Rethinking SOEs: Expert calls for listing and policy change
Business Leader and Brand Expert Elorm K. Foli has urged the government to speed up the process of listing some of the state-owned enterprises (SOEs) on the Ghana Stock Exchange Market.
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He said this would help improve transparency and help revive some of the SOEs making losses.
In an interview with Graphic Business, he said he was against the outright sale of these SOEs but leans more towards the government divesting its shares through listing on the local bourse.
“There is apprehension when people find out that a state asset is being sold, and the fear always is that it’s being sold to government cronies.
“So, in this case, even if it's selling off 51% to private investors, it should be done through the stock market. I believe that floating enough shares and being on the stock market so that there's controlling interest to private entities could make sense,” he stated.
Transparency
Mr K. Foli, who is the Chief Executive Officer of E.K Brand Consult, said for SOEs to have the impact expected, there must be more transparency and accountability.
He stressed the need for these entities to start exploring sustainable strategies to maintain their relevance, underlining the pressing need for change.
It is estimated that SOEs lose more than GH₵1 billion annually to various infractions, including mismanagement and cronyism.
Mr Foli said these problems may persist if transparency and accountability are not prioritised, with the proper management of these entities.
“One of the most important things, when it comes to corporate governance, is transparency. We need to make good use of technology to monitor the activities of these SOEs.
“So in that case, what we are looking at is how to enhance transparency, how to ensure that the data that is being used for decision-making in these agencies is publicly available enough so that there can be some oversight in whether or not the decisions are based on data,” he explained.
Change in policy
Mr Foli also advised the government to channel its resources into supporting young start-ups rather than investing them in these SOEs.
“We must step back and ask ourselves what guided our foray into these specific industries. I know some of them are legacy decisions. Shortly after independence, there were certain industries that, based on what the global markets looked like, it was a good idea for us to be involved in.
“But I believe that the future of SOEs may look a little bit different so I think we have to be open to the idea of it being different,” he stated.
He said the government must focus on young people who are driven to work but lack startup capital and support them.
He explained that the state must start looking at itself as a venture capitalist investing in young businesses rather than in the industry.
“We know that a certain population of the youth are driven to work in certain industries, but they might be short on capital. Is the state going to be able to provide financial support? Instead of just providing grants, can we provide loans that can be converted into equity when the businesses are successful?
“The government might be able to mobilise funds well, but there's an issue when it comes to management. So if you have someone who starts a business and the government provides funds and can monitor the activities, the government will make revenue as the business succeeds,” he added.