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Ghana's fast moving privatisation programme is offering unparalleled opportunities for the outside investor. As the country moves towards a privatised economy, so investments can be made in major strategic industries and facilities.
The Divestiture Implementation Committee (DIC) is responsible for dismantling state control but, more important for foreign investors, it is simplifying procedures for those wishing to take a stake in Ghana's privatised future.
As more and more state enterprises come up for tender, the DIC is encouraging outside investment, either directly or on joint partnership basis. The pace of change is rapid and there's limited time to take advantage of the opportunities.
Ghana promises the richest rewards to those investing today in her radical drive for economic success.
Come and reap the rewards with us. |
ENQUIRIES |
DIVESTITURE IMPLEMENTATION COMMITTEE
F35/5 Ring Road East, North Labone, P.O. Box CT 102, Cantonments, Accra, Ghana
Tel: (233-21) 772049 / 773119 / 760281 Fax: (233-21) 773126 E-Mail: dic@dic.com.gh |
GHANA’S
PRIVATISATION PROGRAMME
Some time in 2008, Ghana’s divestiture programme would have been running for two decades. Painstaking procedures over these years have ensured that no portion of the programme was ever rushed. Thus from a field of more than 350 state enterprises in 1988, some 30 still remain to be disposed of, one way or the other.
When, in 1988, the government of Ghana embarked on the programme it established the Divestiture Implementation Committee (DIC) to implement and execute it. True to its mandate, the DIC has been focused on reducing the size of the public sector, through the privatisation of state-owned enterprises that were either not performing, or were more likely to perform efficiently as private sector companies.
The DIC was established under PNDC Law 326 and given the following functions:
- to plan, monitor, co-ordinate and evaluate all divestitures;
- to arrange for the effective communication of Government policies and objectives for any divestiture;
- to develop criteria for the selection of enterprises to be divested and to assume responsibility for preparing such enterprises for divesture;
- to make appropriate consultations for successful processing of all divestiture programmes; and
- to ensure consistency in procedures for divestiture with particular regard to evaluation, invitation for bids, negotiation of sales and settlement of account.
At the peak of its intervention in economic activities, the Government controlled more than 350 enterprises. By the end of 2006 more than 320 of these enterprises had been privatised. Many of these privatised entities have now been modernised, made more efficient and productive, and now employ many more people than before privatisation.
Among these are:
- Golden Tulip Hotel, Accra (formerly Continental Hotel)
- Ghana Oil Palm Development Company, Kade
- Coca Cola Bottling Company, Accra and Kumasi (formerly GNTC Bottling)
- Ghana Agro–Food Company, Tema (formerly Tema Food Complex)
- Tema Steel Company, Tema (formerly GIHOC Steel).
The Divestiture Implementation Committee consists of Ministers of State, leaders of labour unions and representatives of the private sector.
The day to day management of the divestiture programme is, however, run by a secretariat, headed by an Executive Secretary who is chief executive officer of the Divestiture Implementation Committee. |
INTERVIEW WITH THE EXECUTIVE SECRETARY OF
GHANA'S DIVESTITURE IMPLEMENTATION COMMITTEE |
Mr. J. K. A. Wiredu
Executive Secretray of DIC
In 1988, as part of measures taken with the encouragement and support of the World Bank and the International Monetary Fund, the government of Ghana embarked on a far reaching programme to divest itself of more than 350 state-owned enterprises that had, over the years, become a perennial drain on the national exchequer. The ultimate aim was to take government out of business, where it did not belong, in the first place. J.K.A. Wiredu has been Executive Secretary of Ghana’s Divestiture Implementation Committee since 2001:
The World Diplomat:
Between 1988 and 2000 more than 300 state-owned enterprises (SOEs) were privatised under the divestiture programme. How many have been divested since?
J.K.A.Wiredu: Fifty-nine enterprises so far since 2000; 51 went by sale of assets and eight by sale of shares.
T.W.D: Which of the SOEs that remain on the divestiture list are scheduled to go in the near future?
J.K.A.W: We have quite a small number, but the main ones slated for divestiture in 2007 are GOIL (Ghana Oil Company), SIC (State Insurance Company), GOPDC (Ghana Oil Palm Development Company), and WESTEL (Western Telecommunications Limited, a private sector/state investment).
T.W.D: How far has DIC gone with the divestiture of SIC, GOIL, and other SOE’s on the Ghana Stock Exchange?
J.K.A.W: Preparations are far advanced for. Shares for SIC and GOIL, for instance, are to be floated on the Ghana Stock Exchange by the third-quarter of 2007.
T.W.D: Most SOE’s have not been divested through the Stock Exchange. What is the reason for this?
J.K.A.W: The sale of shares is just one of several modes that the DIC has been using used in the divestiture programme.
There are also sale of assets, leasing, joint ventures and liquidation. The mode of divestiture depends on the nature of the SOE. For example, where the SOE already has some private sector shareholders, then we resort to the sale of shares. Where the enterprise being divested has distinct divisions, then those assets are divested singly through competitive tenders, usually to private sector investors.
T.W.D: What serious problems has the DIC been facing the divestiture programme?
J.K.A.W: Legal issues, mainly. The DIC has been dealing with a large number of lawsuits on severance packages that were not taken care of as part of past divestitures, and demands for compensation for lands acquired by government from individuals and communities. Title deeds on most of those lands acquired, in some cases, more than 50 years ago, can either not be traced or were simply never obtained and these have compounded the DIC’s problems.
T.W.D: So what is the DIC doing about these challenges?
J.K.A.W: The DIC secretariat is working feverishly to resolve a host of these problems. For example, most of the court cases are being negotiated out of court, and severance packages are being offered, in part or in full.
T.W.D: What is the way forward?
J.K.A.W: A number of investors still owe DIC for SOEs divested to them; many of them have paid only a little proportion of the full amounts that were agreed with them. When our persistent demands for payment had not yielded the right responses, we had gone to law. We’ve changed that, and are now going for arbitration, rather than to the courts.
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