The credibility of the latest State Interests and Governance Authority (SIGA) report on the performance of state-owned enterprises (SOEs) has come under intense scrutiny, with policy analyst Bright Simons challenging the methodology used to arrive at its reported turnaround.
Mr Simons, Honorary Vice President of Imani Africa, argued that the reported aggregate profit of about GH¢19.7 billion did not, on its own, establish that Ghana’s state-owned enterprises had experienced the sweeping improvement suggested by the report.
Speaking on the Joy FM’s current affairs programme, Newsfile, in Accra, over the weekend, he said the headline figures appeared to be influenced by factors outside the direct operational control of the managers and boards of the SOEs, particularly foreign-exchange movements and improvements in the broader economic environment.
He said the key issue should be whether the individual enterprises were actually performing better in areas for which their managements and boards could be held responsible.
“What is of interest to us in this conversation is whether [the entities] are doing better?” he asked, pointing to job creation, production, corporate governance and compliance with accounting standards, as some of the indicators that should be examined.
Mr Simons said the report covered 162 entities, comprising 53 traditional SOEs or statutory corporations and other state entities, including institutions such as the Ghana Education Trust Fund (GETFund) and the National Sports Authority.
He questioned the aggregation of financial results from entities with fundamentally different mandates, particularly the inclusion of surpluses from public institutions which were not established primarily as profit-making companies.
Using GETFund as an example, he argued that unspent appropriations could not automatically be interpreted as a commercial surplus and added to the profits of state-owned companies to create an overall profit figure.
“At worst, you can say that we didn’t build schools, we didn’t buy school buses [or] science laboratories,” he said, arguing that such outcomes should instead be examined as performance issues.
Audit concerns
Mr Simons also raised concerns about the quality of financial information available for some of the entities included in the report.
He said 54 entities submitted draft or management accounts rather than fully audited accounts, while 108 submitted audited accounts at some point during the reporting process.
He further pointed to what he described as shortcomings in the aggregation of the financial results, including the treatment of foreign-exchange gains and losses, inter-company transactions, subsidiaries, joint ventures and differences in financial-year periods.
According to him, these issues could affect the reliability of the aggregate figures and financial ratios presented in the report.
He, therefore, called for SIGA to recall the report, undertake a fresh analysis and resubmit it, insisting that the existing figures could not be relied upon for meaningful analysis.
Mr Simons further disputed SIGA’s assertion that the latest report recorded the highest proportion of audited accounts submitted by the entities.
He said his analysis showed that the proportion was about 66 per cent, compared with 68 per cent in 2021.
He also questioned whether the number of profitable entities had improved, saying the number fell from 35 in the previous year to 34 in the latest reporting period.
Beyond profitability, he cited leverage, cash generation, cost recovery, interest cover and current ratios as indicators, which he said, pointed to continuing weaknesses among several SOEs.
SIGA rejects criticism
But the Director-General of SIGA, Professor Michael Kpessa-Whyte, strongly rejected the criticism and defended the report as a credible assessment based largely on financial information submitted by the entities themselves.
He said SIGA was pleased that the report had generated public discussion, but urged those commenting on it to read the 448-page document thoroughly.
Professor Kpessa-Whyte said SIGA had used information from 162 state entities, comprising 108 audited accounts and 54 management reports, adding that the 108 audited accounts represented the highest number recorded since SIGA began publishing the report.
He rejected the suggestion that SIGA had manufactured the figures, stressing that they came from the entities and their audited accounts.
“These are figures from audited accounts from the entity,” he said, adding that the auditors were appointed by the Auditor-General and that the audit reports ultimately fed into Parliament’s public accounts process.
The SIGA boss also rejected the suggestion that the report had ignored the influence of the wider economy.
He said the report itself explicitly acknowledged that foreign-exchange movements had significantly influenced the performance of the entities.
However, he argued that it would be misleading to completely separate the economic environment from SOE performance because macroeconomic conditions—including exchange-rate, inflation and interest-rate stability—affect the ability of managers to make decisions and improve their organisations.
He described the reported improvement as a turnaround that should nevertheless be discussed cautiously, rather than as a complete transformation of all SOEs.
Professor Kpessa-Whyte challenged Mr Simons and Imani Africa to submit their specific concerns formally to SIGA, saying the authority had not received such a report from them.
He also disputed the criticism that the analysis had been produced without proper engagement with the SIGA report, alleging that much of Mr Simons’ initial review had been generated using artificial intelligence and had relied on previous figures.
Mr Simons rejected that assertion, saying AI-assisted tools were used only to process large volumes of information and that the analysis itself was based on professional judgement developed through nearly two decades of policy research.
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