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Government backs SOEs with new directive on public business

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Ghana Issues Comprehensive Directive to Reform State‑Owned Enterprises

In a landmark policy announcement that could reshape the public sector, the Government of Ghana has issued a new directive on the operation of state‑owned enterprises (SOEs). The directive, unveiled today by the Minister of Finance, lays out a framework designed to boost accountability, streamline procurement, enhance human‑resource practices and improve financial transparency across all public‑business entities. It is part of the government’s broader effort to reduce the fiscal drag on the economy and to align SOEs with the country’s 2030 growth strategy.


The Context: A Public‑Sector Reform Imperative

Ghana’s state‑owned enterprises have long been seen as a double‑edged sword. On one hand, they provide essential services—from oil and gas to transport and utilities—while on the other hand, many have struggled with inefficiencies, opaque governance, and a high cost to the public purse. A 2022 report by the National Audit Office found that non‑performance among a handful of SOEs accounted for more than 6 % of the government’s annual deficit.

The new directive is therefore a response to mounting pressure from parliament, the public, and international investors to make state‑run businesses more transparent and results‑oriented. It follows a series of consultations with industry experts, civil‑society groups and the International Monetary Fund (IMF), which has been closely monitoring Ghana’s public‑sector reforms.


Core Provisions of the Directive

The directive, which is available in full on the Government’s official website, is organized into eight main sections. While the exact wording is technical, the key themes are clear and actionable:

SectionFocus AreaMain Requirement
1. GovernanceBoard composition and oversightAll SOEs must adopt a board structure that includes independent directors and a dedicated audit committee.
2. TransparencyReporting standardsMandatory quarterly public financial reports that adhere to International Public Sector Accounting Standards (IPSAS).
3. ProcurementProcurement policiesMandatory e‑procurement platforms, adherence to the Public Procurement Act, and regular third‑party audits of procurement processes.
4. Human ResourcesTalent managementNew guidelines on merit‑based recruitment, continuous training, and a transparent performance‑review system.
5. Asset ManagementAsset lifecycleRegular asset audits, risk‑based maintenance schedules and a centralised asset‑management database.
6. Risk ManagementEnterprise risk frameworksImplementation of enterprise risk‑management frameworks aligned with the Basel Accords for financial SOEs.
7. Performance MonitoringKey Performance Indicators (KPIs)Each SOE must develop a KPI dashboard tied to national development objectives and publish it annually.
8. Compliance & EnforcementPenalties and incentivesViolation of the directive can trigger sanctions ranging from fines to removal of board members; compliant SOEs may receive priority for government contracts.

In addition, the directive calls for the creation of a Public Business Council (PBC). The PBC, chaired by the Minister of Finance, will oversee compliance, mediate disputes and recommend strategic shifts, such as the possible privatisation of non‑viable units.


Voices Behind the Directive

The directive’s launch was marked by a series of statements from senior officials:

  • Deputy Finance Minister Amina Osei‑Adjei said, “This directive is a milestone in our journey toward a more efficient and accountable public sector. By tightening governance and mandating transparency, we are ensuring that every public dollar serves the people.”

  • President Nana Akufo‑Addo echoed the sentiment, adding that the policy “will lay the foundation for a robust, service‑oriented public sector that can drive sustainable growth.”

  • Chief Executive Officer of Ghana Energy Company (GEC), Mr. Kwame Bediako, noted that the directive “provides clear guidance on how we can improve our financial reporting and align our strategic plans with national priorities.”

Observers have praised the inclusive process that shaped the directive. The government released a draft in March, which was open for public comment until May. The final version incorporates feedback from the Ghana Investment Promotion Centre (GIPC), the Bank of Ghana and the Ghana Public‑Sector Reform Secretariat.


Implementation Roadmap

The directive stipulates a 12‑month transition period during which SOEs must align their internal systems with the new requirements. Key milestones include:

  1. Audit of Current Practices – Within the first three months, each SOE will conduct an internal audit to benchmark current compliance levels.
  2. Establishment of E‑Procurement Platforms – All procurement processes must be digitalised and linked to the national e‑procurement portal by month six.
  3. Board Restructuring – Independent directors must be appointed to all boards by month nine.
  4. KPI Dashboard Publication – The first KPI reports are due by month twelve, to be published on the Ministry of Finance’s portal and on the SOE’s own websites.

Non‑compliance will trigger the enforcement mechanisms outlined in Section 8 of the directive. This could involve penalties, mandatory restructuring, or, in extreme cases, forced divestiture or privatisation.


The Wider Impact

Analysts argue that the directive could have ripple effects across Ghana’s economy. By tightening procurement and boosting transparency, the government expects to cut public‑sector corruption and reduce the cost of public services. Better governance and clearer KPIs should also make SOEs more attractive to foreign investors and could open doors for joint‑venture projects with multinational corporations.

At the same time, critics caution that the directive may impose heavy administrative burdens on already stretched resources. The success of the reform will hinge on how effectively the Ministry of Finance, the PBC and the audit institutions coordinate with each other and with the SOEs.


Looking Ahead

The new directive arrives at a pivotal moment. Ghana’s debt-to-GDP ratio is hovering around 65 %, and the government is under pressure to maintain fiscal prudence while delivering public services. Strengthening the performance of state‑owned enterprises is seen as a way to reduce the fiscal burden and free up resources for critical development projects such as health, education and infrastructure.

The Ministry of Finance has scheduled a series of workshops across the country to train SOE executives on the new compliance requirements. In the coming weeks, the government will publish detailed guidance on how to integrate the directive with existing laws such as the Public Business Act and the Ghana Companies Act.


Conclusion

The Government’s new directive on public business marks a decisive step toward a more efficient, transparent and accountable state sector. By setting rigorous governance standards, mandating e‑procurement and demanding regular KPI reporting, the directive lays a robust framework for transforming Ghana’s SOEs into engines of economic growth rather than fiscal liabilities. Whether the reforms will deliver the promised results will depend on the commitment of all stakeholders to adhere to the new rules and to work collaboratively toward a stronger, more prosperous Ghana.


Read the Full Ghanaweb.com Article at:
[ https://www.ghanaweb.com/GhanaHomePage/business/Government-backs-SOEs-with-new-directive-on-public-business-1998424 ]