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Mr Stephen Asamoah-Boateng - CEO of SOE
Mr Stephen Asamoah-Boateng - CEO of SOE

Government asked to release SOEs to private sector

A Former Managing Director of Unilever Ghana, Mr Ishmael Yamson, has called for the release of nonperforming StateOwned Enterprises (SOEs) to private sector players to effectively run profitably and pay the needed taxes to the state.

“It does not make sense to see these SOEs only accumulate debt when there is a sector that can run them effectively and make money for the state through the payment of taxes,” he stated.
Mr Yamson, who is also the nonexecutive Board Chairman of Standard Chartered Bank, Ghana, made the call at a forum on the theme: “Ghana’s economy; moving from stabilisation to growth.”
It was organised by the American Chamber of Commerce (AMCHAM) Ghana, in collaboration with the Ghana Association of Restructuring & Insolvency Advisors (GARIA), in Accra at the weekend.
According to him, it was not prudent for the government to keep financing SOEs that were not making any returns, and asked for a strong political will to reverse the trend in the interest of the country.
He cited the case of the Electricity Company of Ghana (ECG) where the workers were resisting attempts to have it privatised although the company was financially draining the state.
He said there were many other SOEs like that and noted that until that situation was reversed and the private sector made to take charge, more debts would be accumulated.
 
Economic growth

In the area of economic growth, Mr Yamson wondered why the country should be celebrating high growth projection when that growth would not come from the real sectors of the economy. The government, according to the 2018 budget statement, intends to grow the economy by 6.8 per cent this year.
This represents a 0.5 per cent increase, compared to 2017 which was pegged at 6.3 per cent. The overall Gross Domestic Product (GDP) growth rate of 6.8 per cent is expected, with non-oil GDP growth rate of 5.4 per cent. But impressive as it may look, Mr Yamson said:
“The growth that has been projected is going to come from oil and gas and not from agriculture, manufacturing and the areas that create avenues for job.”

Negotiating with multinationals
Mr Yamson expressed concern about how multinationals were accused and seen as companies that only came in to milk the economy at the expense of the country.
“When they come, it is our people who sit with them to negotiate the deals and, therefore, when something goes amiss, we need to hold those Ghanaians who lead the negotiations and not the multinationals because they are not a charity organisation; they are in to make profit but can’t act until they have an agreement,” he stated.
He noted that Ghanaian companies had the wherewithal to become multinationals if they were made to take over SOEs that were sinking.
“MTN has become a typical multinational from Africa. Dangote is in 15 African countries and growing his footprints,” he said and noted: “This is a success story that should give us all hope because it is possible.”

Private sector/growth
On the role of the private sector in economic growth, Mr Yamson wondered why governments had not been able to clearly define a clear path on which the private sector could grow. According to him, the broad policies were not enticing and well-defined to enable the private sector to take advantage of.
“All we hear is the government saying that we have created the enabling environment; but as to what that enabling environment is, we don’t know because it is not well-defined,” he noted.
“Capital sits with the private sector and not within the government, hence the need for directions that will enable the private sector to play its role to create jobs and pay more taxes to accelerate the national development agenda,” he added.
Mr Felix Addo, formerly of Price Waterhouse Coopers (PwC), an international accounting and audit firm, who was the moderator of the forum, asked the government to release funds for the development of the agric cultural sector.
He said if that sector had the capacity to absorb a larger number of the unemployed youth in the country, “the government must do all it takes to ensure that the necessary support is provided to the sector”.

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