The Executive Director of CDD-Ghana and Chairman of the 2025 Constitutional Review Committee, Professor H. Kwasi Prempeh, has renewed calls for far-reaching reforms in the governance and management of Ghana’s state-owned enterprises.
Professor Prempeh warned that inefficiencies within the sector have persisted for decades despite repeated policy discussions about restructuring the institutions.
“We need to rein in these SOEs. This has been going on for far too long, ever since the state got itself into business in Ghana.”
Executive Director of CDD-Ghana and Chairman of the 2025 Constitutional Review Committee, Professor H. Kwasi Prempeh
According to him, the continued failure to implement meaningful reforms has allowed wasteful practices and weak accountability systems to thrive within many public enterprises.
His comments come in the wake of a directive issued by President John Dramani Mahama ordering boards of state-owned enterprises and other public institutions to immediately halt international travel funded by public resources. The measure forms part of a broader government effort to reduce public spending and enforce fiscal discipline.
While acknowledging the intention behind the directive, Professor Prempeh suggested that such interventions alone will not resolve the deeper structural challenges affecting the management of state enterprises.
Economic Importance of State Enterprises
Professor Prempeh emphasized that the performance of state owned enterprises has significant implications for Ghana’s economic stability. He noted that a substantial portion of national economic activity flows through these institutions, making their efficiency critical to the health of the broader economy.
“Upwards of 20 percent of our GDP runs through these SOEs, and their operations generate contingent liabilities and systemic risk for the state and the economy”.
Executive Director of CDD-Ghana and Chairman of the 2025 Constitutional Review Committee, Professor H. Kwasi Prempeh
He cautioned that when public enterprises are poorly managed, they can become financial burdens for the state, especially when government must intervene to support struggling institutions.
According to him, one of the persistent problems within the sector lies in the way operational expenditures are structured. He argued that the cost side of many SOE financial statements is often burdened by questionable spending practices.
“The cost and expenditure sides of our SOEs’ income statements are routinely loaded with all manner of wasteful and corrupt expenditures masquerading as production, administrative, or marketing expenses”.
Executive Director of CDD-Ghana and Chairman of the 2025 Constitutional Review Committee, Professor H. Kwasi Prempeh
Professor Prempeh added that even corporate social responsibility programmes have sometimes been used to justify expenditures that do not necessarily align with the core objectives of the institutions.
Strengthening Institutional Oversight
Central to the governance expert’s proposal is the need to strengthen the oversight role of the State Interests and Governance Authority, the institution responsible for supervising state enterprises.
He questioned why the authority has not yet been equipped with the full powers necessary to effectively regulate the sector and enforce accountability.
“We set up SIGA ostensibly to keep watch over the SOEs and ensure they are governed in the national interest. Why not give SIGA the powers and tools it needs to get its oversight and regulatory job done?”
Executive Director of CDD-Ghana and Chairman of the 2025 Constitutional Review Committee, Professor H. Kwasi Prempeh
Professor Prempeh stressed that sustainable reform must rely on strong institutions capable of enforcing governance standards rather than relying on temporary directives issued during periods of fiscal pressure. “We must rely on institutions to govern, not episodic crisis management directives,” he said.
The CDD-Ghana Executive Director also pointed to a notable contrast between the performance of some state enterprises and Ghana’s investments in joint venture arrangements.
According to him, the country often records stronger financial returns from minority stakes in joint ventures compared to enterprises that are wholly or majority owned by the state.
In his view, this contrast underscores the importance of stronger corporate governance frameworks, professional management and clearer accountability mechanisms within state enterprises.
Constitutional Reform Proposals
Professor Prempeh’s concerns align with broader recommendations put forward by the 2025 Constitutional Review Committee, which he chaired. The committee proposed several measures aimed at strengthening governance within state enterprises.
Among the proposals is the creation of a constitutional oversight structure by embedding the State Interests and Governance Authority within the Constitution. This would effectively establish a permanent supervisory body responsible for regulating commercial public entities and ensuring transparency in their management.
The committee has also recommended restricting political involvement in the governance of state enterprises. Under the proposal, ministers, deputy ministers and members of parliament would be prohibited from serving on SOE boards or management teams.
Political party executives and candidates would also be barred from occupying leadership positions within state enterprises. In addition to limiting political influence, the reform proposals call for the adoption of transparent and merit based processes for appointing leaders of state enterprises.
The goal is to ensure that qualified professionals, rather than politically connected individuals, manage these institutions. The committee has also suggested introducing a single legislative framework that would govern all state enterprises and state-controlled joint ventures regardless of their legal structure.
Stronger financial reporting requirements are also being proposed to ensure that public enterprises disclose their liabilities and fiscal risks more transparently.
For Professor Prempeh, such measures are necessary if Ghana is to transform its state enterprises into productive and accountable institutions.
“We know the right thing to do in respect of our SOEs,” he said, emphasizing that the country already understands how to recruit, reward, and hold accountable the leaders of these institutions. The challenge, he concluded, lies in the willingness to implement the reforms that have long been identified.
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