The preparation and publication of the State Ownership Report was initiated in 2017 by our government as part of our strategy to reform and improve governance and financial performance of state owned enterprises (SOEs). This novel initiative was intended to shed light on the performance of SOEs and improve transparency and accountability in the SOE sector, the potential of which our State is yet to fully leverage to support the national development process.
Since its inception, the scope of the Report has been extended to cover joint venture companies (JVCs) and other state entities (OSEs). The maiden edition (FY2016), which was published in 2017, covered only eighteen (18) SOEs. The second (FY2017) and third (FY2018) editions covered forty-nine (49) and seventy-seven (77) entities respectively. This 2019 State Ownership Report covers one hundred and six (106) entities made up of forty-seven (47) SOEs, twenty-seven (27) JVCs, and thirty-two (32) OSEs. It is our avowed intent to ensure full compliance to the reporting requirements by the entities in order that the next edition (FY2020) will cover all entities on government books.
As with previous versions, the 2019 State Ownership Report provides a more in-depth analysis of the financial performance, key issues and policy measures being implemented to improve performance and governance of particularly SOEs, OSEs, and majority-owned JVCs. The findings of the Report relating to the financial performance of these entities reveal that more work needs to be done in order to attain optimal performance. It is a continuous source of worry that SOEs and JVCs are still recording losses. SOEs and JVCs reported net losses of GH¢1,375.33 million and GH¢2,341.37 million respectively in FY2019. While majority of SOEs and JVCs have consistently increased revenue, their failure to contain significantly high and ever increasing costs has largely accounted for the
losses they continue to report.
Notwithstanding the foregoing, I am pleased to acknowledge that there is improvement in terms of compliance with financial reporting requirements including the Public Financial Management Act, 2016 (Act 921), and the Companies Act (Act 992), and its effect on the quality of data used for this Report. It is notable to observe that some SOEs have progressively cleared their arrears of unaudited financial statements, with some of them going back several years.
The number of audited financial statements utilized for these annual reports have also increased from five (5) in FY2017 to forty-four (44) and sixty-five (65) in FY2018 and FY2019 respectively. While applauding these improvements, we see the prospects of potential turnaround of the sector being stymied by persistent governance and operational issues. It is against this background that the role of the State Interests and Governance Authority (SIGA) is critical. We are hopeful that the direct focus that SIGA is expected to bring to bear on the financial and governance oversight of the entities will help stem the tide of underperformance and set them on the path of sustainability, efficiency and profitability. In this regard, it is critical that findings of the review of performance contracts executed between SIGA and the entities are duly reflected in subsequent editions of this Report.
Our collective effort since 2017 have been aimed at realizing the potential of SOEs, JVCs and OSEs by equipping them to effectively play their role in transforming our economy; ensuring sustainable financial contribution and fulfilling strategic public policy objectives for a Ghana Beyond Aid. The establishment of SIGA is a testament to Government’s commitment to improve the institutional arrangements to achieve our desired objectives. We will continue to improve the policy and legislative framework for the management and governance of our entities through the formulation of a State Ownership Policy, a Code of Corporate Governance, and promulgation of a comprehensive State Ownership.
Law in the medium term. Our ultimate goal, as stated by H.E. President Akufo-Addo, is to irreversibly entrench “a new culture; a culture of accountable governance and of respecting the norms; sensibilities and practice of good corporate governance” and guarantee performance.
We must remain inspired by our successes and not be trapped by these challenges. Focused on seeking improvements, we must sustain these encouraging changes. We must remain resolute in our quest for excellence in this sector; to transform Ghana. We must do this not only because it is our duty to do so, but because it is the right thing to do. In so doing, we would be fulfilling our social contract and empowering our people in these times of renewed urgency for nation building.
As a centre-right party, we are also examining options for more JVCs, Public Private Partnerships and outright sale of selected entities. I invite you to read the 2019 State Ownership Report, be informed and participate actively in this reform process so that “with our gifts of mind and strength of arm, whether night or day, in the midst of storm, in every need, whate’er the call may be, to serve” Ghana, now and evermore. God Bless us all.