By Clifford Okyere
Some well-meaning Ghanaians have sparked the conversation about the notion in the past that Government should divest its stakes in State-owned Enterprises through the stock market to deepen the capital market and broaden the local investor base of the Ghanaian economy, citing that many emerging economies consciously used strategies such as the privatisation of SOEs through public listing to get a sizable proportion of their population directly involved in the capital market.
Others are also of the view that privatisation is necessary in order to bridge the infrastructural gap in the country using the capital market and also to promote massive public involvement in the market as it is done in countries such as the USA, Japan, India, and Malaysia, as these countries have massive public involvement in the capital market.
European countries such as Germany, Italy, and France have heavily privatised their SOEs, which are reaping bountiful revenue for their countries and also created jobs for their citizens.
In a conversation with the Director-General of the State Interest and Governance Authority, SIGA, Mr. Edward Boateng revealed that there was more to the privatisation of the SOEs and listing on the stock exchange than is perceived in the Ghanaian context.
The SIGA Director-General noted that although industries earlier set up by the government lacked the needed investment and the capacity to expand and become viable, the current conversation about divesting these entities was still in the pipeline.
He explained, “some of these companies or industries that you will see that very soon they will be divested to the public will serve as a means of creating value for companies.”
This is very important because through divestiture, a company can eliminate redundancies, improve operational efficiency, and reduce costs, reducing the country of economic stress while providing substantially no revenue to the economy. Notwithstanding the urge list and privatize State Owned Enterprises, there was a need to ensure there was no foreign hands on any entity which would not tow down the interest of the country by divesting the SOEs as a result of Mass divestiture because there is a low public education on public involvement in the capital market.
“So, we also need to find out local people and local business people who are capable of taking over some of these industries. So yet still there will be divestiture and there will be Public Private Partnership,” according to Mr. Boateng.
On the Issue of Stock Exchange listing, Mr. Boateng reiterated that they were working closely with the Ghana Stock Exchange to find out which of industries or SOEs were tipped to be listed on the Ghana Stock Exchange.
He raised concerns with the available entities ready to recapitalize the SOEs.
”We are looking at various avenues that we can use to re-capitalize some of our industries to make them more profitable and more functional,” according to the SIGA Director General, Mr. Boateng.