Ghana’s Finance Minister Raises Alarm on State-Owned Enterprises’ Crisis

Finance Minister Dr. Cassiel Ato Forson has alerted officials to the serious operational and financial challenges facing Ghana’s state-owned enterprises (SOEs) and joint ventures. He emphasized the urgent need for reforms, noting almost all SOEs are incurring losses. Furthermore, he described the reported profit of GH₵2.2 billion by COCOBOD as misleading, attributing it to a debt suspension and denying actual financial health. The National Economic Dialogue aims to develop strategies for economic revitalization in light of these issues.

The Minister of Finance, Dr. Cassiel Ato Forson, expressed grave concerns regarding the significant financial and operational difficulties facing Ghana’s state-owned enterprises (SOEs) and joint venture companies. During the National Economic Dialogue on March 3, he emphasized the urgent need for reforms to avert a deeper economic crisis, noting that nearly all SOEs are experiencing fiscal distress.

Dr. Forson specifically cited the precarious financial conditions of SOEs, stating, “SOEs and joint venture companies are showing mounting operational and financial risk. Almost all state-owned enterprises are in the red.” He highlighted various enterprises, including the Electricity Company of Ghana (ECG) and Agricultural Development Bank (ADB), as examples of this alarming trend.

Additionally, he criticized the reported profit of GH₵2.2 billion by COCOBOD for 2023, labeling it as misleading. He clarified that this profit result is artificial, arising primarily from a debt suspension that has permitted COCOBOD to defer servicing its financial obligations. According to Dr. Forson, “This profit is because they failed to service their debt because of the debt suspension.”

The National Economic Dialogue convened influential stakeholders such as policymakers, economists, business leaders, and civil society organizations to devise strategies aimed at revitalizing Ghana’s economy. The government plans to incorporate the dialogue’s recommendations in the forthcoming National Budget, raising hopes for substantive actions to restructure struggling SOEs and restore stability to the nation’s economy.

In summary, Ghana’s state-owned enterprises are currently facing considerable operational and financial stresses, as highlighted by Finance Minister Dr. Cassiel Ato Forson. His remarks during the National Economic Dialogue underscore the urgent need for comprehensive reform measures to address these challenges. Furthermore, the misleading reporting of COCOBOD’s profitability signals deeper issues within the SOE framework that must be tackled through informed restructuring strategies.

Original Source: www.graphic.com.gh