Understanding SIGA’s Policy of Encouraging Inter-Trading Among Specified Entities

Written By: Prof. Michael Kpessa-Whyte

The purpose of this piece is to demonstrate that SIGA’s policy of encouraging inter-trading among certain specified entities is lawful in principle, commercially rational, and fully consistent with its mandate to safeguard and enhance the value of the State’s ownership interests. Among others, the policy derives its legitimacy from Ghana’s State Ownership Policy. Properly understood, the policy does not amount to unlawful market interference, nor does it displace the internal decision-making authority of boards and management of the affected entities. Rather, it is a strategic ownership-guidance measure designed to strengthen cooperation within the State’s portfolio, retain economic value within the public asset base, promote efficiency, and support the long-term sustainability of enterprises in which the State has a direct interest.

At the heart of the matter is the nature of SIGA’s statutory role. SIGA exists to oversee and administer the State’s interests in specified entities, promote efficient and profitable operations, improve corporate governance, monitor performance, and ensure that these entities contribute meaningfully to national development. That mandate would be unduly narrow if it were interpreted to mean that SIGA may only observe performance after the fact but may not encourage strategic conduct capable of improving value creation across the State’s ownership portfolio. On the contrary, if the State is the shareholder or beneficial owner of a broad portfolio of enterprises, it is entirely legitimate for the State, acting through SIGA, to encourage patterns of commercial cooperation that reduce leakages, create synergies, and improve aggregate returns within that portfolio. Inter-trading, in this context, is not an arbitrary preference; it is an ownership strategy aimed at maximizing public value from public assets.

The rationale for such a policy is straightforward. Where one specified entity produces goods or services that are required by another specified entity, it is commercially sensible for SIGA to encourage the consideration of intra-portfolio transactions, provided those transactions are competitive, lawful, and aligned with operational needs. This is because such arrangements can help retain revenues within the State ecosystem, deepen institutional collaboration, improve economies of scale, reduce transaction inefficiencies, and enhance the financial performance of multiple entities at once. A fragmented approach in which state entities routinely bypass one another and channel business outward, even where suitable internal capacity exists, may weaken the collective strength of the portfolio and dissipate value that could otherwise be preserved for the benefit of the State and, ultimately, the public. Encouraging inter-trading is therefore not merely a matter of preference; it is a reasonable tool of portfolio optimization.

This policy is also defensible on efficiency grounds. In many cases, specified entities already operate in adjacent or complementary sectors. Encouraging them to explore business opportunities among themselves may reduce duplicative search costs, shorten procurement cycles where lawful processes are followed, strengthen predictability of demand, and foster long-term institutional partnerships. Such cooperation can also stabilize public enterprises that have viable commercial offerings but face demand uncertainty, thereby supporting their profitability and dividend-paying capacity. From a public finance perspective, this is significant. If state-owned or state-controlled entities become stronger, more efficient, and more profitable through legitimate commercial exchanges, the State stands to benefit through improved dividends, reduced need for bailouts, enhanced tax performance, and greater resilience of strategic national assets.

Potential criticism often centers on fairness, especially the concern that encouraging inter-trading may distort competition or amount to preferential treatment. That concern deserves a serious answer. The correct response is that SIGA’s policy, properly framed, does not compel blind patronage, nor does it require entities to contract with one another irrespective of price, quality, competence, or legal compliance. Rather, it encourages entities to give due consideration to credible providers within the State’s ownership portfolio where such providers are capable of meeting the relevant commercial, technical, and regulatory requirements. In that form, the policy is not unfair. It does not abolish standards. It does not nullify fiduciary duties. It does not authorize wasteful or uneconomic transactions. Instead, it invites entities to factor the broader public interest and portfolio value into decisions that are still subject to established governance and procurement disciplines.

Indeed, fairness must be understood not only from the perspective of external market actors, but also from the perspective of the State as owner. The State is entitled to organize its ownership interests in a manner that protects and enhances the value of its investments, so long as it does so within the law. A policy that encourages state entities to consider doing business with one another, where such business is commercially sound, is no more inherently unfair than a private holding company encouraging collaboration among its subsidiaries or portfolio companies. What matters is that the transactions remain transparent, justifiable, and compliant with applicable procurement and competition norms. Therefore, the fairness objection fails if it assumes that encouragement is equivalent to coercion or that strategic coordination is equivalent to illegality.

The issue of compliance is equally important. Any defensible inter-trading policy must operate within the framework of existing law, including procurement law, public financial management rules, enabling statutes, sector-specific regulations, and corporate governance standards. SIGA’s encouragement of inter-trading must therefore be understood as guidance operating within, not outside, these legal boundaries. Boards and management remain responsible for ensuring that each transaction complies with the Public Procurement Act where applicable, satisfies internal approval processes, reflects value for money, and is consistent with the entity’s mandate and fiduciary obligations. In other words, SIGA may encourage inter-trading as a strategic ownership objective, but the implementation of any specific transaction must still pass the usual tests of legality, prudence, and commercial reasonableness. This is precisely why the policy is defensible: it does not seek to replace the law but to guide entities toward lawful, mutually beneficial commercial relationships.

A further concern may be that such a policy intrudes into managerial autonomy. That concern is overstated. There is a crucial distinction between strategic ownership guidance and operational micromanagement. SIGA’s role is not to negotiate contracts on behalf of entities or to usurp the decision-making powers of boards and executives. Its role is to articulate expectations that align with the State’s ownership objectives, including value creation, financial discipline, and coordinated performance improvement. Within that framework, management retains responsibility for due diligence, supplier evaluation, contract negotiation, and compliance. Far from undermining autonomy, this approach preserves the proper institutional balance: SIGA sets the ownership logic and performance expectation; boards and management make the operational decisions in conformity with law and governance rules.

There is also a strong developmental justification for inter-trading among specified entities. Many state entities operate in sectors with strategic national importance, including energy, transport, finance, insurance, logistics, and infrastructure. When capable public enterprises transact with one another, the effect may extend beyond narrow revenue gains. It can strengthen domestic productive capacity, support employment, improve service integration, and reinforce the resilience of critical sectors. This is particularly relevant where the State’s broader developmental goals depend on institutions that are financially viable and capable of acting in coordinated ways. Seen in this light, SIGA’s policy is not simply about internal commerce; it is about using the State’s asset base intelligently to support national development while improving returns on public investment.

Moreover, inter-trading can serve as a discipline-enhancing mechanism within the public sector itself. If specified entities know that they must compete credibly for business from fellow state entities, they are incentivized to improve price competitiveness, service standards, reliability, and innovation. A properly governed inter-trading framework does not reward inefficiency; it challenges entities to become worthy commercial partners within the portfolio. That dynamic can help drive organizational reform and performance improvement, which are core concerns of SIGA’s oversight function.

The strongest defence of SIGA’s position, therefore, lies in its character as a prudent and lawful exercise of active ownership. The State is not a passive spectator in relation to its enterprises. It is an owner with legitimate interests in efficiency, profitability, sustainability, and public value. SIGA, as the institution mandated to safeguard those interests, is justified in encouraging relationships that strengthen the collective performance of the entities under its oversight. Such encouragement is especially legitimate where it remains non-arbitrary, respects procurement and governance laws, preserves board and management responsibility, and is directed toward measurable value creation.

In conclusion, SIGA’s policy of encouraging inter-trading among certain specified entities is both legitimate and strategically sound. It reflects a rational ownership approach aimed at retaining value within the State’s enterprise portfolio, improving institutional cooperation, promoting efficiency, enhancing financial sustainability, and advancing the broader public interest. Properly implemented, the policy does not offend fairness, undermine competition, or violate compliance obligations. Rather, it operates within the legal and governance framework as an instrument of coordinated value creation. For these reasons, SIGA’s position is not only defensible; it is a responsible and forward-looking expression of its duty to protect, preserve, and optimize the State’s ownership interests.

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