Reports from the Finance Ministry have revealed that state-owned enterprises (SOEs) reported a ¢5.3-billion loss in their operations in the 2020 fiscal year.
It further emerged that some SOEs had been reluctant to submit annual accounts since 2017, a development which means that the loss position of SOEs could be worse.
To fix the poor state of some of the entities, the Finance Ministry has warned that it will no longer support request for assistance by SOEs that fail to meet the reporting requirements specified in the Public Financial Act.
Speaking at a forum in Accra a couple of months ago, a Deputy Finance Minister, Dr John Kumah, said SOEs consistently posted aggregate net losses from 2015 of ¢2.1 billion to the latest figure in 2020, ¢5.3 billion, in the Draft 2020 SOE Report.
The state of some SOEs in the country has, in recent times, become a matter of concern to policy analysts, who have described the development not only as unfortunate but also unacceptable.
Particularly at a time when the public debt has risen beyond what the Bretton Woods institutions describe as sustainable levels, the last thing we should see are the incessant losses being recorded by SOEs which are capable of making profits or at least breaking even to free the public purse.
The Graphic Business is appalled by the report of losses by some SOEs and would want the government to take drastic action to stop the financial hemorrhaging.
It has become increasingly clear that some of the appointees to the boards and executive positions of these enterprises are not capable of managing them.
Since the inception of the Fourth Republic, it has become clear that whenever there is a change in government, the first thing the incoming administration considers is drive away all appointees of the previous government and fill some of those vacancies with people who are not only politically tainted but also completely lack the business and management acumen to run the enterprises they have been placed in.
Much as we do not entirely fault that move, we strongly believe that managers who had proved to be doing well; that is, making profits for the enterprises they superintend, should be made to continue, instead of bringing new people who will turn those enterprises from profit ways to become loss-making institutions.
We have reported many instances when some of these institutions had been reduced to mini party offices where political party faithful throng to conduct party business, instead of working professionally in the interest of all.
Again, there are occasions when CEOs and boards fail to work with the regular workforce and resort to party people, who are treated as consultants and paid heavily for doing absolutely nothing.
Gauging from the comments by experts, we also share in the view that there must be strict adherence to corporate governance practices, without any compromises, because it is a huge cost to the taxpayer when these institutions fail to perform to return profits.
While our democracy grows, we should be in a position to eschew the negative past and look ahead with the interest of the state at heart.
We must allow competent and well qualified people to head these institutions, while we appoint board members who are experienced and have positive track records to give SOEs the strategic direction.
An International Monetary Fund (IMF) report in recent times has shown that SOEs make a positive contribution to the revenues of states and, therefore, they should be made to operate at their optimum to make an impact.
We need to reconsider our position to divest non-performing SOEs and, instead, appoint competent CEOs and boards to man those enterprises. They should be given clear key performance indicators (KPIs), while their remuneration should be structured according to their performance over their contract duration.
The practice of CEOs of SOEs being given the laxity to operate should become a thing of the past if SOEs are to make a strong impact and return profit.