Public enterprises have not been well managed – Minister of Public Enterprises
Public Enterprises Minister Joseph Cudjoe observed that poor management of public enterprises (EPs) over the years is what has crippled the productivity of these institutions.
He said that had been the situation since the country gained independence some 65 years ago, a situation he attributed to the current state of some disused factories.
In an interview on JoyNews Morning showon Tuesday he called the mismanagement “very catastrophic” as many factories were divested.
“Today the import we do in terms of all glass, someone predicted that the future would be glassy and so we should have a glass factory because we have the raw material base in that area Today we don’t have it [and] it is because the initiative collapsed.
“We have not managed our public enterprises well. If you look at the list of assignments; companies that have been divested, or that have collapsed and then been divested, you learn the list is in the thousands,” he said.
His comments follow a recent SIGA report on the 2020 performance of public companies.
According to the report, most SOEs had failed to make a profit or break even, and had instead racked up crippling debts amounting to billions of cedis.
Critics have called for the privatization of these underperforming state-owned companies, however, some CEOs have argued that the Covid-19 pandemic has been the cause of their woes.
But Mr Cudjoe says there are measures in place to address concerns that would help revitalize businesses.
He said that the President has started implementing different programs to address management issues in the different public agencies.
“The state also participates in some critical sectors of the economy and complements what the private sector is doing to address the mismanagement of public enterprises that has characterized our history.
“He [the President] is in the process of institutional restructuring to provide the necessary framework to solve the problem,” he added.
Meanwhile, the Dean of the Faculty of Law at the University of Professional Studies in Accra (UPSA), Prof. Kofi Abotsi, has suggested a critical review of the corporate governance structures of state-owned enterprises (SOEs).
According to him, the corporate governance structure of a company contributes significantly to its performance. Therefore, a weak governance structure will result in poor business performance.
speaking on Newsfileon Saturday, he noted that the overly politicized nature of corporate boards has invariably contributed to crippling public companies.
“If we have politicized our councils, and this is a point that cannot be stressed, from government to government, each time a new government comes, we have to form councils. And we have come to this point where, with each new government, all the councils are dissolved and even the universities.
“Unfortunately, we have this law – the transition law – which has actually encouraged not only the creation of inconsistencies, but also the deep politicization of these councils. The question is; what is the character of the board of directors of these state enterprises?
“What are the qualifications of the members of these boards, and to what extent have these boards played the essential role of corporate governance oversight to ensure that things are kept in prudent measures?” He asked.