President directs SOEs to submit accounts
President Nana Addo Dankwa Akufo-Addo has directed all board chairpersons, entities and management teams of specified entities to fully comply with the requirement for the submission of audited accounts and financial statements to the State Interests and Governance Authority (SIGA).
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These financial statements, the President indicated, were subject to the preparation of the State Ownership Reports (SORs) and that board chairpersons of all specified entities in Cabinet’s approved lists of entities were expected to submit their audited accounts and their financial statements to SIGA by May 15, 2024.
As a follow-up to the directive, President Akufo-Addo urged the Director-General of SIGA, John Boadu, to furnish him with the list of all specified entities that have not complied with the directive by May 31, 2024, stressing that “we should not tolerate these delays any further.”
Delays
The President, therefore, implored specified entities yet to align themselves with the oversight mechanisms established by SIGA to heed this call with the terms of governance framework.
He observed that preparation and publication of SORs had always suffered delays due to a litany of constraints, key among them being the non-compliance by public entities to the submission of financial statements.
President Akufo-Addo, who was speaking at the annual policy and governance forum of the SIGA in Accra yesterday, said the Public Financial Management Act, 2016 (PFMA Act 921) mandated the submission of audited financial statements of specified entities by the end of April each year.
Good corporate governance
President Akufo-Addo said it was imperative that “we uphold collectively the principles of good corporate governance which leads to accountability and transparency to safeguard the interest of the state in the running of public enterprises.”
The 2023 SOR, he said, was the first to be published under the Public Financial Management for service delivery programme and is expected to be completed and published on or before August 31, this year.
“The 2020 SOR was published in March 2022. The 2021 SOR was published in January 2024, this year. The 2022 SOR is now at the final stages of completion,” he added, and said failure to achieve the target would affect adversely the terms of the financing arrangements of the country with the World Bank.
Forum
The forum was held with support from the Ministry of Finance and the Public Services Commission and witnessed the launch of two policy documents, namely the Code of Corporate Governance for Specified Entities and Public Service Organisations, and the State Ownership Policy.
The policies clearly define government institutions in relation to their ownership portfolio and provide the guiding principles and framework underpinning the management and governance of state interests in specified entities.
It was on the theme: “Maximising benefits from state ownership and interests through effective corporate governance.” President Akufo-Addo, who launched the two documents, said Ghana had in recent years made significant strides in strengthening corporate governance frameworks across various sectors.
“My government has implemented reforms aimed at enhancing transparency, streamlining operations and mitigating risks within SOEs. The President pointed out that good corporate governance was fundamental to the development of a thriving private sector-driven economy, particularly in the management of public enterprises.
“It demands that the boards and the management of the SOEs operate with the highest standards of professionalism, guided by ethical principles and a commitment to excellence.
“This is not merely a regulatory requirement but also a fundamental prerequisite for the sustainable development of the nation,” he said, adding that by maximising the state ownership through sound governance practices, the state could unlock the full potential of its resources to promote inclusive growth and create a better future for all Ghanaians.”
Goal
While reminding them of the goal he set for the public enterprises sector for it to contribute 30 per cent of the Gross Domestic Product (GDP) of the country, President Akufo-Addo said: “I am pleased to report that I see considerable strides towards this target.”
He mentioned, for example, that the latest report from the Controller and Accountant-General’s Department (CAGD) indicated that the number of specified entities included in the national accounts had increased from 19 in 2020 to 62 in 2022.
That, he explained, was because companies now prepared accounts to report on their financial and operating performance. “It is heartwarming to observe that by 2021, specified entities had significantly increased their total revenue to GH¢121.8 billion, compared to about GH¢34.8 billion in 2016”.
“By 2021, the number of specified entities that had prepared accounts stood at 147, up from the 18 recorded in 2016,” President Akufo-Addo stated. Also, he said entities signing performance contracts with SIGA rose from six in 2016 to 73 in 2023.
That, the President said, underscored how transparent and accountable government had been so far as government and the management of our public enterprises were concerned.
He, however, described the feat as impressive but indicated that there was still a long way to go.
President Akufo-Addo mentioned the Bulk Oil Storage and Transportation (BOST) Ltd and the Volta River Authority (VRA) as exemplary, saying the TDC Development Company Limited and Ghana Reinsurance held special significance for him due to their steadfast commitments to paying dividends consistently to the government.
Productivity
The Director-General of the SIGA, John Boadu, said the contribution of State Owned Enterprises (SOEs) to GDP increased from GH¢10 billion in 2020 to GH¢58.27 billion in 2022.
Their total assets in the National Account, he said, also rose from GH¢51.8 billion to GH¢419.2 billion in the same period, with the 2023 figure estimated to be much bigger than what was recorded in 2022.
Mr Boadu said the measurement was made possible when the SIGA, together with the CAGD, worked collectively to increase the number of Specified Entities – the companies and profit-making enterprises in which the government owns either wholly or in part – captured in the Consolidated National Accounts of Ghana from 19 entities in 2020 to 62 in 2022.
The Minister of Public Enterprises, Joseph Cudjoe, for his part, said: “We are very close to achieving effective management of public enterprises.”
That, he said, was because, “we have so far achieved a very high level of transparency and accountability through audited financial and corporative performance reporting of public enterprises.”