The ability of the private sector to expand, create jobs and contribute meaningfully to economic development is largely dependent on the efficiency of State-Owned Enterprises (SOEs), Vice President Dr. Mahamudu Bawumia has said.
Speaking at the 2020 Performance Contract Signing ceremony between government and the SOEs, joint ventures, and other state-owned entities, in Accra, the Vice President said the efficient performance of state-owned agencies, particularly those that regulate and issue licenses and permits to the private sector, allows private businesses to operate efficiently and in the most favourable way.
“The success of the private sector, in many respects, is anchored on the efficient performance of SOEs.”
He added that government’s goal is to put SOEs on a sustainable path to commercial and financial viability so as to enhance their efficiency; further charging management and boards of various SOEs to take strategic steps to address their challenges so as to restore confidence and financial health of their institutions.
“Your challenge is to restore your institution’s financial health, not worsen it. We have noted with gratitude, the sacrifices and good work some of you are doing. We have also noted, however, during the 2020 financial performance negotiations, some fiscal indiscipline of some entities.
You are dealing with legacy debts, low working capital and weak corporate governance structures, to mention a few. We are very mindful of this and government is committed to taking the strategic steps to fix these challenges and restore confidence in our state entities,” Dr. Bawumia said.
To ensure the optimal performance of the SOEs, the Vice President revealed that the government through the State Interest and Governance Authority (SIGA), the agency that oversees SOEs, joint ventures and other agencies are taking strategic steps to address issues such as weak performance, lack of transparency and accountability and weak governance.
One of the steps is government’s plans to carry out periodical performance assessment of SOEs, while the continuous existence of boards and CEOs will now be based on the performance of their institutions.
Signing of Performance Contracts
The ceremony, themed: “Transforming state entities to contribute significantly towards Ghana Beyond Aid”, brought together ministers of state, board members and CEOs of State-owned agencies and joint ventures, as well as Diplomatic Corps and development partners.
The state agencies were drawn from varied sectors of the economy, such as agriculture, health, labour relations, energy, among others.
Others were joint venture companies in which the state holds an interest and regulatory agencies.
The Director General of SIGA, Stephen Asamoah Boateng, advised the institutions to adopt good management strategies so as transform their operations and to operate within the remits of the State Interest and Governance Act, 2019 (990).
“We have departed from the SEC era where non-compliance did not mean anything. This time, there are heavy penalties ranging from refusal to grant bonuses, financial charges, through to recommendation to appointing authority to remove management and board of directors and, prosecution leading to court fines and jail terms.”
Let us use legitimate means with the power of the state to create genuine and serious Ghanaian millionaire businessmen and women in our time,” Mr. Boateng said.