President Nana Addo Dankwa Akufo-Addo has announced plans to implement a robust regime to monitor the activities of state-owned enterprises (SOEs) to ensure transparency and effective accountability.
He further announced that the government had begun the implementation of a Credit Risk Assessment Framework (CRAF) to assist in determining the ability of SOEs to honour their debt obligations.
“State-Owned Enterprises seeking government support in the form of guarantee or on-lending facilities are evaluated through the CRAF before any request is determined. All these are to ensure that the entities will not lapse into the same debt-ridden trap in the future,” President Akufo-Addo stated.
In a speech read on his behalf by the Senior Minister, Mr Yaw Osafo-Marfo, at the signing of the 2018 performance contracts between SOEs and the government in Accra on Tuesday, the President said the government would implement a robust regime to monitor the activities of the SOEs to ensure transparency and effective accountability.
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Forty SOEs, five of them subvented organisations, signed this year’s performance agreement. They included the Graphic Communications Group Limited, the Grains and Legumes Development Board, the Ministry of Lands and Natural Resources, the Electricity Company of Ghana, the New Times Corporation, the Ghana Broadcasting Corporation, the Ghana Cylinder Manufacturing Company and the Ministry of Lands and Natural Resources.
Others were the Ghana Post Company Limited, the Ghana Water Company Limited, the Community Water and Sanitation Agency and the Ghana Highway Authority.
The theme for the event was: “Driving Excellence in State-Owned Enterprises.”
While President Akufo-Addo expressed optimism that the measures the government was implementing would improve the efficiency and strengthen the balance sheet of the SOEs, he asked the heads of the enterprises to run their institutions profitably to be able to borrow on their own balance sheet.
“Every SOE must keep an asset register that is accurate and credible so that changes in management will not have any difficulty identifying what belongs to an SOE in terms of assets,” he added.
The President indicated that there were plans to embark on sustainable and integrated infrastructural development programmes that fell within the SOE sector such as housing, water systems, aviation, ports, harbours and railways.
President Akufo-Addo explained that the infrastructural development would be undertaken through direct government investment, public private partnership (PPP) and Build, Operate and Transfer system.
He explained that the development of those strategic sectors was to create an enabling environment for the private sector and also boost the national economy.
The Executive Chairman of the State Enterprises Commission (SEC), Mr Stephen Asamoah-Boateng, said last year, 25 SOEs signed the contracts and this year’s ceremony was a significant improvement with 40 SOEs, including subvented agencies, submitting to the process.
He lauded the subvented agencies such as the Sunyani Technical University, the Driver and Vehicle Licensing Agency, the Ghana Standards Authority, the Environmental Protection Agency and National Accreditation Board for their maiden participation and for demonstrating confidence and commitment in the performance contracts system.
He urged all the other subvented agencies to emulate the example that had been set in accordance with the Subvented Agencies Act 2006, and gave an assurance that the SEC would, in collaboration with the Ministry of Finance and the sector ministries, support the proposals of some of the agencies that had shown readiness to be weaned off government subvention.
Mr Asamoah-Boateng said the commission was in the process of reviewing and modifying the performance contract system to make it more responsive and to suit current technological needs.
On stimulus package and debt management, the executive chairman stated that an agreement had been reached to consider seven SOEs for some stimulus package, adding that the details would be made available as soon as the Minister of Finance gave the final approval.
“The government recognises some of the difficulties of the SOEs sector, including debt overhang and liquidity challenges. The commission has been working with the Ministry of Finance on these matters,” Mr Asamoah-Boateng added.
The French Ambassador to Ghana, Mr Francois Pujolas, had earlier commended the government for entering into agreements with SOEs to give better accountability to the people.
Prof. George Gyan-Baffour, who represented the Minister of Finance, Mr Ken Ofori-Atta, asked the SOEs to make their key performance indicators to reflect their sectors in line with modern business practice.