Kwabena Donkor, Chairman of the Public Administration and State Interests Committee and MP for Pru East, has voiced serious concerns about the management of state-run enterprises in Ghana.
In a recent statement, Dr. Donkor criticized the inefficiencies and difficulties faced by these enterprises, blaming factors such as personal gain, political interference, and poor managerial competence for their struggles.
“I am currently the Chairman of the Parliamentary Select Committee on Public Administration and State Interests. My conclusion is that the Ghanaian State has proven incapable of running Commercial businesses because of personal gain, political interference, partisan patronage, indiscipline and non-appreciation of managerial competency,” he said.
He added that, to address this, he suggested that the country come out with methodologies and strategies that will help state investment to be seen as equity that will yield dividends.
“We are running entities down with very little regard to profitability and sustainability. I am also very convinced that in the developing country context, we cannot leave enterprises solely to the Private Sector if we want to accelerate national transformation and development. We must come out with structures and methodologies that WORK. State Investment in enterprises must be seen as equity contribution that must yield dividends.”
Below is the full statement by the Pru East MP
“The Seven Year Plan of President Nkrumah envisaged a situation where State Enterprises, once they became profitable, would be floated on the Stock Exchange.
I am currently the Chairman of the Parliamentary Select Committee on Public Administration and State Interests.
My conclusion is that the Ghanaian State has proven incapable of running Commercial businesses because of personal gain, political interference, partisan patronage, indiscipline and non-appreciation of managerial competency,” he stated.
Kwabena Donkor, explain that
“We are running entities down with very little regard to profitability and sustainability. I am also very convinced that in the developing country context, we cannot leave enterprises solely to the Private Sector if we want to accelerate national transformation and development. We must come out with structures and methodologies that WORK.
State Investment in enterprises must be seen as equity contribution that must yield dividends.”
The Seven Year Plan of President Nkrumah envisaged a situation where State Enterprises, once they became profitable, would be floated on the Stock Exchange.
I am currently the Chairman of the Parliamentary Select Committee on Public Administration and State Interests.
My conclusion is that the Ghanaian State has proven incapable of running Commercial businesses because of personal gain, political interference, partisan patronage, indiscipline and non-appreciation of managerial competency.
We are running entities down with very little regard to profitability and sustainability. I am also very convinced that in the developing country context, we cannot leave enterprises solely to the Private Sector if we want to accelerate national transformation and development.
We must come out with structures and methodologies that WORK. State Investment in enterprises must be seen as an equity contribution that must yield dividends.
The investment must be sweated to produce increased revenue. The vehicle to be used must therefore avoid State Boardroom control. The State must never have boardroom control but significant enough interest to be meaningful.
A maximum of 40% State interest is what I would propose. This should go with the nomination of Directors based on first and foremost meritocracy rather than patronage.
We must also decide on which enterprises are purely commercial and which would be semi-commercial that the State should hold a hundred per cent equity as incubating with a time frame to graduate into purely commercial.
We must also be extremely careful with what we want. We cannot establish Companies and still want to treat them as Corporations, Authorities, Boards, Commissions etc.
Companies are not parastatals but limited liability companies that should be governed only by Act 992 (Companies Act).
We cannot illegally fetter them with the Audit Service Act or the Public Financial Management Act since Companies by definition are not part of the Public Sector.
We cannot eat our cake and still have it. We must have a definitive position of floating the Companies on the Ghana Stock Exchange once they qualify to be on the Exchange.
Hon. Kwabena Donkor
Chairman, Public Administration and State Interests Committee (MP, Pru East)
