Latest data from the 2020 State Ownership Report reveals that State Owned Enterprises (SOEs) recorded an aggregate loss of ¢2.61 billion in 2020. This represents nearly 50% improvement over the 2019 aggregate loss of ¢5.16 billion.
Despite the progress made, the 2020 Report which is based on 132 SEs in total (47 SOEs, 17 JVCs, 54 OSEs and 14 Minority Interests) indicates that only 79 state entities out of 132 submitted audited financial statements.
This represents a marked improvement over the maiden State Ownership Report in 2017, where only five audited financials were submitted for analysis. Nineteen (19) other SEs submitted draft accounts, whilst the number of management accounts received totaled thirty-four (34).
Despite this, the Finance minister, Ken Ofori -Atta is worried about the trend and wants it to be reversed.
He is however calling for stringent steps to be taken to ensure that the forty-one (41) entities that could not honour their reporting obligations do so in the next reporting cycle.
According to the report, SOEs’ combined revenue increased by 19.30%, from ¢37.912 billion in 2019 to ¢45.23 billion in 2020.
All sectors, except communications and transportation, recorded improved revenue in FY2020 relative to FY2019.
On the other hand, direct costs incurred by SOEs collectively in 2020 was however ¢32.9 billion, representing a 12.65% increase from ¢29.213 billion in 2019.
The energy and agricultural sectors were the main contributors, accounting for over 80% of aggregate direct costs of SOEs in FY2020.
Total assets of the SOEs portfolio however stood at ¢171.632 billion, whilst aggregate liabilities recorded was ¢119.5 billion in 2020.
In comparison to 2019, the asset base grew by 15.12% with liabilities rising at a higher pace of 22.47%. Non-current assets accounted for approximately 65.81% of total assets.
For total liabilities, 57.37% was accounted for by short-term liabilities. Aggregate equity of the SOE portfolio went up marginally by 1.18% from ¢51.47 billion in 2019 to ¢52.085 billion in 2020.
Also,. Joint Venture Companies, JVCs, achieved an aggregate net profit of GH¢11.81 million as compared to GH¢1.05 billion recorded in 2019.
Total revenue decreased by 5.82%, from ¢13.80 billion in 2019 to ¢13.005 billion in 2020.
Three out of the 17 JVCs, namely Ghana Rubber Estates Limited, Agricultural Development Bank and GCB, reported consistent increases in total revenue over the 5-year period under review. The energy sector, represented by GOIL, generated the highest total revenue (¢5.578 billion) for JVCs in 2020.
Contrary to the increasing trend between 2016 to 2019, direct costs of JVCs as a whole fell by 13.86% to ¢8.681 billion in 2020.
From 2016, it is observed that direct costs rose steadily from ¢7.274 billion to ¢10.079 billion in 2019.
Looking ahead, the Finance Ministry said the state enterprises are a critical part of the journey to fiscal consolidation and macroeconomic stability. Therefore, non-productive and imprudent approaches must be abandoned for more innovative methods to enable the state entities to comply with the directives emerging from Cabinet at its first quarter meeting in March, 2022.
The Finance Minister further urged governing boards of our SOEs in particular to explore long-term progressive plans anchored on constructive strategies in the face of elevated uncertainty, worldwide volatility and national economic concerns.
Other State Entities
In 2020, Other State Enterprises (OSEs) recorded aggregate revenue of ¢19.361 billion, which is a 29.15% increase from the previous year.
In general, revenues have risen collectively by 27% from 2016 (GHS9.153 billion) to 2020.
The increase in total revenue for 2020 was on account of improved performance from regulatory bodies, from GH¢9.198 billion in 2019 to ¢9.526 billion in 2020.
Revenue of statutory agencies increased from ¢3.586 billion in 2019 to ¢5.912 billion in 2020, while that of benefactor agencies went up from ¢2.033 billion in 2019 to ¢3.805 billion in 2020.
Only the Public Education/ Research Institutions sub-group recorded a reduction in total revenue from ¢172.79 million in 2019 to ¢117.52 million in 2020.
The Minority Interests category recorded an aggregate net profit of GH¢11.25 billion in 2020 against a net loss of ¢62.17 million in the previous year.
The “Minority Interest” simply represents entities, mostly mining firms, in which the Government of Ghana maintains a shareholding threshold of less or equal to 10 percent.
According to the 2020 Report the introduction of this new sub-category – “Minority Interests” is to enhance context-driven assessment.
For revenue, aggregate revenue for Minority Interests entities amounted to ¢53.356 billion in 2020, which is an increase of 29.40%, from 2019 (¢41.234 billion). Over 80% of revenues were from the mining sector.
Direct Costs however saw a slight increase of 2.58%, from ¢28.781 billion in 2019 to ¢29.525 billion in 2020.