Deloitte Urges Government to Prioritize SOEs in Finance and Construction
By Praisebell Rosemond Larbi
Deloitte Africa has urged government to concentrate resources and policy support on State-Owned Enterprises (SOEs) operating in sectors where they are demonstrating consistent strength, particularly in financial services and construction, to maximize returns and efficiency.
Yaw Appiah Lartey, Country Manager at Deloitte Ghana, made the call on Monday, September 1, during a media interaction on the 2024 State Ownership Report published by the State Interests and Governance Authority (SIGA). He emphasized that government should take a more strategic approach by backing enterprises with proven performance records instead of spreading limited resources across struggling and unprofitable entities.
“If you look at the portfolio performance, the government performs a lot better in the construction sector and the financial services sector. So if the government is supposed to play or do business, they should support the portfolio in areas of financial services,” Mr. Lartey said.
He singled out Ghana Reinsurance Company as an example of a well-performing state enterprise that has consistently paid dividends to government while sustaining profitability. According to him, such companies should be given stronger backing to expand operations, create more jobs, and increase contributions to the state’s fiscal resources.
“We should support and expand such businesses and enable them to grow so that at least they can pay dividends to the government and employ more people,” he explained.
Mr. Lartey further highlighted the construction and housing sector as another area of strength, citing institutions such as CDC and the Ghana Housing Authority. He observed that SOEs within this sector have demonstrated resilience and potential for long-term growth, particularly in addressing Ghana’s housing deficit while generating economic opportunities.
“The construction and real estate sector is also a good business for the government. Government has a lot of labor in the sector, and we should emphasize and build on that,” he stressed.
However, he cautioned that some sectors, particularly energy, continue to weigh heavily on the state’s finances. He argued that consistently loss-making enterprises should either attract private sector participation or undergo restructuring.
“It’s just interesting to note that Ghana Cylinder Manufacturing Company, for instance, has consistently been posting losses and has recently been acquired by Ghana Gas Company, which is a good-performing company. The ones that are performing well are acquiring those that are under-performing. That’s a good strategy, and we should encourage it,” he said.
His remarks come against the backdrop of the 2024 State Ownership Report, which shows that while a number of SOEs continue to record persistent losses, a handful including those in financial services and construction remain profitable and capable of supporting national development when given targeted investment.
