The Director-General of the State Interest and Governance Authority (SIGA), John Boadu, has explained that some State Owned Enterprises (SOEs) make losses because not all of them operate as businesses.
Speaking on The Probe on JoyNews, he said some of them are for the provision of services for the citizens of Ghana.
He added that SIGA ensures that their regulations are respected and their targets are achieved, while taking into consideration the social environment they find themselves.
As a result, SIGA is working to ensure that all SOEs sign up for the State Ownership Report (SOR) where the management provides a comprehensive financial assessment of the performance of state enterprises, and offers insights into their achievements, challenges, and areas for improvement.
“As we speak, it’s 175 (companies). That’s the number of enterprises we have. Let me give you the details of the breakdown. SOEs were 53, JVCs (Joint Venture Companies) were 47, and other specified entities were 75.”
“Even with the 175 that we’ve had, if you check those that have signed performance contracts, you realise that there’s much improvement, but we need to do a lot more. One thing you must notice is that most of these organisations are not necessarily set up to make profit. Some of them are for the provision of social good for the citizens of this country,”Mr Boadu said.
He noted that in improving some of these entities, one major challenge was seeing that the objectives for setting them up and their market cases had changed.
However, SIGA has been able to ensure that some of these important institutions run as businesses.
“Let’s take VRA for instance. They are into helping in the distribution of electricity. They will be into transport, real estate, provision of health, provision of education and all that. It was good at that time, because at that time, we had then established with people’s resources from the places that they give it out for free. So, that service is there, and all those services add to the losses they are making.”
“So now what they’ve been able to do is that, they’ve started hiving off some of these important institutions and running them as business. So for instance, if you go to VRA now, their hospitals run as a business, although there’s a social component part of it, to reduce their losses.”
Citing the Ghana Consolidated Diamond Company as another example, he said the institution has vast land that has not been fully utilised, and also runs a hospital that residents of Akwatia visited for free.
But “now it’s [The hospital] just running on its own as a business entity and not making losses anymore. They have a school that they are running now as a business entity and they are doing so well. We have empowered them to, so we have a new status and board specifically for them, for them to run as an entity,” Mr Boadu added.
The SIGA Director-General believes that these institutions and many others have a huge potential to make a lot of profit for the country, and as such his outfit is working to ensure they are run smoothly.
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