Deputy Finance Minister, John Kumah has stated that the Specified Enterprises in the country have failed to make up for the returns in government investments over the last few years.
The Member of Parliament for the Ejisu constituency posited that despite the favorable list of these enterprises in the country, there has been a significant increment of losses over the years.
During the 2022 Policy and Governance Forum dubbed “Improving the performance of Specified Entities: Leadership and Technology,” John Kumah said, “There are currently 183 Specified Entities in government books with 51 SOEs, 43 JBCs, and 89 OSCs. This is a tall list of State enterprises in which the state has interest and one would have hoped the return on government investments in them would have been a positive story. In preparing the 2020 State Ownership Report, our analysis revealed that our Specified Enterprises performance has largely trended downwards. Indeed SOEs consistently posted aggregate net losses from Ghc 2.1b in 2015 to the latest figure in 2020 at Ghc 5.3b losses. Compound annual growth of 16.2%.”
He further expressed his unhappiness with the concurrent losses and downgrade in standards of the various state entities.
“Of the 44 SOEs and 16 JBCs covered in the 2020 draft SOE report, 50% of SOEs and 63% of JBCs reported losses. Again of the 56 OSCs covered, 34% posted deficits. It is regrettable that while our Specified Enterprises Entities, especially SOEs hold significant assets, their performance and effectiveness need much to be desired,” he added.
The Deputy Finance Minister stated that only a few of the Specified Entities had presented their audited financial report to the ministry as of December 2021. With the unswerving non-compliance by these Specified Entities, he warned the government would withdraw its support and unleash sanctions on them.
“Henceforth, the Finance Ministry would not consider any request for government support from any specified entities that failed to meet the reporting requirements specified in the PFM Act, PMF regulations and SIGA etc. Secondly, in consolation with the Minister for Public Enterprises, Hon. Joseph Kudjoe, the Honorable Minister of Finance has directed the Director-General of SIGA to ensure that appropriate sanctions and penalties are applied for infractions of the PFM Act, PFM regulations, and SIGA Act including recommendations for the removing of members for the governing board.
In the short-medium term, the government also expects to implement a financing policy to specified entities particularly SOEs and OSCs which will be anchored on three main principles namely; the Requirement for specified Entities to operate on the strength of their balance sheet. Capitalization of new specified entities to be funded only through the sale of non-strategic assets and not drawn from tax revenues or added to the public debts and clear distinction of costs of SOEs and JBCs purely commercial activities from those incurred in exercising their public policy obligations, that is quasar physical activities. The latter would be fully reimbursed in the line with the duties of the State Ownership Policy subject to cabinet’s approval.”
On Friday, January 28, 2022, the State Interest and Governance Authority (SIGA) under the leadership of Ambassador Edward Boateng in collaboration with the Ministry of Finance and Ministry of Public Enterprises organized the 2022 Policy and Governance Forum. Also in attendance was the President of the Republic, Akuffo-Addo.
The forum seemed to improve the performance of Specified Entities through leadership and technology to enhance the GDP rate of Ghana.
The Director-General of SIGA, Ambassador Edward Boateng pledged to vindicate the responsibility upon his shoulders and improve the GDP of the country.
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