Economy

SOEs poised to boost tax revenue, GDP

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Eugene Davis

The Director-General, State Interests and Governance Authority (SIGA), Amb. Edward Boateng believes that State Owned Enterprises(SOEs) are not too far from becoming good net contributors of tax revenue and gross domestic product(GDP) of the country.

His comment is on the back of the Controller and Accountant General’s Department, indicating that the country’s balance sheet on its national account is “looking good”. It followed the consolidation of the accounts and assets of SOEs and Specified Entities (SEs).

This initiative has seen significant growth in the country’s GDP in the last three years, with SOEs and SEs making ‘decent’ contributions.

In 2020, SOEs revenue to the country was 10.33bn Ghana cedis representing 3 percent of the country’s GDP, it inched up to 29.11bn Ghana cedis representing 6 percent in 2021and 58.27bn Ghana cedis representing 10 percent in 2022.

Speaking to the press at the second edition of the SIGA Editors Forum in Accra, he said “With time, the SOEs can be good contributors to the tax revenue and GDP.

With the needed support and compliance, SOEs can become known African brands and global brands as they have such capacity to do so.”

He urged them to pay attention to details, be disciplined, and comply with regulations to accelerate growth.

According to him, a recent study tour to China to leverage lessons and ensure that SOEs and SEs become significant contributors to the nation’s GDP aligns with the President’s vision.

Further, he stated “As we look ahead, I hold a firm belief that Ghana can achieve the levels of success witnessed in China’s SOE sector, even though this may seem ambitious today.

It is however worth noting that China’s SOE sector faced similar challenges before the establishment of SASAC in 2003, mirroring some of the issues our sector currently encounters. Likewise, with the inauguration of SIGA, a testament to President H.E Nana Addo Dankwa Akufo-Addo’s visionary leadership, Ghana has embarked on its journey to revitalize its SEs.”

Amb. Boateng also touched on the 17 defunct SOEs that are listed on the books of the SIGA, where he asserted that “We are reviewing some of these entities to see how best they can be listed on the stock exchange, we just don’t want to do the listing such that Ghanaians would not have control, at the appropriate time some of these information would be share.

There is a committee in progress that is working.”

SOEs are a key feature of Ghana’s economy and can be sources of fiscal risks to the country’s public finances. Unfortunately, most of these entities, in a long while, tend to underperform due to a variety of factors, including fundamental problems in their governance and failing to operate like modern, autonomous, and professionally run companies.

While the total 126 of Ghana’s SOEs are valued at GH¢110 billion, representing approximately 27 percent of the nation’s 2020 gross domestic product (GDP), most of these companies have been making losses in the last few years.

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