Mr Ken Ofori-Atta, the Minister of Finance on Wednesday said government had adopted and initiated the implementation of an Action Plan to improve governance of the State-Owned Enterprise sector and enhance corporate governance practices.
The Action Plan seeks to improve the legal and regulatory framework, strengthen government’s ownership role, professionalising the boards of SOEs and enhancing transparency, accountability and disclosure.
Mr Ofori-Atta was speaking at the opening of the 2018 SOE Policy and Governance Forum in Accra on the theme: “Promoting Good Corporate Governance in the SOE sector through Accountability, Transparency and Integrity.”
The forum, which is an annual event, commenced in 2017 and brings together key stakeholders in the SOEs sector for assessment in how well or otherwise the sector had performed in the past year and to discuss opportunities and challenges that affect performance.
Mr Ofori-Atta said the significance of SOEs to the country’s economic growth could not be underrated because effectively managed, efficiently performing and well-governed SOEs acted as an extension of the capacity of the state.
He said: “Many of our SOEs generate relatively low or negative revenues in spite of huge capital injections into their operations,” adding that, the Government sees opportunity to address some of the inefficiencies leveraging the principles of good corporate governance in SOEs and other public sector institutions.
Mr Henry Kerali, the World Bank Country Director for Ghana, said the proposed policy should define State-Owned Enterprise (SOE) objective, including the separation of commercial and non-commercial policy objectives, financing of the costs directly from the budget in a timely and transparent manner.
He said to enhance transparency and disclosure of financial and operational results at the SOE level, there was the need to adopt international financial reporting standards, accounting and auditing requirements to bring more accountability comparable to global institutions.
“The annual reports of SOEs should be published in their entirety on company and government websites, along with a consolidated report for SOE sector as a whole,” he added.
He called on Government to establish a well-defined State Ownership Policy to fill the regulatory gaps, provide a sound foundation for good corporate governance and make the broad policy directions of the state clear.
He said there was the need to institute turn-around strategies for individual SOEs, with the aim of stabilising the finances of the SOEs and eliminating any arrears between SOEs and Government, adding that, “This policy is critical for financial stability of the sector and government”.
Mr Yaw Osafo-Maafo, the Senior Minister, commenting on the 2017 Annual State-Ownership Report, said there was a highly unsatisfactory compliance of SOEs to the Public Financial Management Act.
He urged the Chief Executive Officers and Managers of the SOEs to amend their ways and comply with the law that established them.
He said in 2017, 14 out of the 86 entities in which government maintains equity, paid dividends and that, majority of the 14 entities were Joint Venture Companies, with only 3 of them being SOEs.