Statement by SIGA on the inclusion of State-Owned Enterprises in the Consolidated National Accounts of Ghana

The Hon. Minister for Finance;

The Hon. Minister for Public Enterprises;

The Chief Director, Ministry of Finance;

The Chief Director, Ministry of Public Enterprises;

The Director, Public Investments and Assets Division;

Deputy Controllers and Accountant-General;

The Head, National Accounts Directorate;

CEOs and Managers of all Specified Entities;

Ladies and Gentlemen, good morning. It is with much pleasure that we begin a new journey of collaboration, early as it is, in the first month of the new year, to look at ways, State Owned Enterprises, play a significant role in Government revenue mobilisation. We are gathered here on the invitation of the Controller and Accountant General to collect, collate and consolidate information for the preparation of the 2021 National Accounts. We at SIGA, consider ourselves partners in this important national exercise. 

As stipulated in our mandate under Act 990, the State Interests and Governance Authority (SIGA) was established to, among other things, promote the efficient or profitable operations of State-owned Enterprises, Joint Venture Companies, and other State Entities, collectively referred to as Specified Entities, within the framework of Government policy.

To this end, the Authority has a responsibility to ensure that Specified Entities adhere to good corporate governance practices. The Authority is also mandated to ensure that SOEs introduce effective measures that promote the socio-economic growth of the country in accordance with their core mandates.

SIGA is therefore expected to be a change agent to ensure that the President’s vision of a prosperous, inclusive, sustainable, empowered, and resilient Ghana is realized as part of the Ghana Beyond Aid agenda.

In furtherance of its mandate, Section 32 (1) and (2) of the SIGA Act, provides that each Specified Entity shall submit timely, complete and accurate information, data, statements, and reports required in the form and manner determined by the Authority. In addition, Regulation 203 (2) of the Public Financial Management Regulations, 2019, (L.I. 2378) requires that each SOE shall submit

  • within two (2) months after the end of each financial year, (by 28th February), the unaudited annual Financial Statements and
  • within three (3) months after the end of each financial year, (by 31st March), the Audited Financial Statements to the relevant Sector Minister and the Authority.

 It is obvious that SIGA has an important role to play in the financial management of Entities in the SOE Sector to ensure that they collectively contribute effectively to national development. It is also apparent that SIGA’s effectiveness will depend on deepening its collaboration with other stakeholders in the public financial management sector.

In this light, we consider SIGA an important stakeholder in efforts to consolidate the Financial Statements of all SOEs into the Annual National Accounts of Ghana for the Financial Year 2021. 

The SOE Sector is expected to be a significant contributor to Ghana’s Gross Domestic Product (GDP). However, the records show that SOEs have consistently posted aggregate Net Losses. It is incumbent on the current leadership to put in place measures such as proper financial accounting and budgeting to mitigate this rather unfortunate recurring trend. It would interest us to know that a large proportion of SOEs are yet to submit their management and audited accounts. Some of these go as far back 2017-2018. This is not acceptable. This has led to the World Bank and other external stakeholders pegging the Ghana SOE sector at a ‘D’ or lower on the ranking scale. It is obvious the Sector has a long way to go to reach what is expected of it. To be able to do so, effective corporate governance practices must be adopted. Key amongst the corporate governance practices that the Sector must adopt are transparency and accountability, which are only possible where accurate and timely information are available to internal and external stakeholders.

Moreover, to effectively discharge this responsibility, SOEs must guard against the problem of insufficient data to fuel the system’s needs. To circumvent this problem, Entities should strive to eliminate any deficiencies in statistics and beef up the local training capability of relevant staff in the subject matter. This means more staffing should be made available and seminars and refresher courses conducted to bring all staff working on the accounts to be abreast with current trends in accounting procedures. Obviously, this calls for collaboration with the Ministry of Finance and the Ghana Statistical Services to develop a system that would be of relevance to the Consolidated National Accounting.

In addition, SOEs must consider the incorporation of the following pre-requisites which have been found to be essential to the promotion and maintenance of a comprehensive system of national accounts into their organizational plans. These include inter alia:

• Strong official support

 • Improvement of human capital through training

 • The development and maintenance of an improved and modernized database

 • Additional data collection to amplify the coverage of data

• Enhanced networking and collaboration among government ministries that produce data and statistics of any kind and

• The technical aspects of field survey

Even though the System of Environmental and Economic Accounting (SEEA) are not particularly stressed in this debate, let me take the opportunity to also bring this subject up briefly for discussion since this framework could be used to link National Accounting.  Analysis of statistics of the economy and the environment at the same will make it possible for SOEs to show different patterns of sustainability for production and consumption and by so doing, bring out the economic consequences of maintaining a certain environmental standard. This is particularly important for the SOE system since the SOE sector activities cuts across the vital areas of Agriculture, Energy, Trade and Banking, all of which impinge on the environmental dimensions of the national economy.

Ladies and gentlemen, SIGA has the legal authority to carry out the mandate of implementing a change management process in the way state entities are administered and managed to ensure that agenda for national planning and development is achieved. This mandate could only be delivered through transparency and accountability, good corporate governance, information disclosure, timely submission of data and reports and payment of dividends by entities and a strong partnership with the SOEs. SIGA will do all it can to put all great minds to work in tandem with SOEs as per our core mandate, so that the yearly performance contracts of SOEs takes care of the modalities set up in the National Account system. But we will also do the needful by ensuring that SOEs that do not comply are brought to the attention of the appointing authorities. We therefore encourage you, distinguished guests, to make this working session on data collection templates a success.

I thank you.

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