEs. GCB Bank, Goil, SIC, among others are some of our success stories on how the stock market can help develop SOEs.
She said the President could, therefore, sign off the 10 identified SOEs to enable them list on the market.
“At the stock exchange, we focus on accountability and transparency and these are very important to build sustainable businesses.
“Aside giving you capital, being on the market also ensures that you are able to manage your capital and be a long term global player,” she stated.
There is money in Ghana
Ms Abena Amoah pointed out that there was enough money in the country which could be assessed by these SOEs through the local capital market.
“Government has been able to borrow a GH¢130 billion that it seeks to restructure now. Our private pensions industry has about GH¢40 billion under management. SSNIT has over GH¢12 billion under management.
“There is money in Ghana and the lesson is that international capital markets are closed to us but domestic capital markets can be built to raise the money we need to develop our country,” she stated.
She said companies listed on the Ghana bourse have collectively raised over GH¢20 billion on the stock market; GH¢12 billion from the Ghana Fixed Income Market and GH¢8 billion from the main equities market.
“We need SOEs like Ghana Re, Ghana Gas and the stronger ones to list on the market. What makes capital markets grow is when you bring your best, because the investors need a strong success story.
“We are willing and able to work with the rest progressively. When they have a massive capital plan that has a good balance, we will migrate them onto the market,” she noted.
Let’s be cautious
In an interview with Graphic Business, the Director General of SIGA, Mr Edward Boateng, said the country must be cautious in the listing of some of its SOEs.
He said the country must be careful not to list some of its strategic assets whereby they may fall into foreign hands.
It’s not just Ghanaians who invest on the capital market, with funds coming in from Abu Dhabi, Toronto, and all over the world.
On the equities market, 60 per cent of trades are by foreign investors.
Mr Boateng said the country must, therefore, ensure that there is local capacity such that when some of these strategic SOEs are listed, the local entrepreneurs and local institutions could take them up.
“So, we are looking at all those options but definitely some of these SOEs are going to be listed on the stock exchange or in some cases privatised or divested off government hands so that government can focus on its core mandate,” he stated.