SIGA signs performance contracts with state enterprises

Eighty profit-oriented or income-generating state entities yesterday signed performance contract agreements with the State Interests and Governance Authority (SIGA) for this year.

The signing came after the entities had held rounds of negotiations with SIGA on their deliverables and terms of performance, with a projection that they would pay about GH¢1.2 billion as dividend to the state.

The Director-General of SIGA, Mr Stephen Asamoah Boateng, announced at the signing ceremony in Accra yesterday that SIGA would build a database of the specified entities and carry out vigorous monitoring of every entity which signed the contract.

Signing

The ceremony, which was on the theme: “Transforming state entities to contribute significantly towards Ghana Beyond Aid”, was attended by ministers of state, chairpersons of boards of directors, chief executive officers (CEOs) of state-owned enterprises (SOEs), joint venture companies (JVCs), members of the Diplomatic Corps and representatives of Ghana’s development partners.

The state entities were from various sectors, including trade, agriculture, energy, health, works and housing, rail development, employment and labour relations.

They are SOEs, some regulatory bodies and JVCs in which the government has interest, such as mining companies in which the state holds interest.

Mr Asamoah Boateng reminded the entities of the serious implications which accompanied the enactment of the State Interests and Governance Authority (SIGA) Act, 2019 (Act 990), after signing the performance contracts.

He said although some other institutions were yet to complete the whole process, SIGA would continue to engage them to finalise the process within the first quarter of the year.

He said 45 entities went through a similar exercise last year and also signed performance agreements.

“We have departed from the State Enterprises Commission (SEC) era, when non-compliance did not mean anything.

This time, there are heavy penalties, ranging from refusal to grant bonuses, financial charges, recommendations to the appointing authority to remove managements and boards of directors and prosecution, leading to court fines and jail terms,” he said.

He said SIGA would work with various stakeholders to come up with a code of corporate governance and conduct, adding that it must be completed quickly to enable the authority to ensure higher standards of corporate governance across the board.

Mr Asamoah Boateng said SIGA would publish a league table of individual CEOs in the last week of July this year for the public to appreciate who was doing well.

Foresight

He commended President Nana Addo Dankwa Akufo-Addo for his vision, foresight and personal involvement in getting the SIGA Law and every process through to this date and explained that SIGA had, since its inception, engaged various stakeholders, including chief directors of various ministries, CEOs of SOEs, chairpersons of boards, ministers of state, parliamentarians and the media to sensitise them to the objects of the SIGA Act (Act 990), as well as the mandate of the authority.

Challenges

Commenting on the challenges faced by the entities, Mr Asamoah-Boateng said many of the specified entities were saddled with huge legacy debts, which were hindering their smooth operations, while a number of them were unable to honour their statutory obligations.

He said a sizeable number of the entities had also lost business focus and indulged in activities which were not their core operations.

“Others have jettisoned good corporate governance practices, leading to avoidable challenges and decisions, as well as boardroom wranglings, some of which were in the public domain,” he added.

He gave an assurance that the challenges were being dealt with, while cogent and sustainable solutions were developed to start a new and excellent business environment.

Interview

Later in an interview, Mr Asamoah Boateng told the Daily Graphic that SIGA would support and give bailouts to some of the entities that were facing liquidity and operational challenges to enable them to perform better.

“The most important thing is for them to remain focused on their mandates and deliver.

They should avoid unnecessary disruptions when it comes to corporate governance.

They should also promote local Ghanaian business men and women,” he said.

Statutory provision

The Vice-President, Dr Mahamudu Bawumia, who witnessed the signing ceremony, said the event was in fulfilment of a statutory provision under Regulation 196 of the Public Financial Management Act, 2016 (Act 921).

He described the event as historic, as far as public sector management was concerned, emphasising that the government’s economic policy objective was to, among other things, build a business-friendly environment, grow the economy, create jobs and improve on the lives of the people.

Vice-President Bawumia said the specified entities had a cardinal role in achieving such objectives, as efficient operation by their sectors provided the opportunities for jobs and wealth creation, saying if they were inefficient, it could drag the economy down.

“State entities are found in critical sectors of the economy and have the potential to grow the economy.

They also have a powerful legacy for national economic development by accelerating socio economic transformation,” he pointed out.

He added that the government recognised some of the challenges in the sector, such as dealing with legacy debts, low working capital and weak corporate governance structures, and advised the entities to be mindful of those obstacles.

The Vice-President also encouraged all SOEs to buy into the digitisation agenda of the government to conduct a lot of their services online to deal with corrupt practices.