There are 183 public enterprises, including State-Owned Enterprises (SOEs), Joint-Venture Companies (JVCs) and other state enterprises (OSEs), collectively known as specified entities (SEs).

Over the years, the performance of these SEs has largely turned downwards.

The entities increased their losses from GH¢2.1 billion in 2015 to GH¢5.3 billion in 2020, with a compound annual growth of 16 per cent.

As of the end of December 2021, only 31 out of 51 SOEs, 22 out of 89 OSEs and 22 out of 43 JVCs had submitted audited financial statements for 2020 to the Finance Ministry, in flagrant disregard for the reporting requirements specified in the PFM Act of 2016 and regulations, as well as the SIGA Act, 2019.

In recent times, officials from the Ministry of Finance have lamented over the losses made by these entities and have charged the Director-General of the State Interests and Governance Authority (SIGA) to ensure a turnaround.

The newly appointed SIGA Director-General is Mr Edward Boateng, an accomplished private businessman who joined the government, first as the country’s Ambassador to China, before he was brought home in the second term of President Nana Addo Dankwa Akufo-Addo, to take over the leadership of SIGA.

Our Staff Writer, Kester Aburam Korankye (KAK), sat down with Mr Edward Boateng for an exclusive interview on the future of SEs under his leadership. We bring you excerpts.

KAK: Welcome to the Big Interview, Mr Boateng.

Edward Boateng (EB): Thank you very much Kester.

KAK: So, Mr Boateng, for some years now, we have known you to be Ghana’s Ambassador to China, overseeing our relationship with the government of China.

Now that you are home, it is our hope that you will replicate it here. So can you tell us about the government's plans for state-owned enterprises for the next three years and how your leadership would help achieve that?

EB: I think the overreaching objective is to get SOEs to contribute to a substantial portion of our gross domestic product (GDP). The Ministry of Finance is estimating that SOEs should contribute about 30 per cent and they also command about 50 per cent of our asset base as a nation. We have not been able to capture these properly into the national accounts so for us at SIGA, that's our primary objective. To be able to achieve this, we would have to strengthen the management of the SOEs, we have to also strengthen the oversight role of boards and we have to make sure that we have specific Key Performance Indicators (KPIs) for the SOEs.

KAK: Talking about boards, it draws my attention to situations where we have CEOs complain that they are getting too much interferences from their board of directors or maybe, a chairman of the board for instance. How are you trying to bring sanity into this space, where the boards play their role and do not interfere in the day-to-day activities of the management of a company?

EB: The role of a board is to supervise, the role of the board is to have oversight responsibilities. Boards do not have day-to-day management responsibilities. We are going to make sure board members understand their role and abide by it so in this regard, we are having orientation courses for all board members. We also are going to work with management; management also has to understand that they report to the board. Even though their board may not necessarily be their appointing authority, they do have some control over them in terms of how they execute their day-to-day management responsibilities. So what we need to do is to make sure that we begin to separate the lines.

KAK: Tell us about state entities that could list on the Stock Exchange.

EB: During the 2022 Policy and Govvernance forum, the Deputy Managing Director, Abena Amoah, hinted that Ghana Stock Exchange (GSE) had idenified companies which could possibly be listed on the GSAE and was working with SIGA, the relevant agencies and the entities to achieve that goal.

KAK: You have been quite successful in the private sector, even before you came into government. What's the difference in growing an enterprise in a private space and the public sector?

EB: The rules of engagement in terms of management, proper management, proper oversight of boards, are the same. The difference is that government works on a slower wheel than the private sector companies. The reason being government works to broader mandate, whereas private companies work to a smaller mandate. If you work for a public company which is clear about its mandates, you have a broader horizon to also develop yourself as a person and again it depends on what people want to do.

KAK: How do you reconcile with the payment of dividends from state-owned enterprises to government? I understand that for some years now most of the enterprises have not paid anything to the government and it looks like, it has become a norm.

EB: Historically, when state entities were set up after post-independence, I think their mandate was to provide employment, to provide certain goods and services which the government thought were needed. To provide employment was key, and also they took on more social issues. But the time has changed, or is changing so we are going to review the mandate of some of these SOEs.

Some of them have to become more commercially inclined because we have private sector people in their space as well but I still believe that some SOEs like providing electricity, water, health services, those in that space cannot necessarily be commercialised. Those in these sectors still have a critical role to play, so we cannot forget about the public good.

There are some of the SOEs that were created for commercial motives, 20, 50 or 65 years ago, which are not meeting their mandates. I think government should be bold enough to sell some of these to the private sector or bring in private sector participation. SIGA is going to look at these things very carefully and advise the government which is the sole shareholder in some of these entities as to what directions they should take so we'll be looking at that carefully.

KAK: Are there any companies and in the sectors have you identified that needed to be sold off?

EB: About 180 entities, and the government is responsible for these SOEs, other SOEs and other companies. Some of them could be in private hands, or some of them could be joint venture companies that government doesn't have to use budgetary support. Ghana Telecom successfully metamorphosed into Vodafone. It is a clear example. Ghana Telecom was losing a lot of money then, sitting on a lot of good assets. Vodafone came, sold some of these assets off, put in some shareholder value and as they say, the rest is history. There are so many of our SOEs in that space like former Ghana Telecom space that can be turned around using the same formula.

KAK: But is this giving the indication that it’s difficult for government to run businesses?

EB: I wouldn't say it's difficult for government to run businesses but government has a responsibility to the general public. So why would a government be in a shoe making business? Government should be providing water, education, health, housing, social goods, which inure to the benefit of everybody than in my personal view, to be running a shoe factory or a dress making factory or something of that sort.

KAK: Let's come back to state-owned enterprises. Now we understand regulators or regulatory agencies such as the Ghana Standards Authority (GSA), National Petroleum Authority (NPA), are under SIGA. People are advocating that we create licensing systems to raise revenue. So how is SIGA going to empower these regulatory agencies to create these licensing systems for informal sector players like dressmakers, plumbers etc., so that we can tax and monitor them? Is that something SIGA would consider?

EB: Definitely, I think we need to sanitise our market. There are a lot of things that need to be done, and you've cited an example. The challenge is that a lot of our regulators now are also operators so we need to draw that line so that they focus on the job of regulation and the operators also focus on the job of productivity and once we're able to do that clear demarcation; begin to put together dressmakers association, plumbers association, it would be easy for the GSA. So these things need the time and space to begin to produce these things together.

We are working on a SIGA seven-year plan and we are going to include as many as we can of these things which will enhance productivity in the sector.

KAK: I understand that the annual returns or filing of annual returns does not come to SIGA. Most state-owned enterprises default for as many as two years without filing returns with SIGA. Is it something that has come to your attention?

EB: That's going to change, some have not even filed for the last three to four years. They are not filing because there are also challenges. Some of the institutions have legacy issues and because of that, it’s very difficult for them to come up and finalise their audit accounts. Without signed audited account, you can't file.

KAK: So we are talking about legacy debts?

EB: Legacy debts and legacy problems, court cases, a lot of issues so we need to sit with them and find out how to work through some of these legacy issues. If there are court cases, how do we go around them? If there are financial issues, how do we retire these issues or clean the books and move forward?

KAK: Are there going to be sanctions that would be put in place?

EB: Definitely, if you were at our policy forum on Friday, the Minister of Finance made it very clear that defaulting, for instance, as far as the ministry is concerned, if you are a CEO and you are not able to meet your objectives, they are not going to give you budget bailout as it was happening in the past. It’s not going to be automatic. At SIGA, we are not going to endorse such requests and where we have to recommend for one's removal for persistent non-delivery, we would not hesitate to do that.

KAK: There are a lot of things that you may have learnt from China that you would want to bring on board. What are the five interventions you intend to bring on board to SIGA that can turn around the place?

EB: Well, first one is to build my own internal capacity at SIGA because as I said to my team, SIGA is like the coach managing Barcelona or Chelsea or Manchester United. Most of your players have big egos, they make more money than you and you have to manage them. So if you are a coach and you don't have your own internal fortitude and your own capacity and capability, they'll run over you. We need to build our own internal capacity at SIGA and make our brand very strong and respected so that's my first priority.

My second priority is to make sure that SOEs understand why they have to work with SIGA. It's a partnership, a partnership of collaboration but they need to understand that our job is to enhance their own value so we'll be working with them on that.

The third one is to also work with the government, especially the appointing authorities, the Ministry of Finance, and other stakeholders to ensure that SOEs also get their resources. You can't punish people if you don't give them resources to work with. So it's also a chicken and egg situation. Once these things are in place, and if the SOEs are not meeting their mandate, then we at SIGA would have to ensure that the needful is done.

KAK: That is very great, we want to wish you well. I'm sure this conversation will continue as you blossom and implement some of the ideas you have. We would be monitoring to see the progress you're making and we'll give you the support that you need. Thank you Mr Boateng.

EB: Thank you very much. We will be working with institutions such as your organisation because we need to also get the narrative out there. Graphic is also going to be our partner because people need to understand what the story is about and we can only say so much but we need you to also carry the message.