As the government and the State Interest and Governance Authority (SIGA consider plans to list some State-Owned Enterprises (SOEs) on the Ghana Stock Exchange (GSE) in a bid to improve transparency and efficiency, former Minister of Power, Dr. Kwabena Donkor, has welcomed the move, but with a word of caution.
In an interview with The High Street Journal, Dr. Donkor acknowledged the potential benefits of floating profitable SOEs on the stock exchange to attract private capital, improve corporate governance, and boost state revenue through dividend payments.
Already the Managing Director of the Ghana Stock Exchange, Miss Abena Amoah has revealed that plans are far advanced in the process of listing some state entities on the stock market.
She told The High Street Journal in an earlier interview that the hopefully by the end of the year, some SOEs will go live on the GSE.
Speaking in a separate interview with The High Street Journal on a wide range of issues, the corporate governance consultant welcomed the initiative. He added that such a move must be accompanied by a more holistic review of the entire landscape of state-owned enterprises.
According to Dr. Donkor, a number of SOEs and state institutions are “on the books” in name only, offering little or no value to the taxpayer. He cited examples such as Ghana Supply Company Limited and the Ghana National Procurement Agency. In his view, these state entities are no longer serving a meaningful purpose in the present-day Ghana’s economy.
“We used to have the Ghana Supply Commission. Do we need centralized supplies now?” he asked. “Some of these entities haven’t made profit for the last eight years. Why keep them? And we still spend our limited resources on them?”
Dr. Donkor questioned whether the state should continue to retain shares in certain sectors, such as breweries, especially when those enterprises have consistently failed to deliver returns to the national purse.
While supporting the listing of viable SOEs on the stock exchange, Dr. Donkor stressed the importance of data-driven decision-making in the reform process. “There are those macro discussions that we have to take,” he said.
“If they were making a profit and paying dividends to the treasury, then you can justify that. But if not, we must ask why we still keep them,” he quizzed.
Some SOEs, in his view, have demonstrated sustained profitability and operational discipline. He mentioned Tema Development Corporation (TDC), which he noted has had a strong balance sheet and has remained profitable for over three consecutive years.
“There are some in the insurance, reinsurance, and banking sectors like Consolidated Bank Ghana, which has posted profits for the first time this year, that will be attractive to investors,” he said.
Despite his optimism, Dr. Donkor cautioned against viewing the stock exchange listing of SOEs as a silver bullet. He mentions that some entities of the state have been listed in times but failed to perform, hence the need for due diligence.
“I am not 100% certain of this because a few of them, Cocoa Processing Company, was listed and we’ve run it down,” he cautioned.
He believes a deeper conversation is needed around the state’s role in enterprise development and the strategic sectors where public ownership remains relevant.
Dr. Kwabena Donkor is proposing that for underperforming or redundant SOEs, the government should consider either restructuring, merging, or even exiting them altogether to free up public resources for other impactful interventions for the citizens.
