Welcome address by Executive Chairman of State Enterprises Commission at the launch of 2017 Annual Report of State Ownership of SOEs

The State Enterprises Commission (SEC) was established to promote within the framework of government policy, the efficient and profitable operation of Statutory Corporations. In recent years, the impact of SEC in the discharge of its mandate over the SOEs has not been felt leading to diminishing importance over the years. Some of the SOEs did not find it useful to sign any performance agreement with government. This situation is now changing drastically. In 2018, thirty-five (35) SOEs and five (5) subvented agencies did sign with government as against twenty-five (25) SOEs and five (5) subvented agencies signing in 2015. My role as the Executive Chairman is to serve the SOEs and be the conduit to impart and share knowledge amongst us. I have also indicated my readiness of being more sensitive to the challenges of the SOEs and remedying them with speed and facilitating their smooth operations. I believe the year 2017 has seen some positive achievements in this regard.

The Commission is in the process of reviewing and modifying the Performance Contracting system to make it more responsive to suit current technological needs for both SOEs and JVCs. We are also exploring opportunities within our legal framework and working with all stakeholders to design an appropriate mechanism of ensuring Government’s interest in the mining companies is enhanced to appropriately benefit our people. Again, the proposal for a unified, centralized and digitized Performance Monitoring and Evaluation Framework for the effective, real time monitoring of SOE operations as has been set out in the contracts will be pursued. We shall also increase our physical monitoring visits to enhance our appreciation of the SOEs’ operations and improve on our monitoring and evaluation reporting. Working within our mandate, the Commission will be 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.

One of the critical ingredients in the management of an organization is good corporate governance. A 2016 World Bank report on the SOE sector indicates how non-observance of the ethos and practices of good corporate governance adversely impact on the efficient performance of the sector. As an important first step in dealing with this challenge, the Commission organized corporate governance training for twenty-three (23) boards and management of SOEs in efforts to deepen and sharpen their skills on corporate governance, enhance effective accountability and transparency, which is expected to lead to prudent management of the SOEs. More of such important capacity building can be expected going forward. My humble appeal is for all of us to work as team players towards the success of the government’s agenda in the sector.

For some time now, the Commission has been working with the Chief Executive Officers (CEOs) of SOEs and facilitating the formation of a Chamber of CEOs of SOEs to promote inter-trading activities that will enhance growth and create more jobs; encourage each other to attain best international practices through peer review mechanism; and promote knowledge sharing so as to maximize operational and financial opportunities to challenge, assist and guide the SOEs to become top-notch companies. Some difficulties in the sector include debt overhang and liquidity challenges. The Commission has been working with the Ministry of Finance (MoF) to address these issues. Discussions have been initiated with the MoF to consider seven (7) SOEs for some stimulus package. The Commission is also seriously assisting some SOEs in retrieving their monies locked up with various state institutions, including some Ministries, Departments and Agencies (MDAs), and our efforts are yielding results. SEC is also aware of government’s efforts in resolving the legacy debt within the energy sector. Afer this exercise, the Government cannot continually be expected to provide that financial support to keep SOEs running. Therefore, the support that has been received and the ones being worked on so far is expected to significantly enhance the financial health of SOEs so that they can borrow on the strength of their financial positions.

Going into the future, the oversight role played by SEC is expected to be taken over by an Authority to be established by law. A task force has been formed by the Ministry of Finance to see to its formation. The evolving oversight Authority will be more in tune with modern management of the role of SOEs in leading Ghana’s economic growth. It would incorporate a revised and improved version of the roles of the present day SEC and the old GIHOC, with stronger governance structures. Furthermore, the composition of the board of the new Authority would be structured to put SOEs in the position to shape the sector and help insulate the organizations from undue executive interference. It can receive, acquire, manage and hold the State’s interest in shares in SOEs and JVCs; and 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.

In conclusion, the strategic importance of this sector to the economic transformation agenda of the government is in no doubt. That is why the Government intends to bring the sector to the fore of its economic growth, industrialization and job creation agenda. And has taken steps to holistically deal with structural and fiscal challenges of the SOEs.

The Government’s support and efforts alone will not bring the desired outturn unless each and every one of us in the ship paddles in the direction of the dream of the President, Nana Addo Dankwa Akufo-Addo to its successful destination.