Divestiture meant to cut down subsidy demands on government - Peprah

Akosombo (Eastern Region), 14th June 99 -

Mr Kwame Peprah, Minister of Finance, on Saturday said government's decision to implement the divestiture programme was basically to cut down on subsidy demands on government and make enterprises more efficient.

These were to translate into the generation of profits and the payment of more corporate taxes on the profits so generated, "a situation which was totally unimaginable under the former State-Owned Enterprises (SOE's ) regime".

Mr Peprah said these at a seminar on the modalities of divestiture of state-owned enterprises at Akosombo for members of the Council of State, Presidential Staffers and Members of Parliament. It was organised by the Divestiture Implementation Committee (DIC)

The seminar is to seek the views of the participants on the divestiture programme and seek their advice on how its implementation could be enhanced.

Mr Peprah said the government is concerned about the high levels of subsidies it has to pay, directly and indirectly, to ensure the sustenance of SOE's and keep people in employment.

He noted that government's major concern is the "deepened dwindling resources as against the increasing and totally justified demands of the rural folk".

Mr Peprah told said the commencement of the programme itself was not easy, "knowing that the decision marked a complete turn-around of what the country used to believe in: state domination of the economy as was in vogue in many emerging economies of the world".

He said after several years of this practice, it became evident that all SOE's lacked the vital elements of recapitalisation, as almost all of them operated with technologically obsolete plant and equipment while management expertise and commitment were also lacking.

Mr Peprah, who is also chairman of the DIC, admitted the complexities that have characterised the privatisation process, saying "it is a complex political and economic issue all over the world".

"But after over a decade of privatisation or divestiture in Ghana, the committee is still constantly looking for ways and means to improve its implementation so that stated objectives can be achieved", he said.

In a speech read for him by Mr Ken Dzirazah, Deputy Speaker of Parliament, Justice D.F. Annan, Speaker of Parliament, said as the nation moves towards the second milestone of her democratic era, it is the responsibility of members of the council of state to work at consolidating the democratic and economic gains chalked so far.

He told them that they have a crucial role in ensuring that the ordinary citizen understands and is abreast with the implementation process.

"Coming from different parts of the country, you are seen as the link between the people and the presidency. This places you in a better position to explain objectively government policies and the benefits accruing from the medium of simple statistical illustrations".

Mr Emmanuel Agbodo, Executive Secretary of DIC, said the divestiture programme has been transparent and open to all and called for increased Ghanaian participation, especially in employer/management buy-outs which, he

He said under the Reform Operation Economic Support Programme, the government will son place a number of enterprises for divestiture.

These include the Tema Oil Refinery, Ghana Oil Company, Electricity Company of Ghana Limited, and Ghana Ports and Harbours Authority.

The others are Ghana Railways Corporation, National Investment Bank, Ghana Co-operative Bank, Bank for Housing and Construction and Ghana Commercial Bank.

Mr Agbodo said the Public Utilities Regulatory Commission will ensure that after divestiture, consumers are taken care of in terms of pricing.