President Nana Addo Dankwa Akufo-Addo has launched State Interest and Governance Authority (SIGA), an entity that has been mandated to ensure the efficient management and viability of state-owned enterprises in the country.
The newly instituted entity, established by ACT 990 of 2019, replaces the State Enterprises Commission and the Divestiture Implementation Committee.
Effectively, the statutes which established both the State Enterprises Commission and the Divestiture Implementation Committee have been repealed, with all their assets and liabilities transferred to the new entity.
The President, speaking at the 2019 Policy and Governance Forum in Accra, said the decision for the new entity was arrived after a considerable evaluation to rationalise and strengthen the supervisory and oversight functions of state-owned enterprises, which have over the years been plagued with poor governance practices, financial mismanagement and unfocused objectives, rendering them ineffective in their contribution to national development.
“The establishment of this Authority presents us with a great opportunity to change the narrative of negative returns on investments and not so good corporate governance practices which has resulted in the carving of a bad image for these bodies”, he explained.
The President recalled that in the early years of the country’s independence, several state enterprises were established and joint venture businesses were entered into by successive governments to operate in critical sectors of the Ghanaian economy to ensure, among others, that employment opportunities were equally distributed among the people.
To enhance their effectiveness to deliver on their mandate, President Nana Addo said several reforms were introduced through the enactment of statutes and the establishment of associated agencies to deal with their oversight and co-ordination.
However, with the passage of time, most of these statutes, such as the Statutory Corporations Act and the State Enterprises Commission Act, became outdated and unfit for purpose.
He added that entities that were set up at the State Enterprises Secretariat to regulate the activities of these enterprises also suffered systemic internal failures, with some incurring heavy losses and others accruing high debts and facing near collapse.
Beside this category, the President said there are also majority of other enterprises that are unable to fulfil their operational obligations while others have developed the attitude of regularly relying on government bailouts.
He continued that apart from entities under divestiture, the Government of Ghana is currently holding equity interest in about 103 enterprises, including joint venture companies, in key sectors of the economy such as banking, insurance and allied services, mining, energy, petroleum and agriculture.
To address these problems, however, the President said the need arose to institute a harmonised and centralised oversight of these SOEs.
He added that extensive review of recommendations culminated in the passage of the SIGA Bill in April 2019 and later received a presidential assent in June 2019.
The new law gives SIGA an extended mandate to not only monitor the performances of these state enterprises, but also streamline ownership issues in other specified entities.
SIGA is also to, among others, develop a code of corporate governance to guide and promote sound governance and institutional performances of specified entities and also assist the Minister of Finance to ensure that borrowing levels of these SOEs are in accordance with the Public Financial Management Act and ensure that dividends due the state are paid.
Source: The Finder
