26.04.2005 Business & Finance

State Enterprises Commission Law to be ammended

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Accra, April 26, GNA - Government is to amend the State Enterprise Commission (SEC) Law 1987, PNDC Law 170 saying it was outdated and must be redefined to bring it in line with current management practice. The decision is also to ensure that the SEC is more efficient in monitoring the activities of the State Owned Enterprises (SOE). Mr Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning, said this in Accra on Tuesday at a seminar for Chairmen of Boards of State Owned Enterprises and their Chief Executives.

The seminar was to update them on government policy, review their performance in contracting and specifically review the implementation of the dividend policy of 2004.

Mr Baah-Wiredu noted that the reporting relationship would be reviewed to place the SEC firmly under the control of the Ministry of Finance and Economic Planning to ensure a more efficient and timely feedback from SOEs and Joint Venture Companies (JVC) on government interests.

Commenting on the performance contract system currently in place, Mr Baah-Wiredu said: "The relationship between the SEC and SOE will be critically evaluated and improved to ensure that it actually delivers the intended outcomes."

He said the Ministry would ensure that its representatives were placed on all Boards of SOEs and JVCs as a means of further strengthening them and making them to facilitate the monitoring role of the shareholder.

Mr Baah-Wiredu said the budget cycle of SOEs and JVCs was being changed to realign it with the financial year to ensure that the budget was read in Parliament before the end of the year.

"There is, therefore, the need for all performance contracts to be signed before the end of October each year, "Mr Baah-Wiredu said, adding, "this will make it possible for the Ministry to capture major project s and programmes to be undertaken by SOEs and JVCs in the ensuing year".

Government also intended to take inventory of all equity investments held on its behalf by SOEs this year, he said. On expectations this year, the Minister said the Government had programmed to increase its domestic resources derived from non-tax revenue including dividend substantially to support national development.

"... it is in this light that you are being called double efforts to help achieve this target by increasing dividend payments into the consolidated fund."

SOEs and JVCs last year contributed a total of one trillion cedis into the national coffers.

He urged the CEOs and Board Chairmen to work to raise the rate of compliance among themselves saying, "the rate is just picking up and ....we should move towards full compliance to send a signal to shareholders that although you operate under difficult constraints you are up to the task".

Mr Frank Ocran, Executive Secretary of SEC, said SOEs had a big role to play and expressed the hope that with a much improved monitoring and evaluation system, they would rise to the occasion and make the investments of government, the shareholder worthwhile. Touching on the implementation of Dividend Policy of 2004, Mr Kwaku Agyeman-Manu, Deputy Minister of Finance and Economic Planning, said, even though, some of it were stringent, it was the best way forward to redeem government's interests and investments.

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