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Feature Article of Friday, 25 January 2013

Columnist: Thompson, Kofi

Time To Restructure Ghana's State-Owned Enterprises?

By Kofi Thompson

Over the years since the overthrow of President Nkrumah's Convention People's Party (CPP) regime in 1966, we have witnessed scandal after scandal, in the running of state-owned entities.

Usually, those scandals either have to do with the misappropriation of funds or the abuse of office, by board members and senior management.

Sadly, the scandals that get into the public domain are just the tip of the iceberg. Ghana's Auditor-General's annual reports are invariably replete with such instances of abuse amongst state-owned sector entities.

How, for example, can loss-making entities in the state-owned sector, justify the princely emoluments - huge allowances, stratospheric pay levels and sundry Arabian-Sheik-style perks - enjoyed by their board members and senior management?

That outrage, illustrates perfectly, the disdain for ethical behaviour and contempt for corporate good governance principles that is so widespread amongst members of our nation's ruling elites.

It is also symbolic of the unjust nature of the dog-eat-dog selfishness-culture that is characteristic of the Ghanaian society that has evolved since the overthrow of President Nkrumah in 1966.

How can the huge disparities in the levels of compensation enjoyed by those in the upper echelons of state-owned entities and those at the bottom of the pile - lower-level management and the workforce - be justified?

Surely, the time has come to restructure state-owned enterprises in Ghana - in order to make them more efficient and profitable organisations: as well as ensure that they are underpinned by an ethical ethos?

Why, as a people, do we not agree to give the management and workers of state-owned businesses 25 percent of their shares to be held on their behalf by a legal trust?

Would that not be incentive enough for their management and workforce to be more productive and honest?

And if the government floated a further 25 percent of the shares of such companies on the Ghana Stock Exchange (GSE), to enable ordinary Ghanaians and other investors to acquire shares in those companies - and also raise interest-free capital for those state-owned entities - would those who acquired such shares not demand that those partly state-owned companies are run efficiently in order to increase the value of their shareholding and earn them regular dividend payments?

The government of Ghana can continue holding on to the rest of its 50 percent shares in those entities for strategic reasons.

In the long-term, companies in public ownership such as the Tema Oil Refinery (TOR); the Ghana Water Company Limited (GWCL); the Electricity Company of Ghana (ECG); the Volta River Authority (VRA) and Gridco will only survive and thrive, if all those who work in them (both management and workforce - not just those at the top) share in the value created by their operations too.

One therefore hopes that President Mahama's new administration will soon take steps to restructure Ghana's state-owned entities - to enable them contribute more positively to the growth of our national economy: and help make ours a prosperous and fairer African society. A word to the wise...

Tel: 027 745 3109.

Email: peakofi.thompson@gmail.

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