Relinquish Control Of State-Owned Enterprises - IEA Urged Gov't

The founder and Chairman of the Institute of Economic Affairs (IEA), Dr. Charles Mensa says the government should consider relinquishing its control of state-owned enterprises if it wants them to be run profitably.

According to Dr. Mensa, most enterprises owned by the state are under-performing because of interference by politicians.

“They don’t make money not because they are inefficient or they don’t know what to do but because of the demands from the top…and this makes it very difficult for the company to move forward and succeed,” Dr. Mensa told Kojo Yankson, host of the Super Morning Show on Joy FM, Wednesday.

Dr. Charles Mensa
“Some state agencies have remained babies and infants for more than 30 years…If the government really wants these state enterprises to grow and become like private companies [then] they should let them go.

“They should let them be on their own and perform well. You don’t groom a state enterprise for 30 years,” stated the former Chief Executive of Volta Aluminium Company (VALCO).

Pay cuts in SOEs
Vice President, Alhaji Dr. Mahamudu Bawumia on Tuesday bemoaned the current salary levels of some Chief Executive Officers of some public organisations which he said, are not in conformity with productivity.

Addressing a policy and governance forum on State-Owned Entreprises, Dr. Bawumia noted: “a recent report by the Finance Ministry covering about 18 SOEs indicated that they made a net loss of ¢791 million in addition to having received loans and financial support.”

Vice President, Alhaji Dr. Mahamudu Bawumia
“This is no longer sustainable and it is your responsibility to come to the table in the course of this forum with solutions to it,” he charged while supporting moves by the Finance Ministry to rationalize the salaries of heads of public organisations.

This drive if implemented could see salaries and benefits of Chief Executive Officers of some public organisations slashed by as much as 75% in the coming days.

But this may not necessarily make the organisations profitable, Dr. Mensa argued.

According to him, some of the public organisations operate in the same space with private ones and compete with the private sector to recruit the best brains, therefore, “you have no choice but to pay competitive salaries”.

“In the government sector you may be guaranteed your job [for up to four years or more] but in the private sector your job is not guaranteed for that long,” he said.

He added: “The fact that the company is owned by the government does not mean that the particular company operates within the government sector.”

Play audio attached:

Story by Ghana | Myjoyonline.com | Jerry Tsatro Mordy | Email: [email protected], Twitter: @jerrymordy