State-owned enterprises (SOEs) in Ghana faced challenges due to:
(a) Overstaffing
(b) Excessive bureaucracy and laissez-faire management
(c) Lack of technical expertise
(d) Absence of entrepreneurial drive
(e) Low worker incentives
(f) Inadequate working capital
(g) Low capacity utilization

The Government established the erstwhile Divestiture Implementation Committee (DIC) under the Divestiture of State Interests (Implementation) Law 1993 (PNDC Law 326) to implement and oversee all state divestiture policies. Its key functions include:

• Planning, monitoring, coordinating, and evaluating divestitures
• Communicating government policies and objectives related to divestiture

Ensuring consistent procedures for valuation, bidding, negotiations, and account settlements

The objectives of the divestiture programme are:

• To seek private sector investment and management into SOE’s to make them viable/increase profitability over a period after rehabilitation
• To create employment
• To allow Government to concentrate on the business of government – policy formulation

Over three hundred and fifty (350) divestiture transactions have been completed which includes SOEs or parts of them.

(a) Sale of Assets
(b) Sale of Shares
(c) Joint Venture foreign & Ghanaian
(d) Lease
(e) Liquidation

1. Valuation Reports: The Secretariat will conduct an independent valuation of the enterprise’s land and buildings, plant and machinery, and other fixed assets. This valuation aims to provide an inventory of the assets to be privatized and to offer the DIC an estimate of their value, which will serve as an indicative price rather than a reserve price.
2. Information Memorandum: An information memorandum outlining a profile of the enterprise will be prepared. Its purpose is to provide interested parties with comprehensive, accurate, and up-to-date information about the enterprise to help them form an informed opinion.
3. Advertisement: Once the bid documents are prepared, the SOE is advertised for sale. The advertisements must be published in at least two (2) leading Ghanaian newspapers each week for three (3) consecutive weeks.
4. Obtaining bid documents: Interested parties are provided with the relevant bid documents, which typically include a comprehensive set of bid procedures, a draft Sale and Purchase Agreement, an information memorandum outlining the profile of the SOE, and an independent valuation report covering the SOE’s land, buildings, plant, equipment, and other fixed assets.
5. Form of bids: The submission consists of qualification statements and price bids. The qualification statements typically include information about the investor and the investor’s business plan for the SOE. The price bids generally outline the offer made for the SOE’s assets, the schedule for any deferred payments, details of proposed security for such payments, and a comprehensive explanation of how the investor plans to finance the acquisition.
6. Information on price: The DIC prefers the full purchase price to be paid upon completion of the sale and purchase. In cases of deferred payments, the outstanding amount must be secured by a guarantee from a bank or an individual with adequate financial standing. Where appropriate, the DIC may also take security over assets until full payment is made. Interest will be charged on all deferred payments.
7. Due diligence: Investors are allowed to conduct a site visit to inspect the SOE’s assets, operations, and records before submitting their bids.
8. Delivery of bids: All completed bids must be submitted in two separate sealed envelopes: one containing the qualification statement and the other containing the price bid. Bids must be delivered either by hand or by post no later than the closing date specified in the relevant advertisement and bid instructions. Late submissions will not be accepted.
9. Evaluation of bids: A two-stage process is typically used to evaluate bids, with qualification statements reviewed and assessed before any price bids are opened or compared. Price bids from investors with unsatisfactory qualification statements are not considered. In cases where price bids are equal, preference is given to bids submitted by Ghanaian investors.
10. Negotiations: The investor who submits the highest conforming price bid opened is invited to negotiate the draft Sale and Purchase Agreement and discuss the business plan. If negotiations with this investor are unsuccessful, the DIC may approach the investor with the next highest conforming price bid opened.
11. Approval and Signature: Once the DIC reaches an agreement with the highest bidder on the terms of the sale and purchase, it will proceed to obtain formal approval for the transaction from the Office of the President.
12. Offer Letter. Following approval from the Office of the President, the DIC will issue an offer letter to the investor outlining the agreed purchase consideration and payment terms. The investor is required to submit a 10% non-refundable commitment fee along with a letter of acceptance to the DIC within a specified timeframe.
13. Sales and Purchase Agreement: Once the agreed purchase consideration has been fully paid, the Sales and Purchase Agreement is executed, and the relevant assets are transferred to the buyer. This process may involve the preparation and delivery of formal transfer documents, particularly for land and buildings, if these were not provided at the time of completion. Where necessary, the DIC will engage the assistance of the Lands Commission to facilitate this process.
14. Severance and other Statutory Payments: Before terminating the appointments of employees from a defunct entity, the DIC will gather updated employee information from the enterprise. This data will then be shared with the Ministry of Employment and Social Welfare. Following this, the DIC, the Ministry, and representatives of the workers’ union will meet to negotiate and agree on severance packages for the affected employees. In addition, all outstanding statutory payments, such as SSNIT contributions and income taxes, will be settled on behalf of the employees.Bottom of Form

1. Bolgatanga Catering Rest House
2. Bolgatanga Meat Factory
3. Ghana Food Production Corporation (GFPC)
4. Ghana Food Distribution Company (GFDC)
5. State Hotels Corporation (SHC)
6. Ghana National Trading Corporation GNTC
7. State Construction Company (SCC)
8. State Fishing Corporation (SFC)
9. Ghana Consolidated Diamond Company Limited (GCDL)
10. Bonsa Tyre Company
11. Aboso Glass Factory
12. Tema Meat Factory
13. Northern Star Tomato Factory
14. Pomadze Poultry Enterprise
15. Neoplan Ghana Limited

Entities with minority interest holding by the government do not sign performance contracts with SIGA as the state does not have controlling interest in these companies.

The Securities and Exchange Commission and the Ghana Stock Exchange provides a comprehensive framework for transparency and accountability for the Specified Entities listed so there is no need for them to also provide additional information to SIGA.