We Inherited an Unhealthy Sector But We Have Taken Remedial Actions – President Akufo-Addo
The State Enterprises Commission, with its core mandate to ensuring viability of State Owned Enterprises through good corporate governance practice, has been hosting annual contract signing ceremonies for state-owned Enterprises and Joint Venture Companies. This is done in close collaboration with the Finance Ministry which represents the government.
Before the actual date for this contract signing event, a pre-contract negotiation is held with each SOE during which Performance and Evaluation Department of State Enterprises Commission, leads in scrutinizing activities of SOEs in the year under review, and projections into the coming year.
This process is very key to the socioeconomic advancements of Ghana since SOEs actually hold over 50% of total government assets: all this is in pursuance of the vision of His Excellency Nana Addo Dankwa Akufo-Addo of GHANA BEYOND AID.
This year’s function was held on 19th December 2018 at the Labadi Beach Hotel, was graced by the Senior Minister Hon. Yaw Osafo-Marfo who sat in for His Excellency the President of the Republic Nana Addo Dankwa Akufo-Addo, and Hon. Ken Ofori-Atta, the minister for finance who represents government’s interest in the process.
In his welcome address, the Executive Chairman of State Enterprises Commission Hon. Stephen Asamoah-Boateng opined that “this process is the final step in a series of processes implemented by SEC pursuant to its mandate stated in the State Enterprises Commission Law 1987 (PNDC LAW 170), the first and second of which were the Pre-negotiations Discussions and Performance Contract Negotiations, respectively”.
In assuring the President of positives being chalked at SEC, Hon. Asamoah-Boateng said, “the change that ushered in your government is being felt at the State Enterprises Commission (SEC) too”, for the fact that “from a situation where SEC had been struggling to get the SOEs to undertake this exercise, it has now become regular and central to the sector”. Supporting this novelty with evidence,
Hon. Asamoah-Boateng revealed that “for example, the 2016 contracts were not done while that of 2017 was nearly missed until you appointed me to head SEC”.
Since taking over the helm of affairs at SEC, 25 SOEs were immediately taken through the complex negotiations to sign.
Then in April this year, “significant improvements with was mad with 35 SOEs and 5 Sub-vented Agencies (SAs) submitting to the process and signing their contracts for the 2018 financial year”. In respect of 2019 contract signing ceremony, “45 SOEs and SAs are involved” which, undoubtedly, is a marked improvement of what existed at the time this government took over the reins of our country.
The Executive Chairman took the opportunity to congratulate all the SOEs and SAs for successfully going through the negotiations by mentioning, in particular, the Driver and Vehicle Licensing Agency (DVLA), Ghana Standards Authority (GSA), Environmental Protection Agency (EPA), National Accreditation Board (NAB), Korle-Bu Teaching Hospital, Tamale Teaching Hospital and Forestry Commission for their participation and demonstrating confidence and commitment in the performance contracts system”.
The Executive Chairman could not hide his joy for the fact that though these SOEs “inherited distressed state institutions”, they have “worked hard not only to stabilize the situation but most importantly, beginning to turn them around”.
“I have, since assuming office, consistently spoke about my role in this position as that of being here to serve, and my office will endeavor to raise the standard in the strategic focal role that it has been mandated in the SOEs sector through INCREASE IN REVENUE, COST-CUTTING and AVOID or REDUCE WASTAGE”, VALUE FOR MONEY IN ALL TRANSACTIONS and WORK WITH RELEVANT LAWS TO AVOID ANY UNNECESSARY DISTRACTIONS AND EMBARRASSMENT”, Hon. Asamoah-Boateng noted.
In the area of reporting systems amongst SOEs, the Executive Chairman said “SEC is in the process of reviewing and modifying the current reporting system to make it more responsive to suit current technological needs”. “we are working on a unified, digitized Performance Monitoring and Evaluation Framework for the effective, real-time monitoring of your operations as has been set out in these contracts” and “we shall also increase our physical monitoring visits to enhance our appreciation of your operations in order to improve on our monitoring and evaluation reporting”.
To enhance growth and create more jobs, SEC has been working with the CEOs of SOEs and facilitating the formation of a Chamber of to promote inter-trading activities, encourage each other to attain best international practices through peer review mechanism; and promote knowledge-sharing so as to maximize operational and financial opportunities to serve as challenge, assist and guide to become top-notch companies.
Going into the future, the oversight role played by the Commission is going to change with coming into being of the Single Entity to be known and called State Interests and Governance Authority (SIGA). This will make the SOE sector more responsive and lead the growth to the economy.
In conclusion, Hon. Asamoah-Boateng said, “the Government support and efforts alone will not bring the desired out-turn unless each and every one of us in the ship paddles in the direction of the dream of our hardworking President, HE Nana Addo Dankwa Akufo-Addo”.
The finance minister Hon. Ken Ofori-Atta, in his capacity as representing government interests in the contract signing process, expressed his faith in the CEOs of SOEs and admonished them to continue giving off their best because “while the resources of the country are limited, there is no limit to our collective potential”.
He further elaborated on this point by citing the examples of China and Qatar, where China has made huge strides in the management of SOEs but because it so huge by way of both human and economic power, we do not often hear emphasis being laid on this. But in the case of Qatar, the finance minister said “though it is a very small country, the efficient management of its SOEs has put the country on the global map of socioeconomic development. “This therefore tells us that to achieve results, managerial skill is key” the Hon. Minster stated.
He enumerated some key policies put in place to put the economy back on track as “much better-supervised banking system and growing the Agric sector from 3% in 2016 to 8% in 2018. He further revealed that “we have an incredible situation where our neighbors buy our grains at $200 a ton during bumper harvest, and sell it back to us at $400 a ton during the lean season; a situation he promised the construction of warehouses across the country is meant to address.
In the area of governance, the Hon. Minister said “SOEs must hold Annual General Meetings (AGMs) in compliance with the company’s Act” but he expressed displeasure over the fact that “only 4 SOEs have complied with this year, per my records”. The issue of “strict adherence to PMF Act which stipulates stringent reporting system requirement is going to be fully monitored by Performance, Monitoring and Evaluation department of the finance ministry” Hon Ken Ofori-Atta stated.
The keynote address by the His Excellency the President of the Republic Nana Addo Dankwa Akufo-Addo was delivered on his behalf by the senior minister Hon. Yaw Osafo-Marfo. The president, bent on delivering on social contracts signed with the good people of Ghana, stated that his economic policy objective, among others, is to “create the most business-friendly environment, grow the economy, create jobs and positively improved on the lives of our fellow Ghanaians”.
He said “the cardinal role of SOEs in achieving the above objective is very crucial and vital because SOEs operate in very key sectors of the economy such as Energy, Trade, Agriculture, Manufacturing, Housing, Railways and Aviation which serve as the bedrock of economic development”.
With all the achievements being chalked under his tenure, the president also gave an account of what he inherited by stating that “government recognizes some of the challenges facing your sector such as legacy debts, multiplicity of stakeholders’ policy directives with overlapping and conflicting objectives, dispersed monitoring systems” and promised government’s commitment to taking “strategic steps to surmount the challenges facing the SOEs, and also restore and renew confidence in them”.
The 2016 World Bank report on SOEs bemoaned the situation of multiple state institutions with varying oversight responsibilities that have contributed significantly in the underperformance of the SOEs. The report further mentioned areas of corporate governance practices that require urgent attention for improvement. And to deal with these challenges, the President opined that “Government has initiated various policy reforms and interventions to achieve key objectives of fostering coherence in the supervision and oversight”.
Further step by way of “a bill to establish State Interests and Governance Authority(SIGA) to oversee and administer the equity investments of the State was prepared by the ministry of finance and submitted to cabinet this year for consideration and has been approved” the president revealed. The objective of this new entity is in conformity with our “resolve to grow this country beyond aid, which is critical that our SOEs run efficiently so that they can positively contribute to the nation’s transformational agenda”.
The recent unhealthy working relationship between some Boards and CEOs or Board Chairpersons and CEOs resulting in conflict situations, lack of cooperation, focus in achieving the targets set in performance contracts and advancements of the policy directions and initiatives was put under the spotlight, when the president said “the greatest legacy you can bequeath to the government and the nation for your appointment as Board members is to lift the SOEs to a higher pedestal and make good names for yourselves and descendants but not to focus on other material benefits”.
The president was full of praise for the role being played by the State Enterprises Commission “for their current efforts in dealing with the governance and other conflicts, with its corporate governance workshops and conflict resolution mechanism put in place”. He said, “SEC has also been tasked to come out with a code of conduct for Boards that will spell out the basic principles and standard corporate governance protocols”.
The president concluded his message by admonishing the CEOs and Boards to be mindful of the fact that “we have inherited an unhealthy sector and we have taken responsibility as a government to take remedial actions, and most importantly, ensure our vision for this important sector holds out to assist Ghana Beyond Aid Agenda”.
Newton-Offei Justice Abeeku
Office of the President.