Ken Ofori-Atta, the Finance Minister of Ghana, has disclosed the government’s plans to privatize Ghana Cocoa Processing Company (CPC) and other State-Owned Enterprises.
According to the finance minister, the government is considering entering a public-private partnership to turn around the fortunes of about 17 State-Owned Enterprises, which includes the Cocoa Processing Company (CPC).
Although the names of all the entities were not given yet, Mr Ken Ofori-Atta, in responding to a question about the future of CPC, said government has considered some level of privatisation to make it profitable.
“If you look at the SOEs, those that are joint venture partners do much better, and maybe that’s what’s needed to go forward. So, there will be more privatisation so that they won’t become a burden on government, while performing their primary task of production.”
Ken Ofori-Atta
This comes on the heels of CPC’s cumulative $163.2 million losses in 14 years (2009 to 2022)-a company that the Government through the Ministry of Finance holds some 26 per cent shares.
Mr Ofori-Atta noted that despite current economic hardship, the Government remains steadfast in investing and providing quality infrastructure, including roads and telecommunication to enable businesses thrive.
The finance minister made this known when he met the members of the Ghana Club 100 on public-private partnerships, and ways to bridge the gap between the public and private sector for sustainable economic development.
Also speaking at the forum, Mr Edward Boateng, the Director-General of the State Interests and Governance Authority (SIGA), disclosed that the 17 companies have already received Cabinet approval for their privatisation.
Mr Edward Boateng expressed confidence that such collaborations will make public entities work profitably, while creating an enabling environment for the private sector to thrive and grow faster with less investment. “That is why we want to collaborate with GIPC to see where we can bring foreign capital to help turn some of these entities around, by working with entrepreneurs and business people.” Mr Boateng added.
Mr Boateng explained that most SOEs failed to be profitable because they were being managed with a “kiosk mentality, where people go into these entities and they manage them as their own little operations”.
Implementation of the SIGA Act
However, Mr Boateng noted that through the implementation of the SIGA Act, there have been an increased oversight responsibility over SOEs, making them more compliant and accountable, resulting in their growth. “We’re working hard to change the narrative because when the narratives of the public sector changes, it basically trickles down to the private sector, which trickles down to increase in government revenues and others,” he said.
On the importance of PPP, he cited the Ada Songor salt project as a testament of collaboration, where the office of the President, Ministry of Lands and Natural Resources, and SIGA worked together with the private sector for profitability. “Through collaboration this entity (Ada Songor salt mine) has been turned over to a private entity and arguably, now the biggest salt winner, not only in West Africa, but Africa,” he said.
Meanwhile, about 25 per cent of Ghana’s debt burden is attributed to non-central government operations, primarily from State Owned Enterprises such as COCOBOD and entities in the energy sector. It is for this reason that the Government under the ongoing International Monetary Fund (IMF) US$3 billion loan-support programme is seeking to improve operational performance of SOEs through management reforms and monitoring to foster more competition and efficiency.
The reform of SOEs would see the implementation of a policy, where there would be a cap on salary adjustment of employees, making them earn lower than negotiated base pay increase on Single Spine Salary Structure for each year.
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