State-owned firms aim for financial strength

Ghana's State Interests and Governance Authority (SIGA) is changing how state-owned enterprises (SOEs) operate. The goal is to make these companies more efficient and financially strong.

Historically, many SOEs have been inefficient and have used public funds without clear returns. SIGA is now pushing for a new approach. It wants SOEs to create value instead of being a cost to the government.

SIGA uses performance contracts, makes sure rules are followed, and closely watches how SOEs perform. This is a big change from the past where poor performance often had no real consequences.

One major new policy is to promote trading and business between different state-owned companies. This means SOEs should try to buy from and sell to each other when it makes sense and is good for business. This helps keep money and profits within the state-owned sector. For example, a state-owned transport company might buy fuel from a national oil company.

This strategy aims to stop money from leaving the public sector. It also helps weaker SOEs by giving them reliable customers and partners. It encourages state companies to work together, rather than as separate units.

This approach also respects how companies are managed. SIGA gives guidance and sets expectations but does not take over decisions from company boards. This balances freedom with the need for accountability.

SIGA's reforms aim to show that state ownership can lead to strong economic growth, not always inefficiency. However, some resistance to these changes is expected, especially from those who benefit from less transparent systems.