SOEs record GH¢3.12bn loss, JVCs post GH¢1.35bn profit – Report

The financial performance of 77 enterprises owned by the government of Ghana were mixed, according to the 2018 State Ownership Report

While Joint Venture Companies (JVCs) posted impressive financial results achieving an aggregate net profit of GH¢1.35 billion in 2018 from a net loss position of GH¢272.22 million in 2017, the performance of State-Owned Enterprises (SOEs) further deteriorated in 2018 culminating in a combined net loss of GH¢3.12 billion.

Both SOEs and JVCs posted marginal increases of 7.35% and 2.48% respectively in revenue.

However, the ability of the JVCs to keep their costs down compared with their SOEs counterparts accounted for their contrasting bottom-line results, the report explained.

The report expressed worry about the persistent abysmal financial performance of SOEs.

Finance Minister, Ken Ofori-Atta said, “It is against this background that my Ministry is working closely with the State Interests and Governance Authority (SIGA) and other stakeholders to carry forward ongoing policy reforms aimed at ensuring the efficient and effective achievement of the state’s objectives regarding its ownership interests in SOEs, Other State Entities (OSEs,) and JVCs.”

The policy reforms focus on addressing the key constraints hampering the operational and financial performance of SOEs.

Key among these constraints were the poor corporate governance culture and practices of SOEs. Hence the corporate governance improvement programme which has been successfully piloted in five selected SOEs through the implementation of comprehensive action plans which would be progressively extended to cover all SOEs.

This report covered a total of 77 entities including 36 SOEs, 16 OSEs and 25 JVCs.

In addition to highlighting the operational and financial performance of the entities covered, the report provided an overview of the key developments, particularly critical policy reforms being implemented by the government to enhance the institutional framework for managing the state’s ownership interests in SOEs, JVCs, and OSEs.