France and Ghana both rely on a strong public sector.
Since independence, Ghana has created national and regional champions in strategic industries. The Statutory Corporations Act, passed in November 1959 and revised in 1961 and 1964, created the legal framework for public corporations, which include State Owned Enterprises (SOEs).
This law placed the country’s major corporations under the direction of government ministers.
The State Enterprises Secretariat office was located at Flagstaff House, the seat of government, and under direct control of the president. Ghana’s SOEs continue to play an essential role by providing basic services (water, electricity, transportation, etc.), managing the nation’s national resources (gold, oil and gas, etc.) and in constructing major infrastructure. As such, they contribute significantly to national wealth, with their turnover representing 15% of GDP and offering employment to nearly 50,000 people.
As early as 1848, France chose to directly own strategic assets such as the railways. Then, after the Second World War, industries like coal, electricity, gas or even banking were taken over by the state; and again in the 1980s, as a way of supporting vital industries. In 1986, SOEs provided 25% of France’s GDP. The government of France remains a significant stakeholder in French companies within the fields of energy, transportation, industry, finance and services. Some of these companies are well-known flagship companies – like Areva, Air France, Airbus, Thales and Engie.
State-ownership is a way of protecting sovereign assets and ensuring that they serve the national interest. Public ownership of such companies can either be permanent or temporary. When SOEs become profitable, they may be totally or partially sold to private investors. Whether totally or partially state-owned, the importance of these companies to the national economy requires that they are effectively governed and that their performance is worthy of emulation. When governance of public enterprises fails, their performance is negatively impacted.
To ensure effective governance of public companies, the state as shareholder needs strong oversight institutions with expertise in both the operating sectors of the companies, and in financial and industrial strategy: that is in France ‘Agence des Participations de l’Etat’ (literally ‘agency of public equities’), and in Ghana the State Interests and Governance Authority (SIGA).
Ghana has recently initiated far-reaching reforms in the oversight and management of SOEs, Joint Venture Companies (JVCs) and Other State Entities (OSEs), collectively referred to as Specified Entities. The change management process includes the establishment of SIGA, to among other things promote the efficient and – where applicable – profitable operations of Specified Entities. By law, SIGA is the shareholder of all the State Interests in these Specified Entities.
Since Ghana and France share common views on the importance of effective governance for economic efficiency of SOEs, our two countries have decided to reinforce our partnership on these key issues. This partnership will enable us to share knowledge and experience to improve the fortunes of our SOEs. The success of this collaboration, which was launched in 2016 between the French Embassy and the State-Owned Enterprise Commission of Ghana, has led to the French Development Agency (AFD) granting £5million to provide expertise and further strengthen the operationalisation of the oversight functions of SIGA, working closely with the Ministry of Finance and Expertise France – (the French International Technical Cooperation Agency).
We are thrilled to cooperate in this area, as it is strategic for our countries to ensure sustainable growth, jobs and efficient public performance.
Stephen Asamoah Boateng is the Director General of SIGA, and Anne-Sophie Avé is Ambassador of France to Ghana