Embrace new trends in global economies – Bawumia tells State Enterprises

The Vice President, Dr. Mahamudu Bawumia, has urged state enterprises to embrace new trends in global economies to enhance their efficiency, and also contribute meaningfully towards the government’s economic transformation agenda.

Addressing Boards and Chief Executive Officers of state enterprises at the 2020 Performance Contract signing ceremony in Accra on Wednesday Dr. Bawumia told the Boards and CEOs that global economic trend is changing rapidly, especially in the field of ICT, and it is important for them to be abreast with the changes and plan ahead.

“As Boards and management, you should know that the global economic environment is changing fast. As leaders, you will need to be circumspect and develop the ability of looking ahead and (finding) the consequences of those changes on your state entities and plan for them,” Dr. Bawumia told the heads of state enterprises..

“You need to acquire the current trends in ICT resources and deploy them to inject efficiency in your operations.”

The Vice President reminded the boards and CEOs of government’s on-going massive digitization agenda at state institutions like DVLA, NHIS, Registrar General, among others , adding that the digitization agenda is to ensure efficiency in the management of the economy.

“It is of course common knowledge that the government has embarked on a major digitization agenda in our country and it is because we want to bring in efficiency in the management of this economy.”

“We want to encourage all state enterprises to make sure that they are not left behind in this process. There is a lot of efficiency that can be introduced to the services that you offer to the public. Most of the time, the public does not really need to come to you. They can do a lot of these transactions online and you need to provide digital platforms to do so,” the Vice President added.

State Enterprises key to achieving economic policy objective

The Vice President noted that the success or otherwise of government’s economic agenda depend largely on the efficiency of state enterprises, and therefore, urged them to operate efficiently in order to impact positively on the government’s economic transformation agenda.

“The government’s economic policy objective, amongst others, is to build a business friendly economy, grow the economy, create jobs and improve the lives of Ghanaians," Dr. Bawumia said.

“The cardinal role of state enterprises in achieving these objectives is very pivotal. State entities are found in critical sectors of the economy such as, energy, trade, agriculture, manufacturing, housing, transportation amongst others.”

“State entities have the potential to build the economy and can be powerful for national economic development by accelerating socio economic transformation. Indeed efficient operation of the sector provides opportunities for jobs and wealth creation.”

“But there is also a flip side to that coin; that inefficient operations of these state enterprises can drag down the economy and lead to losses in jobs and high cost of living.”

Having underlined the important contributions state enterprises can play to the development of the economy, the Vice President lamented how some state enterprises were bedeviled with mismanagement and corruption in the past, thus plunging them into debts. He challenged the CEOs and the boards to continue to work hard and turn the fortunes of their enterprises.

“Let’s ask ourselves, how can a state enterprise whose core function is to buy and sell a commodity that has a ready market and earn a commission run into debts of hundreds of millions of Ghana Cedis?,” the Vice President asked.

“Most of the state entities we inherited in 2017 were in very bad shape financially. The challenge is to restore your institutions’ financial health and not worsen it,” Dr. Bawumia told the Boards and CEOs.

“As we resolve to grow this country beyond aid, it is critical that our state entities run efficiently so that they can positively contribute to the nation’s transformation agenda."

Background of SIGA and performance contract

In 2019, the government of Nana Akufo-Addo passed the State Interest and Government Accountability (SIGA) Bill into law to deal with challenges associated with state entities. Among SIGA’s core objective is to focus on designing and implementing comprehensive policies and guidance that will assist entities to become high performers.

The 2020 performance contract, which was signed today in Accra is a performance contract between CEOs and boards of state enterprises on one hand, and the government of Ghana, represented by SIGA, on the hand.

Dr. Bawumia explained the reason behind signing the SIGA Law and also explained how the performance contract is crucial in determining the continuous stay or otherwise of a state enterprise CEO or a board.

“There was this lack of transparency and visibility in the operations of state enterprises so it was in the light of these numerous challenges facing state entities that government in 2019 took the bold decision to pass the State Interest And Government Accountability Bill into law to comprehensively deal with the challenges of state entities,” the Vice President explained.

“These performance contracts are not just for show. The performance will be assessed and the continuous presence of the boards and management will have to be justified.”