The Director-General of the State Interest and Governance Authority (SIGA), John Boadu, has shed light on the reasons why some State Owned Enterprises (SOEs) in Ghana operate at a loss. ‘
According to him, not all of these enterprises are set up to make a profit, as some of them exist to provide essential services to the citizens of the country.
During an appearance on The Probe on JoyNews, Boadu emphasized that SIGA works to ensure that these SOEs adhere to regulations and meet their targets, while also considering the social impact of their operations. In an effort to improve the performance of these enterprises, SIGA is enforcing the requirement for all SOEs to sign up for the State Ownership Report (SOR). This report provides a comprehensive financial assessment of their performance, along with insights into their achievements, challenges, and areas for improvement.
Boadu noted that out of the 175 companies under SIGA’s purview, 53 are SOEs, 47 are Joint Venture Companies (JVCs), and 75 are categorized as other specified entities. He emphasized that while some of these entities have signed performance contracts and shown improvement, there is still more work to be done.
One of the key challenges in improving the performance of these SOEs is ensuring that their objectives align with their market cases. Boadu highlighted the case of the Volta River Authority (VRA), which initially provided various services for free using resources from the public. However, VRA has now begun running some of its institutions, such as hospitals, as independent business entities to reduce losses while still maintaining a social component.
Boadu also mentioned the Ghana Consolidated Diamond Company as an example of an entity that has transitioned to a profitable business model. By utilizing their vast land and running their hospital and school as business entities, the company has been able to turn around its financial performance.
