Politicians use State Owned Enterprises to pay debts

UT boss, Kofi Amoabeng The Chief Executive of UT Financial Services, Captain (retd.) Prince Kofi Amoabeng has observed that state-owned enterprises are means by which politicians pay their debts. He said politicians who win power often owe huge amounts of money to people who invested in their campaigns. They therefore appoint them managing directors and board members to state-owned enterprises to help them recoup their investments. “The state institutions are destined to fail because we appoint people who were in the trenches with us as MDs and CEOs and whatever and appoint board members who are also party functionaries… so the policy drivers…are not judged by the targets or the achievements of the institutions but so long as you keep your ties with the powers that be, you stay there.” Captain (retd) Amoabeng was speaking on Joy FM’s Current Affairs Programme, Front Page, which Friday dealt with the issue of why state-owned enterprises persistently do not do well. He rejected suggestions that governmental interference is not to blame for the moribund state of SOEs, arguing that as a private person who started his business from the scratch, he sometimes receives calls from the Castle, ministers and other high places asking him to give loans to certain people. Asked whether as a successful private entrepreneur, he could successfully manage a chosen SOE, he said “if you get there with a mandate and because of what you say or things you don’t do, you are not given the right amount of monies and on time you are going to fail. So you have to do their wishes to be able to get money to run it in some fashion and you will fail at least to some degree. So we are not ready to actually empower the right people for them to run state-owned enterprises.” “For any corporation or any institution to succeed it must have a corporate plan, it must have performance, evaluation, and monitoring systems in place- so you ask yourself if Ghana sets up a state-owned enterprise, what is the agenda,” he stated. SOEs, he argued will continue to wallow in absolute despondency and perform poorly unless governments extricate themselves from the enterprises. But that will be a difficult thing to do if current practices where the electorates demand financial payments from politicians persist. According to him, the country’s struggle to attract good leaders will remain a mirage if the increasing monetisation of politics continues unabated. “It doesn’t make sense for people who want to serve to pay before serving…people pay to get a service,” he stated. Dr Bill Pupulampu of the University of Ghana Business School, said one of the problems facing SOEs is what he called “organizational constipation.” He said many SOEs had been allowed to over-bloat. According to him, performance contracts should be made into laws that bind managements of SOEs. He believes without the right structures and systems in place, SOEs will continue to perform poorly. Story by Malik Abass Daabu/Myjoyonline/Ghana