State-owned companies record GH¢3.1bn in losses

Government faces an uphill task of turning around the fortunes of state-owned enterprises (SOEs), as the entities recorded more than GH¢3bn in losses in 2018, a report by the Ministry of Finance has shown.

The report, which captured the financial performance of 36 state-owned companies, revealed that the latest financial performance shows a 150.5 percent deterioration over the previous year when SOEs recorded a net loss of GH¢1.2bn.

In a foreword to the 2018 State Ownership Report, published on June 3, Finance Minister Ken Ofori-Atta described the SOEs’ financial performance as being “persistently abysmal” and a source of worry.

“The financial performance of SOEs is a major concern to us, both from the standpoint of the state as an investor, which expects commensurate returns for its investments and as the bearer of the fiscal risks from SOEs,” he noted.

For companies that the state jointly owns with other private interests, there was a marked improvement in their financial performance over the previous year.

Out of the registered 42 joint-venture companies (JVCs), 25 submitted their financial statements, posting an aggregate net profit of GH¢1.4bn in 2018.

This represents a 598.4 percent improvement from the combined net loss of GH¢272.2m posted in 2017.

SOEs and JVCs posted marginal increases of 7.4 percent and 2.5 percent respectively in revenue, with the report stating that the ability of the JVCs to keep their costs down compared with the SOEs accounted for their contrasting bottom-line results.

SOEs recorded operational costs of GH¢17.9bn in 2018, an increase of 18.1 percent over the 2017 figure of GH¢15bn. The JVCs, however, increased their costs slightly from GH¢32.1bn in 2017 to GH¢32.3bn in 2018.

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