Former Power Minister and three-term Member of Parliament, Dr. Kwabena Donkor, has criticized the excessive staffing and mismanagement of Ghana’s State-Owned Enterprises (SOEs), arguing that overpopulation in these institutions is crippling their efficiency and profitability.
Speaking on Morning Starr with Naa Dedei Tettey, Dr. Donkor lamented that many SOEs operate more as employment agencies rather than profit-driven entities, with little regard for financial sustainability.
“In business, if you are running a company, there must be a business case for every additional employee. What value is that employee bringing? How does that affect the bottom line? We don’t do that,” he said.
He cited GIHOC Distilleries as an example of an SOE that had prioritized job creation over financial viability, revealing that the company once presented an increase in staff numbers as an achievement rather than focusing on profitability.
“At a parliamentary committee hearing, GIHOC Distilleries proudly reported that they had increased employment by about 50%. I had to ask them if they were running the Youth Employment Agency (YEA), because in a commercial enterprise, jobs should only be created based on business needs, not for the sake of employment,” he stated.
Dr. Donkor stressed that many state enterprises struggle financially because of unchecked hiring practices and poor corporate governance. He argued that these institutions fail to adopt modern business strategies, allowing inefficiency to persist.
“There is a certainty of a huge monthly salary for executives, whether the company is making losses or not. That becomes a disincentive for hard work,” he explained, adding that salary structures in SOEs should be tied to performance rather than being guaranteed regardless of financial outcomes.
He also pointed out that Ghanaian SOEs lack the strict supervision that private companies operate under, which allows poor management decisions to go unchecked.
“The private sector thrives on efficiency and accountability. In contrast, our SOEs have weak leadership structures, little innovation, and a culture of entitlement that stifles productivity,” he remarked.
Reforming the SOE Sector
To address these challenges, Dr. Donkor called for a restructuring of SOEs, including:
• Implementing performance-based salaries for executives and management.
• Capping staff numbers to match operational needs.
• Strengthening corporate governance by ensuring boards and executives are appointed based on merit rather than political considerations.
• Providing mandatory training for board members before they assume office.
As Ghana navigates its economic challenges, the future of SOEs remains a crucial topic, with growing pressure on the government to adopt policies that will make them more efficient and profitable.
