Parliament has taken The State Interests And Governance Authority Bill, 2019 through The Second reading in Parliament on Tuesday, April 2, 2019.
The purpose of the Bill is to establish a State Interests and Governance Authority to oversee and administer the State’s interests in state-owned enterprises, joint venture companies and other entities in which the State has an interest and further, to ensure that these entities adhere to good corporate practices to promote growth of industry and commerce.
The Bill seeks to reform the governance structure of all state entities. According to Committee of Finance report, “government has resolved to adopt the single entity model to help harmonize guidelines and policies to overseer and administer entities which the state has interest as well as State-Owned Entities”.
The Committee Chairman, Dr. Mark Assibey-Yeboah said, ” the model would involve the establishment of an Authority to enhance coordination in the management of interests and ensure a clear line of accountability from State-Owned enterprises and other state interests”.
Since 1959 Ghana’s legal framework which governs state-owned enterprises has undergone extensive reforms in pursuit of making these enterprises effective and more relevant within the economic development agenda.
Despite these reforms, the performance of state-owned enterprises has been constrained by issues of liquidity, capitalization and indebtedness, compounded by poor governance practices and perceived fragmented oversight by the multiplicity of other government organizations.
Throughout the years, many of the state-owned enterprises have consistently underperformed regarding their objectives, while others continue to incur loses.
At the behest of Government, the World Bank carried out an assessment of the corporate governance framework of the state-owned enterprise sector from 2013 to 2015.
The assessment sought to identify the core issues facing the state owned enterprises in terms of the existing governance and oversight arrangements.
The assessment which focused on Thirty-nine (39) Wholly-owned state-owned enterprises, revealed an aggregate loss of approximately Fifteen Million Ghana Cedis (GH¢ 15 Million) as at the end of the 2012 financial year.
The study further noted that, the un-coordinated oversight of state-owned enterprises by different Government institutions and a lack of clearly defmed ownership frameworks accounted for the poor performance of state-owned enterprises.
Another review carried out on four financial and economic regulators and a Trust, also revealed that these entities suffered from identical corporate governance challenges mainly in the arrears of transparency and accountability.
It was noted that Government should therefore be equally concerned with ensuring good corporate governance of other State entities especially in view of the role they play within the economy, and shaping industries for develoiament.
Story by Edzorna Francis Mensah