President Akufo-Addo has cautioned heads and management of state-owned enterprises that delays in the preparation and publication of state ownership reports (SORs) which allow the government and the general public to access information and the performance of public enterprises, will no longer be tolerated.
In this regard, President Akufo-Addo has directed that all board chairs, heads of state entities, and their management teams must ensure that their organisation comply fully with the submission requirements set out by the State Interest and Governance Authority (SIGA) going forward.
Addressing attendees of the 2024 Annual Policy and Governance Forum organised by the Public Enterprise Secretariat and the Ministry of Finance, on the theme: “Maximizing Benefits from State Ownership/Interest through Effective Corporate Governance” at the Kempinski Gold Coast Hotel on Tuesday, 23 April 2024, President Akufo-Addo said timely compliance with the SOR requirement of SIGA by state entities will help prevent delayed reporting which could negatively affect the terms of the country’s financial arrangement with the World Bank.
“SIGA is mandated to prepare the state ownership report (SOR), which serves among others as an accountability and transparency document. The SOR gives government and the public access to information on public enterprises and financial and non-financial performance.
“With funding from the World Bank to finance the “Public Management of Service Delivery Programme”, the public enterprises’ secretariat in collaboration with SIGA, and the public investments and assets division of the Ministry of Finance is working to ensure timely reporting of public enterprises performance.
“The 2023 SOR is the first to be published under the “Public Management of Service Delivery Programme,” and it is expected to be completed on or before 31 August 2024. Failure to achieve this target will adversely affect the terms of our financial arrangement with the World Bank,” President Akufo-Addo said.
“The preparation and publication of SORs have always suffered delays due to a litany of constraints. Key among them is the noncompliance of public entities to the submission of finance statements. The 2020 SOR was published in March 2022, and the 2021 SOR was published in January 2024 this year.
“The 2022 SOR is now in the final stages of completion. We should not tolerate these delays any further. All board chairs, entities, and management teams are hereby instructed to comply fully with the submission requirements of SIGA” President Akufo-Addo further stated in his address.
Positive outlook
President Akufo-Addo, in his address, noted that there have been some positive developments since his administration set the ambitious target of getting the public enterprises sector to contribute 30% of the country’s gross domestic product (GDP).
“I want to remind you of the ambitious goal I set for our public enterprises sector, which is for it to contribute 30% of our gross domestic product (GDP). I am pleased to report that I see considerable strides towards this target.
“For example, the latest report from the Controller and Accountant General’s Department indicates that the number of specified entities including in the national accounts has increased from 19 in 2020 to 62 in 2022 and this is because companies now prepare accounts to report on their financial operating performance.
“Though impressive, there is still a long way to go from here. It is heartwarming to observe that by 2021, specified entities have significantly increased their total revenue by 121.8 billion cedis compared to some 34.8 billion cedis in 2016,” President Akufo-Addo remarked.
“By 2021, the number of specified entities that prepare accounts stood at 147 up from the 80 recorded in 2016. Also, entities signing performance contracts with SIGA rose from six in 2016 to 73 in 2023.
“This underscores how transparent and accountable government has been so far as governance and management of our public enterprises are concerned. There is no better way to check corruption than making sure that our public enterprises are governed in a responsible and open manner” President Akufo-Addo further remarked.
Commitment to new code
At the event, the Director General of SIGA, Mr John Boadu, Deputy Minister for Finance, Dr Stephen Amoah, the Minister for Public Sector Reforms, Samuel Cudjoe, and the Board Chairman of the Public Service Commission Prof. Victor Kwame Agyeman shared their thoughts of the code of corporate governance for specific entities and public service organizations in Ghana.
On the charge of the President, public officers pledged to work hand in hand to ensure that the code of corporate governance for specific entities and public service organizations in Ghana is first adopted by all state entities and is fully implemented by all institutions that are bound by its provisions.
The code
The Code of Corporate Governance for Specified Entities and Public Service Organizations in Ghana”, issued by the State Interests and Governance Authority (SIGA) and the Public Services Commission (PSC), in collaboration with the Ministry of Finance and the Public Enterprises Secretariat, is intended to provide guidance and transform the corporate governance practice in the Specified Entities (SEs) and Public Service Organizations, (PSOs) collectively, referred to as Public Organisations (POs).
Studies, including a World Bank Assessment in 2015, identified the major causes of the poor performance of public organisations (POs) to include weak corporate governance and management, fragmentation of the oversight responsibility, political interference in their management, and general mismanagement of these organisations.
These contributed significantly to the running down and eventual collapse of several national commercial and noncommercial entities. These entities were established after Ghana’s independence in 1957 to facilitate the efficient running of public and private organisations for national development.
The Code also delves into environmental, social, and governance (ESG) principles, a concept that has 2 gained much recognition in the realm of corporate governance in recent times. The issuance of this Code represents a feather in the cups of SIGA and PSC.
Beyond this code, the two institutions will continue to collaborate and, with other central management agencies, provide effective oversight and support to the entities under our respective purview in the implementation of this code. This will help avoid duplication and minimise transactional costs for the Entities, without compromising on their respective statutory mandates.
SIGA
SIGA is the acronym for the corporate body established with the passage of the State Interests and Governance Authority Act 2019 (Act 990) in June 2019. It has the mandate to oversee and administer the state’s interests in state-owned enterprises, joint-venture companies, and other state entities and to provide for related matters.
With presidential assent to SIGA on 7 June 2019, the laws that established both the State Enterprises Commission (SEC) and the Divestiture Implementation Committee (DIC) were repealed, with their assets and liabilities transferred to the new entity.
Rationale behind SIGA
SIGA is set up to provide a far better ownership and governance framework for SOEs, JVCs, and OSEs than previously existed. The aims behind strengthening these frameworks are to increase shareholder value and ensure better returns on investment; to provide better coordination among state entities (commercial and non-commercial) and other stakeholders; to enhance the capacity of heads and employees to deliver on their core mandate in the changing business environment; and to ensure customer and consumer satisfaction.
