Privatisation of state enterprises-“Let’s encourage local investors”

Story: Boahene Asamoah
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AN Executive Director of Strategic African Securities (SAS), Ms Abena Amoah, has called on the government to give local investors the opportunity to own part of state-owned enterprises (SoEs) it intends to privatise by listing shares on the Ghana Stock Exchange.
She said since the Government was holding such SoEs in trust for the people of Ghana, it was appropriate that local investors would be given the opportunity to be part of such companies, when they were privatised.
Speaking in an interview, Ms Amoah stated that if the Government intended to sell such SOEs to a strategic investor, floating such shares on the stock market would not prevent strategic investors from buying shares in such companies.
“The stock market is critical to the development of every economy,” Ms Amoah stated adding that “this is what has created wealth for so many economies”.
She said there had been tremendous interest by Ghanaians as in the recent Initial Public Offers (IPOs) and rights issues, saying that there were over 50,000 applicants for the Ghana Commercial Bank rights issue.
Additionally, she stated that there were over 10,000 applicants for the Ecobank Ghana’s IPO launched last year, pointing out that there had also been over subscription of such issues at very short offer periods.
She called on the government to also hasten its own policy of using the stock exchange as an exit strategy in the privatisation of state-owned enterprises.
Ms Amoah said “the process has been too slow” adding that more companies needed to come on board.
She said investors were still waiting for IPOs of companies such as Ghana Telecom, Westel and Twifo Oil Palm Plantation.
The government announced in the 2006 budget statement that it would use the GSE as its exit strategy for the privatisation of SOE.
So far, Ghana Oil Company, Benso Oil Palm Plantation (BOPP) have been listed since the government made that decision. Many others such as the State Insurance Company (SIC) and Ghana Telecom among others are expected to be listed on the market in the near future.
She said the stock market offered tremendous opportunities for companies to raise capital and create wealth by way of dividend and capital appreciation.
“Through IPOs companies have raised capital and created wealth for its shareholders, she stated.
She added that by listing on the stock market companies could employ the services of foreign skilled labour to manage the affairs of the companies, stressing that Ghanaian managers could learn from those expertise.
“Foreign investment and labour skills transfer are critical,”adding that “it confers the benefit of being part of an international company while others strive to be part of an institution of international standing.”
Ms Amoah again stated that listing on the stock market had ensured transparency in the management of companies and in most cases had ensured efficient management, since the companies were accountable to their shareholders.
She said the country needed to step up the game of deepening the stock market activities if it hoped to play in the emerging economies of the world by encouraging listings on the stock market, adding that privatisation would ensure that companies raised capital and created wealth.