Business News of Tuesday, 2 October 2018
State-owned Enterprises (SOEs) in the country recorded a net loss of GH¢1.29 billion last year, the State Ownership Report has revealed.
The report, launched in Accra, however, said that the losses were a reduction over similar losses recorded in 2016.
According to the report, the bane of SOEs was their chronic inability to contain costs, as their aggregate operating cost increased by 56.5 per cent last year.
“This is of concern, given that inflation and interest rates have been on a downward trajectory,” the Senior Minister, Yaw Osafo-Maafo, said when he launched the report at the second annual State Owned Enterprise Policy and Governance Forum in Accra.
The two-day event, being organised by the Ministry of Finance, is on the theme: “Promoting good governance in the State Owned Enterprise sector through accountability, transparency and integrity.”
Director of the Public Investment Division of the Ministry of Finance, David K. Collison, said the report covered 33 SOEs and 16 Joint Venture Companies.
He said the Energy Sector had 19 per cent, 27 per cent for the financial sector, agriculture and infrastructure constituted 17 per cent each, with manufacturing and communications comprising 10 per cent each.
Mr. Collison said the JVCs cumulatively made a net profit of GH¢800 million and paid dividend to the tune of GH¢44.36 million.
The SOEs paid a dividend of GH¢259.5 million, while mining companies in which the state has carried interest paid GH¢91.48 million.
On employment, he stated that 45 entities employed 49,101 people, with 32 SOEs creating about 74 per cent of the jobs.
The report also indicated that the government’s fiscal exposure to the SOE sector amounted to GH¢8.23 billion of outstanding on-lent loans (loans the government contracted on their behalf or with sovereign guarantee).
It said only 48 out of the 86 entities repeatedly contacted by the Ministry of Finance submitted requested information, while State Owned Enterprises had not submitted their 2017 audited financial reports as of the end of April, this year.
That, the report indicated, was contrary to reporting requirements stipulated in the Public Financial Management Act (PFMA) 2016 (Act 921).
The PFMA, particularly Sections 4, 5 and 6, confers defined powers on the Minister of Finance and the Chief Director of the Ministry in their oversight of SOEs.
These include the appropriate sanctions regime that the minister is empowered to exercise in respect of errant SOEs.