The Director-General of the State Interest and Governance Authority (SIGA), John Boadu, has recently addressed the issue of State Owned Enterprises (SOEs) in Ghana that incur losses, explaining that not all SOEs are run as businesses.
Some are primarily focused on providing essential services to the citizens of Ghana.
Mr Boadu emphasized that SIGA’s role is to ensure these entities adhere to regulations, meet their targets, and consider the social context in which they operate.
“As we speak, it’s 175 (companies). That’s the number of enterprises we have. Let me give you the details of the breakdown. SOEs were 53, JVCs (Joint Venture Companies) were 47, and other specified entities were 75.”
“Even with the 175 that we’ve had, if you check those that have signed performance contracts, you realise that there’s much improvement, but we need to do a lot more. One thing you must notice is that most of these organisations are not necessarily set up to make profit. Some of them are for the provision of social good for the citizens of this country,” Mr Boadu said.
To enhance transparency and accountability, SIGA is working to ensure that all SOEs participate in the State Ownership Report (SOR) initiative. This initiative requires SOEs to provide detailed financial assessments, highlighting achievements, challenges, and areas for improvement.
John Boadu highlighted that a significant challenge in improving certain State Owned Enterprises (SOEs) is the shift in their original objectives and market conditions.
Despite this challenge, SIGA has successfully transformed some of these institutions into more business-oriented entities.
“Let’s take VRA for instance. They are into helping in the distribution of electricity. They will be into transport, real estate, provision of health, provision of education and all that. It was good at that time, because at that time, we had then established with people’s resources from the places that they give it out for free. So, that service is there, and all those services add to the losses they are making.”
“So now what they’ve been able to do is that, they’ve started hiving off some of these important institutions and running them as business. So for instance, if you go to VRA now, their hospitals run as a business, although there’s a social component part of it, to reduce their losses.”
Mr Boadu also cited the Ghana Consolidated Diamond Company as an example, noting that the institution has extensive unused land and operates a hospital that provides free healthcare services to residents of Akwatia.
But “now it’s [The hospital] just running on its own as a business entity and not making losses anymore. They have a school that they are running now as a business entity and they are doing so well. We have empowered them to, so we have a new status and board specifically for them, for them to run as an entity,” Mr Boadu added.
The Director-General of SIGA believes that these institutions, among others, have significant profit potential for the country. Consequently, SIGA is working diligently to ensure they are managed effectively.