The government is considering inviting private sector participation or outright sale of state entities which have proven to be inefficient, Vice President Alhaji Dr Mahamudu Bawumia has announced.
He, however, noted that government was also initiating strategic steps to fix challenges including legacy debts, low working capital and weak corporate governance structures which have crippled enterprises that have potential for growth.
Speaking in Accra yesterday during the performance contract signing ceremony of some state entities, he explained that government pursued the passage of the State Interest and Governance Accountability Bill into Law, Act 990 to comprehensively address challenges facing the entities.
Organised by the State Interest and Governance Authority (SIGA), the event saw chief executives officers or managing directors or chairpersons of boards of 80 state entities including New Times Corporation (NTC), publishers of Ghanaian Times and The Spectator, Securities and Exchange Commission (SEC), Ghana Cocoa Board, Ghana National Petroleum Corporation (GNPC) and GIHOC Distilleries Company Limited sign performance contracts for 2020.
Other state enterprises which participated in the ceremony included Ghana Ports and Harbours Authority, State Housing Company Limited, Ghana Airports Company Limited, Ghana Post Company Limited, Ghana Water Company Limited, Forestry Commission, Ghana AIDS Commission, Gaming Commission, National Vocational Training Institute, among others.
To revamp ailing state entities, he said SIGA has been mandated to design and implement comprehensive policies and guidelines that would assist state entities to become high performers, analyse extensively the root causes of underperformance of some of these entities, examine best international practices and benchmark performance against their peers and help upgrade policies and legal framework governing the entities.
He said government’s focus on improving the operational capacity of enterprises was in line with the Ghana Beyond Aid agenda which seeks investments for economic transformation.
“The Ghana Beyond Aid agenda should focus our values, mindset and attitudinal changes that condition the environment for pursuing development, rather than on the projects that Government is to implement. This has successfully been done in other countries and we can also do it. Some have done it conditioned by war or social upheaval,” Dr Bawumia added.
He said SIGA has been directed to invoke the necessary articles in the law to deal with state entities which were found during the 2020 performance contract negotiations to have engaged in some fiscal indiscipline to ensure that all entities run efficiently to be able to positively contribute to the nation’s transformation agenda.
To deal with governance conflicts between some boards and CEOs, in some enterprises, he said SIGA has been directed to develop a Code of Corporate Governance for Boards that would spell out the basic principles and standard governance protocols to be observed by Board Members.
Dr Bawumia called on Boards and Management of state entities to focus on their core businesses and avoid undertaking projects without conducting sensitivity analysis to determine commercial viability of the projects.
Director General of SIGA, Stephen Asamoah Boateng said, the Authority would build data on all Specified Entities and would carry out vigorous monitoring of every entity that was signing the Contract.
Under the SIGA law, he said non-compliance of performance contracts would results in 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.
He reiterated the commitment of SIGA to provide unlimited support to businesses on the path of becoming a global giant to propel Ghana’s development.
To enhance cooperation between the entities, Mr Boateng noted that entities have been asked to develop frameworks including an Inter-Trading Charter amongst the entities, a Code of Relationship with various Ministries and Regulatory Authorities, mechanism for conflict resolution, among others.
BY CLAUDE NYARKO ADAMS