The core mandate of State Enterprises Commission which is the oversight role of good corporate governance practices to ensure viability and profitability of State-Owned Enterprises was once again, given a real meaning at an impressive ceremony at the Labadi Beach Hotel on Tuesday, 10th April 17, 2018. The event which was well-attended by forty Chief Executive Officers, Board Chairmen and their respective Sector Minsters.
The event which was under the auspices of the Minister of Finance and ably facilitated by the State Enterprises Commission, was a platform for these forty SOEs to append signatures to Performance Contracts by which their activities and corporate plans are monitored by the State Enterprises Commission. Prior to this event, SEC undertook a rigorous Contract Negotiations with these SOEs and other Subvented Agencies, to assist them streamline their activities.
In his welcome address, the Executive Chairman of State Enterprises Commission, Hon Stephen Asamoah-Boateng took the opportunity to “congratulate all SOEs for successfully going through the negotiations”. He particularly mentioned subvented Agencies as the “Sunyani Technical University, Driver and Vehicle Licensing Authority, Environmental Protection Agency and National Accreditation Board for their bold step to be part of the process”.
The performance contracting system which has been the main instrument of evaluating the SOEs is currently being revamped to make it more responsive to the contemporary ICT age. In this regard, the Executive Chairman opined that “the commission is in the process of reviewing and modifying it to make it more responsive to suit current technological needs, both GoG wholly owned SOEs and JVCs. The Commission is also exploring opportunities within our legal framework and working with all stakeholders to design an appropriate mechanism of ensuring GoG’s interests in the mining companies is enhanced to appropriately benefit our people”.
Expatiating further on mechanisms being put in-place to ensure efficient and timely “monitoring and evaluation”, Hon Asamoah-Boateng said “the proposal for a unified, centralized and digitized Framework for the effective, real time monitoring of operations has been set out in the contracts”. “I am pleased to say plans are being prepared in getting this implemented and the Commission will be consulting with you on the details, and also increase physical monitoring visits to enhance SEC’s appreciation of operations of SOEs and improve on monitoring and evaluation reporting”.
This mechanism to ensure real-time reporting, monitoring and evaluation is going to be actualized by “working within our mandate, instituting a bi-annual reporting on 31st July and 31st January of each year to let the Ghanaian public know and appreciate each SOE’s performance and contribution to the economy” Hon Asamoah-Boateng revealed.
Initiatives as the Chamber of CEOs OF SOEs and Stimulus Package which are to foster close collaborations by way of knowledge-sharing and inter-trading activities amongst SOEs and ensure liquidity of struggling SOEs, respectively, were highlighted.
Going into the future, the oversight role played by the Commission is going to change coming into being of the Single Entity. This new entity will be established by law as a body corporate with two main objectives:
(i) To receive, acquire, manage and hold the State’s interest in shares in SOEs and JVCs; and
(ii) To ensure the pursuit of good corporate governance practices by SOEs and JVCs, as well as the introduction of effective structures that promote the growth of key sectors such as infrastructure, industry, commerce and agriculture.
On his part, the Minister of Finance who was represented Professor Gyan-Baffour said the ministry “is currently taking steps to streamline how government exercises its oversight and management of State-owned Enterprises and Joint Venture Companies to ensure that interactions with State Enterprises are better coordinated and transparent”. The minister further stated that “all oversight functions currently performed by the ministry of Finance and other government institutions would be delegated to a Single Entity”.
To consolidate financial and governance oversight of SOE sector, the minister revealed that “the ministry has institutionalized the annual Governance Forum which in 2017, brought together over 300 participants including the Board and Management of SOEs and other relevant stakeholder”.
‘Apart from addressing the challenges of debt accumulation, Government has started the implementation of a credit Risk Assessment Framework [CRAF] in line with the provisions of the Public Financial Management [PMF] Act.
This framework helps to determine the ability of SOEs to repay their debt obligations”, the Minister stated.
The keynote address by the President of the Republic, His Excellency Nana Addo Dankwa Akufo-Addo, which was delivered on his behalf by the Senior Minister Mr. Yaw Osafo-Marfo, was focused on building the “most business-friendly economy that would create jobs and prosperity for all our citizens”.
There was emphasis on the fact that “the role of SOEs in achieving this is pivotal because SOEs hold approximately 50% of the nation’s total assets as well as controlling-influence on the other half, including the activities of the private sector”.
These SOEs, over the years, have been bedeviled with numerous challenges and the President took the opportunity to ensure the managers of these entities of that fact that “the government has not lost sight of some of the operational challenges such as legacy debts, low working capital, weak corporate governance structures, multiplicity of stakeholders’ policy directives with sometimes overlapping and conflicting objectives”.
By surmounting the hurdle of legacy debt accumulation, the President said it was imperative to “keep track of performance-related indicators for real time reporting, which is a pillar of Government’s strategy duly enshrines in the Public Financial Management [PMF] Act, 2016 (Act 921). “Government has also begun the implementation of Credit Risk Assessment Framework [CRAF] to assist in determining the ability of SOEs to repay their debt obligations”.
To make meaning of these financial interventions and requirements for reporting, my Government intend to “establish a single entity by the end of the year, which would absorb all the functions currently exercised by the Ministry of Finance, State Enterprises Commission and other government institutions, as far as SOEs are concerned”. The President hinted that “this Single Entity would be equipped with the requisite powers and capacity to coordinate the implementation of individual Corporate Governance Action Plans for SOEs”.
The French Ambassador Mr. Francois Pujolas, whose country has offered great deal of assistance to the process of getting on board some subvented Agencies in this Performance Contract Signing Process, also graced the occasion.
Justice Abeeku Newton-Offei
Head of writers’ Bureau
Office of the President