The State Interest and Governance Authority (SIGA) has responded to recent calls by Mr. Franklin Cudjoe, Founding President of IMANI Africa, for its dissolution, emphasizing the critical role it plays in the governance of State-Owned Enterprises (SOEs) in Ghana.
In a press release issued by the Corporate Affairs Division of SIGA, the Authority expressed disappointment in Mr. Cudjoe's position, suggesting that it might have been different had he sought clarifications on the numerous initiatives and activities currently being pursued to enhance performance and compliance among Specified Entities (SEs).
Across the globe, SOEs have been established as essential pillars of national economic development strategies.
Despite their crucial economic role, historical evidence from the 1970s and 1980s indicates that SOEs often underperformed compared to private firms, largely due to mismanagement and fragmented oversight.
To combat these challenges, many countries, including Singapore, China, France, India, and South Korea, adopted centralized oversight models to ensure that SOEs were managed efficiently, transparently, and in alignment with national economic goals.
In Ghana, a 2015 diagnostic study by the World Bank highlighted significant challenges in the governance, management, and financial performance of the country’s SOEs.
The study revealed that oversight was dispersed across various government actors, leading to overlapping responsibilities and a lack of comprehensive financial information, which severely hampered effective state oversight, strategic planning, and decision-making.
These findings underscored the need for a more structured and centralized approach to SOE oversight, leading to the establishment of SIGA through the SIGA Act (Act 990) in 2019.
SIGA is mandated to oversee and administer the State’s interests in Specified Entities, which include SOEs, Joint Venture Companies (JVCs), and Other State Enterprises (OSEs).
In addition, SIGA is responsible for developing a code of corporate governance guidelines to promote sound governance and introduce private sector practices to drive efficiency, sustainability, and profitability within the institutions it oversees.
SIGA’s strategic intent is centered on three critical results: Organizational Excellence, Operational Excellence, and Financial Sustainability. These results drive the Authority’s goals of achieving SEs' contribution to Ghana's GDP of no less than 30%, minimizing losses in the Annual State Ownership Report, and embedding efficiency as a dominant characteristic of the SEs.
SIGA’s strategic plan is divided into three phases:
- Short-Term Objective (Transition and Consolidation):
Spanning from inception to FY2024.
- Medium-Term Objective (Expansion and Growth):
Spanning from FY2025 to FY2027.
-Long-Term Objective (Transformation):
Spanning from FY2028 to FY2029.
Over the past five years, SIGA has made significant progress toward achieving its short-term objectives.
The Authority has been staffed with competent personnel working synergistically to strengthen its oversight role.
Collaborating with stakeholders, SIGA developed the Code of Corporate Governance, which received Cabinet approval in FY2023.
Additionally, the State Ownership Policy was also approved by Cabinet in FY2023, providing further guidance to enhance the legal and institutional framework for oversight and corporate governance within SEs.
To ensure legitimacy with SEs and other stakeholders, SIGA developed a comprehensive list of Specified Entities, approved by Cabinet in FY2023.
This list includes 175 SEs, comprising 53 SOEs, 47 JVCs, and 75 OSEs.
The list has facilitated clearer engagements with SEs, enabling the signing of annual performance contracts, monitoring of SE operations, training of boards and entity heads on corporate governance, and more.
SIGA has also initiated a real-time monitoring project to digitize SE reporting, allowing SEs to upload financial and operational information onto a portal for analysis and decision-making.
The pilot phase is nearing completion, with significant data already uploaded.
This system is expected to improve the accuracy and timeliness of SE performance reports, thereby enhancing decision-making processes.
SIGA’s efforts have led to a significant increase in the compliance and submission of annual financial statements.
From just 18 SEs submitting financial statements in 2016, 147 SEs had prepared and submitted financial statements for FY2023 as of July 2024.
This marks a major improvement in transparency and accountability within the SE sector.
Additionally, the number of SEs covered in the Annual State Ownership Report (SOR) has increased from 18 in FY2016 to 147 in FY2023, with the FY2023 SOR set to be published in real-time by the end of August 2024.
Financial performance within SEs has also improved, with revenues rising, losses decreasing, and the net worth of SEs showing marginal improvement.
The 2023 SOR provisional data indicates that aggregate SOE losses dropped from GHS14,402 million in FY2022 to GHS2,573 million in FY2023.
Similarly, losses among majority JVCs and OSEs have decreased significantly.
SIGA’s strategic engagements with other oversight bodies have also contributed to a reduction in financial irregularities within the SE sector.
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he 2023 Auditor General's Report revealed a 41.6% decrease in total irregularities among Public Boards, Corporations, and other Statutory Institutions, from GHS15.059 billion in 2022 to GHS8.799 billion in 2023.
As SIGA moves towards its medium-term objective of Expansion and Growth from FY2025, the Authority will focus on optimizing the value of Government of Ghana shares in SEs, rationalizing SE portfolios, and advancing real-time monitoring and consolidation of funding for both the Authority and SEs.
The Authority will continue to foster close relationships with stakeholders to monitor, evaluate, and support SEs in their journey towards efficiency and profitability.
SIGA remains committed to transforming SEs to reduce the fiscal burden they pose and contribute to Ghana’s socio-economic development.
Story by: Joshua Kwabena Smith
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