President Akufo-Addo has charged heads of state institutions and specified entities in the country to put an end to the phenomenon of posting losses annually and to work towards become profitable institutions.
Losses posted by state enterprises and specified entities in the country between 2018 and 2019 rose by 200% percent according to the 2020 Auditor General’s report.
The latest figure on losses by state institutions as at the end of 2020, stands at 5.3 billion Ghana cedis.
Speaking at the 2022 edition of the “Policy and Governance Forum” organized by the State Interest and Governance Authority (SIGA), President Akufo-Addo noted that this will enable them improve the performance and operate efficiently.
“The late reporting and submission of financial reports by specified entities leaves a lot to be desired and undermines the efforts of the Controller and Accountant General in the presentation of a global picture for Ghana’s public finances. We have to turn over a new leaf,” he said.
Speaking on behalf on the Finance Minister, Ken Ofori-Atta, a Deputy Minister for Finance, John Kumah, expressed regret that while specified entities especially the State Owned Enterprises (SOEs) hold significant assets, their performance and effectiveness leaves much to be desired.
He noted that the Finance Ministry will not consider any request for government support from any specified entities that fail to meet the reporting requirements specified in the Public Financial Management Act and the SIGA Act.
“As of end December 2021, only 31 out of 51 SOE (51%), 22 out of the 89 OSEs (25%), and 22 out of 43 JVCs (51%), have submitted audited financial statements for the year 2020 to finance ministry,” he said.
To deal with the phenomenon, John Kumah announced that under the express instructions of the Finance Minister, Ken Ofori-Atta, “hence forth, the Finance Ministry will not consider any request for government support from any specified entities that fail to meet the reporting requirements specified in the PFM Act, PMF regulations and SIGA Act”.
Additionally, in consultation with the Minister for Public Enterprise, the Finance Minister has directed the Director General of SIGA to “ensure that appropriate sanctions and penalties are applied for infractions of the PFM Act, PFM regulations and SIGA Act including recommendations for removal of members of governing boards”.
According to the 2020 State Ownership Report, the performance of Specified Entities’ has largely trended downwards. State Owned Enterprises consistently posted aggregate net losses from the 2015 fiscal year (G.H. ¢2.16 billion) to FY2020 (G.H. ¢5.34 billion), representing a compounded annual growth rate of 16.32 percent.
Of the 44 SOEs and 16 Joint Venture Companies, JVCs covered in the draft 2020 SOE Report, 50 percent (22 SOEs) and 63 percent (10 JVCs) reported losses. Again, of the 56 OSEs covered, 34 percent (representing 19 OSEs) posted deficits.
