The Minister of Public Enterprises, Joseph Cudjoe, says he believes some heads of State Owned Enterprises (SOEs) are sitting on assets they need to utilise as the first recourse to capital injection in their organisations.
He noted that the government had made much investment in SOEs, saying it is time they are made to become sustainable, particularly under the stringent global business environment.
Mr Joseph Cudjoe made the call when he took his turn at the Ministers’ Press Briefing organised by the Information Ministry yesterday in Accra.
The Minister cited the turnaround made at the Intercity STC Coach Limited, saying the new Managing Director, Nana Akomea, effectively used the company’s brand to its advantage, making it now compete with the private sector transportation companies.
“But initial MDs were not seeing the vision to take advantage of that brand asset and do business to generate revenue. Had it not been for COVID, STC would be smiling by now because they really attained a turnaround until the lockdown,” he said.
“We want public enterprises to operate profitably and write dividends cheques to support the government for it to deliver the social goods and services. The mindset we are causing every specified entity to entertain is a mindset of survive on your own because we have invested enough in you,” the Minister said.
“We don’t want you to sit on the assets as if it’s your private property and have a right to it. It is for all of us; so, when you have the opportunity to sit in there, we don’t expect you to operate, make a loss and wear red band and go to the street calling on the government to bring more money,” Mr Cudjoe cautioned.
He noted, however, that some need support to execute their mandate “so entity by entity assessment, those that genuinely need support will be supported. We encourage all SOEs that you are sitting on assets, and you need to utilise them as the first recourse to capital injection and then the rest will follow.”
Improved financial reporting
The Minister noted that the financial reporting in the State Ownership Report (SOR) had improved from 18 entities in 2016 to 132 in 2020.
“The financial reporting in the sector has shown growth in numbers from 18 entities in 2016, 49 in 2017, 77 in 2018, 106 in 2019 and 132 in 2020,” he stated.
The Minister was optimistic that the current figures would show an improvement in the 2021 State SOR, which is currently under preparation.
He indicated that in spite of the challenges of the Public Enterprises sector and the contingent liability it had posed to the national budget in the past, the story is changing.
Mr Cudjoe further indicated that compliance with reporting requirements and reduction in losses since 2017 were setting the stage to make the sector gain the vibrancy envisaged at their creation.
“This has been occasioned by improvement in reporting, which has also resulted in the submission of audited accounts and management reports which hitherto was not the case. It is a well-known fact that the value of an organisation in financial terms cannot be appropriately assessed without access to financial statements and audited accounts.
“The value of state enterprises relative to the overall economy, therefore, could not be easily ascertained. However, the improved situation in gaining information based on the financial reports had made this possible,” the Minister stated.
He explained that financial reporting in the public enterprises sector is important to the economy because it governs the determination of sector requirements for informed decision making.
“The lack of financial reporting in the public enterprises sector leads to corruption, and that is what the current government is fighting against,” Mr Cudjoe pointed out.
He also explained that the publication of the SOR, since 2017, had enhanced transparency and encouraged public disclosure on investment outcomes by the state.
He said the current discussion, which has been engendered as a result of the 2020 SOR, is based on government’s willingness to be open as to what is happening with the state entities.
The Minster thus encouraged all stakeholders to take active interest in the state entities, and to provide constructive criticism to make the enterprises work effectively, efficiently and profitably.
He said specified entities (SEs) would continue to play a significant role in the economy, adding that opportunities exist for them to make real contribution to the development of the nation.