The struggling and underperforming numerous State-Owned Enterprises (SOEs) are set for a major overhaul as the government seeks to chart a new path for them to be listed on the Ghana Stock Exchange (GSE).
This decision could mark a historic turning point for Ghana’s struggling public enterprises, which, over the years, have been performing below expectations.
SOEs in Ghana have become synonymous with running at a loss. Despite the numerous state interventions, SOEs continue to run at a loss, draining the country’s meagre resources.
President John Dramani Mahama recently had cause to lament over the abysmal performance of the state enterprises. In a meeting with CEOs of some SOEs in March this year, the President declared that “enough is enough” as he intends to cease bailouts to these underperforming state enterprises.
He hinted that his government will either collapse, privatize or merge struggling SOEs and also hinted at tying the remuneration and continuous stay in office of CEOs to the performance of their respective enterprises.
But there seems to be a new hope and a new direction for reviving these SOEs. The Ghana Stock Exchange (GSE), in collaboration with the State Interests and Governance Authority (SIGA), is leading a bold effort to bring the most viable state entities to the stock market by the end of this year.
Managing Director of the GSE, Abena Amoah, reveals this direction has received a firm backing from President John Mahama and top government officials, and is being hailed as a potential game-changer for economic governance, transparency, and private sector participation in the public enterprise space.
In an interview with The High Street Journal, on the sidelines of Kasapreko’s Facts Behind the Figures, Abena Amoah disclosed that the Exchange has received “absolute buy-in” from the President and SIGA leadership to fast-track the process of reviewing and listing state entities that are fit for the market.
“The one key thing is that this has buy-in from the top, from the SIGA leadership team, and the entire management team has bought in, and we are working on that. We’ve briefed the president. He absolutely supports this initiative,” she confirmed.
The MD of the GSE reveals that the initial diagnosis of the issues with SOEs is mainly two challenges. She recounts that Ghana’s SOEs have long been plagued by poor governance and limited access to capital. Many of them, she says, operate inefficiently, drain public resources, and fail to deliver adequate returns to the state.
These challenges, the MD says, could easily be addressed with this new direction. According to Abena Amoah, the GSE presents a proven model that tackles both the governance and capital constraints.
“The GSE has a model of that transparency, improving governance and giving access to capital,” she touted.
When SOEs list, they must disclose their operations, finances, and plans. This forces stronger governance. At the same time, listing gives them access to private capital, either through corporate bonds or equity, to expand and innovate.
This strategy aligns with global trends where successful economies have reformed their SOEs by opening them up to private investment through the capital markets. Such reforms not only unlock growth potential but also ensure that state enterprises operate with efficiency, discipline, and accountability.
The process, however, is not expected to be rushed. The GSE and SIGA are currently assessing various SOEs to determine which are most ready to go to market, and which require restructuring or turnaround efforts before becoming viable for listing.
Already, initial engagements between the GSE and SIGA are yielding results, with teams actively reviewing companies’ performance and governance structures. The goal is to ensure that when the entities come to market, they are attractive to both institutional and retail investors.
The potential impact of listing SOEs on the GSE is profound. It could breathe new life into the domestic capital market, deepen investor participation, and stimulate national economic growth. The opening up of ownership to citizens and the private sector is expected to foster shared prosperity, job creation, and innovation within critical sectors.
