The Director General of the State Interests and Governance Authority (SIGA), Prof. Michael Kpessa-Whyte, has defended the figures contained in the Authority’s report on the performance of state-owned enterprises (SOEs), insisting that the data were drawn from audited accounts of the entities.

Speaking on JoyNews’ Newsfile on Saturday, September 5, Prof. Kpessa-Whyte said the figures presented by SIGA were based on accounts audited through a process involving auditors appointed by the Auditor-General.

"SIGA did not conjure or manufacture the figures. These are figures from audited accounts from the entity, and the auditors to these entities were appointed by the Auditor-General, and it is the Auditor-General’s report out of this account that ultimately makes its way during the Public Accounts hearing,” he said.

He explained that several of the concerns raised about the figures and the performance of the state-owned enterprises had already been acknowledged and addressed in SIGA’s report.

“So I want to be clear that some of the issues that have been raised are already captured in the report,” he said.

Forex and operational efficiency

Prof. Kpessa-Whyte said SIGA had been clear in its assessment that foreign exchange movements played a significant role in shaping the performance of the entities.

He, however, stressed that the reported improvement could not be attributed solely to foreign exchange gains, as operational efficiency had also contributed to the results.

“For instance, Forex. We made it clear that the performance has been largely shaped by Forex, and we also made it clear that a significant part of it was based on operational efficiency as well,” he said.

He cautioned against presenting observations already contained in SIGA’s report as though the Authority had failed to account for them.

“So you don’t take what is already reported in the report and come out as though you have observed it and you are criticising the report,” Prof. Kpessa-Whyte said.

According to him, SIGA deliberately included the relevant caveats and contextual issues in its assessment to ensure that the performance of the state-owned enterprises was not viewed in isolation.

“All these disclaimers and issues have been well spelled out in the report. We were clear in our mind that the report must be situated within the economy,” he said.

Macroeconomic conditions

Prof. Kpessa-Whyte further argued that the performance of state-owned enterprises should be assessed against the broader economic conditions prevailing at the time.

He said SIGA had therefore considered the economic circumstances that influenced the outcomes recorded by the entities.

“So we discussed the economic circumstances of the country that shaped the outcome that we were observing based on the report,” he said.

He acknowledged that separating the impact of foreign exchange movements from operational efficiency could be useful in determining the extent to which managers of individual state-owned enterprises had contributed to their performance.

“And this issue about separate Forex from operational efficiency and everything legitimate, as it may sound because it will allow us to know what managers of the entities are doing extra, beyond what support they are getting from the macroeconomic environment. It’s legitimate,” he said.

However, he argued that the broader economic environment itself was not independent of government policy and economic management.

Prof. Kpessa-Whyte said policies that promote exchange rate stability, lower inflation, and more predictable interest rates could provide state-owned enterprises with a more stable environment in which to make long-term decisions and improve their operations.

“But does the economic circumstances improve by itself or it was based on sound economic management by the government in power?” he asked.

“If the government in power is pursuing policies that are producing exchange rate stability, stability in inflation, stability in interest rate, it gives the head of these entities the comfort to be able to be more certain and predictable in the way in which they make decisions to turn around,” he explained.

State-owned enterprises can perform

The SIGA Director General also challenged what he described as a perception that state-owned enterprises are inherently incapable of performing well.

He said the reported improvements should not automatically be dismissed simply because they involved publicly owned entities.

“So you see, there is a certain cognitive dissonance in this country that suggests that state-owned enterprises cannot do well,” he said.

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Prof. Kpessa-Whyte was, however, careful not to describe the performance as a complete turnaround, stressing that the results should be interpreted cautiously.

“To wake up and hear that there is significant turnaround, which I wouldn’t say that it was a complete turnaround because it has to be cautiously discussed, does not necessarily mean that state-owned enterprises cannot do well,” he said.

He suggested that some of the criticism surrounding the figures may be influenced by a longstanding belief that private-sector institutions are more capable of achieving strong performance than state-owned entities.

“That is what I observe about some of these comments,” he added.

Prof. Kpessa-Whyte maintained that SIGA remained open to scrutiny and constructive discussions about its findings.

He said the Authority welcomed conversations that could help improve the management of state-owned enterprises and ultimately contribute to Ghana’s development.

“But like I said, we at SIGA are very open to constructive conversation, not only on our report, but on anything that will make us, the Ghanaian people, better,” he said.