Govt bails out 8 SOEs; They'll receive payroll support
The Ministry of Finance is finalising plans to provide payroll support for eight state-owned enterprises (SOEs) whose operations have been disrupted by the coronavirus disease (COVID-19) restrictions.
The Minister of Finance, Mr Ken Ofori-Atta, who disclosed this in Accra yesterday, said an assessment of the impact of the pandemic on 28 SOEs had revealed that as many as 19 of them were projected to post losses of up to GH¢1.55 billion for 2020.
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More specifically, he said, entities such as Metro Mass Transit (MMT), Intercity STC and the Driver and Vehicle Licensing Authority (DVLA) recorded revenue declines of 62, 40 and 71 per cent, respectively, between March and April this year.
Situation
“The situation has become so dire that the Ministry of Finance is currently finalising plans to provide payroll support for eight SOEs whose operations have been seriously disrupted by the restrictions imposed as a result of the pandemic,” Mr Ofori-Atta said at the opening of the State Interests and Governance Authority (SIGA) 2020 Policy and Governance Forum in Accra yesterday.
He indicated that this year’s policy and governance forum came at an important time when the COVID-19 had presented both unprecedented challenges and new opportunities which must be surmounted and leveraged to ensure the long-term commercial viability and sustainability of institutions.
“We are only beginning to understand and measure the true economic cost of the pandemic, transmitted through the lockdown of key economic zones and the deleterious effects on growth and the viability of some sectors,” he said.
According to him, there was no denying that since the pandemic reached the country’s shores, there had been disruptions to corporate and general business confidence, coupled with the associated threats to projected revenues, profitability, liquidity and corporate growth of our SOEs, joint venture companies (JVCs) and other state entities (OSEs).
Advancing
“We envisage SIGA playing a critical role in advancing our economic recovery by state entities, including public corporations and regulatory bodies,” the Finance Minister said.
He said he looked forward to working with the leadership of SIGA to reposition SOEs, JVCs and OSEs to overcome the immediate challenges posed by the pandemic and improve their contribution to Ghana’s post-COVID economic recovery effort in particular and the national development process in general.
Although he said the country did not “know the long-term implications of the COVID-19 for state institutions, “we can say definitively that when normalcy returns, state institutions would likely have learnt a few lessons. These will include how best to retain operational resilience and possibly how to design operating models fit for the new normal”.
“I believe this will encompass sustainable cost optimisation, end-to-end digitisation and the implementation of robust corporate governance procedures,” Mr Ofori-Atta said.
He expressed the belief that state institutions, when effectively managed and well-governed, would play a critical role as an extension of the capacity of the state, adding that it was his expectation that the policy forum would present an excellent platform to speak frankly about Ghana’s expectations and challenges, and by so doing learn, gain experience and reach a consensus on how to address the immediate challenges faced by its SOEs.
SIGA promotes SOEs
The Minister in charge of SIGA, Dr Kwaku Afriyie, said being able to transmit the right signals was always important, but even more so when the global economy faced headwinds as a result of the ripple effects of the COVID-19 which had crippled every facet of the economy — health, education, energy, technology and even the daily basic engagements for survival.
Indeed, he said, as a result of the prudent measures instituted by the Economic Management Team, even at the mercies of the harsh effects which the pandemic brought, “we are now facing a harmonised thrust, which is promising to enable the nation to recoup all the strides and gains it has lost”.
“Today, we are here to give a narration of our journey so far. I am enthused by the theme for this year’s policy and governance forum. It is a year on after we were given a new mandate of overseeing and administering the state’s interests in specified entities by the President, and I must say that I am, indeed, proud, not only to be part of the agenda but also as the lead facilitator for this historic change,” Dr Afriyie said.
Inception
The SIGA Minister said it was very clear that with the inception of the SIGA, mandated to promote the efficient and profitable operation of specified entities, there was now a new normal in doing business in Ghana’s state agencies.
He said SIGA had an essential role in promoting sound policies for inclusive and sustainable growth.
He said the Annual Performance Contract process had, since 2017, witnessed an upward trend, and that there were 25 specified entities which signed the 2017 contract, adding that “this increased by 40 per cent to 35 entities in 2018 and a further 34.3 per cent in 2019 to 47 specified entities”.
“SIGA has up to date carried out extensive tracking, identification and verification of assets under the divestiture programme, as prescribed by the Transitional Provisions of Act 990.
“The asset verification has so far identified and verified over 650 assets (factories, land and residential properties) nationwide under the divestiture programme.
“SIGA has secured the assets with manned security personnel. Comrades, undoubtedly, SIGA has come to stay,” Dr Afriyie said.