 Divestiture
and New Schemes for Private Initiatives
One of the key tasks of the government over a decade now is how to reduce calls on public finances for support of loss-making enterprises in order to reduce the burden of the country in maintaining the day-to-day performance of State-owned Enterprises (SOEs). As a consequence, the government in its overall economic recovery strategy in 1988 begun a systematic privatization program to improve the performance of the enterprises by mobilizing private sector capital.
Vice-President Mills emphasized that Ghana is very busy divesting some of the enterprises that have been a drain on the economy and which can best be operated by the private sector.
The sell off, which is described as the most ambitious privatization scheme in the sub-region, is gathering pace. Some 200 out of 350 public owned companies have either been divested or are in the process of being sold-off. While most of the smaller firms have been sold off through asset sales, big enterprises such as Ghana Airways, the nations airline, State Insurance Company and Ghana Re-Insurance are yet to be divested.
Mr. Emmanuel Agbodo , Executive Secretary of the Divestiture Implementation Committee (DIC) said government was committed to the success of the privatization program which will be extended to the utilities, water and electricity. On the whole, studies have shown that divested companies are making headway in performance.
One of the success stories is the Ghana Oil Palm Development Company Limited (GOPDC). With the objective of diversifying agricultural production through the introduction of oil palm cultivation in an economy dominated by the production of cocoa and tropical wood, the government in 1975 launched the GOPDC with 13.6 million dollar world bank assistance.
| The first phase of the project which was completed in 1982, included a 3,500 hectare industrial plantations, a thousand hectare block plantings for small holders, a 200 hectare plantation for outgrowers and a palmoil mill with a capacity of 15 ton fresh fruit bunches per hour.
In 1995, the government of Ghana, under the auspices of the World Bank and the International Monetary Fund, initiated an ambitious privatization program that resulted in the privatization of GOPDC.
In a competitive bid, Siat Ghana Limited bought the majority share of 60 per cent with the government taking 20 per cent and the small holders, the outgrowers and the staff taking 15 and five per cent respectively. The project which has become a shining example, has achieved huge success in its expansion program.
Mr. E. L. Quartey, the Chief Executive of Ghana Airways, is looking forward to the privatization of the nations airline, "a privatization will bring about capital injection much needed by the airline, privatization means greater opportunity, greater investment."
The mode of divesting some of the SOEs has not been smooth. Some worker’s groups felt not too happy by either the mode of divestiture which gave them less severance pay or sidelined in their bid to acquire shares either through partnership or outright purchase of the company. On several occasions arbitration committees have been able to settle disputes arising out of the sell-off but others remain unsolved. |
GHANA
