Ghana‘s government has started the process of selling to the private sector some loss-making state-owned enterprises (SOEs).

The Accra Mail reports the following companies are currently inactive and open for privatisation:

• Subri Industrial Plantation
• GIHOC Footwear
• Bonsa Tyre factory
• GIHOC Glass Company

The government, trough the Divestiture Implementation Committee (DIC), has opened a bidding process for the privatisation of the troubled firms. The deadline for the bidding process is 31 August 2010.

According to the DIC’s website, the programme “is intended to reduce the size of the public sector and improve the performance of SOEs by mobilising private sector management and capital. This will reduce the financial and managerial burden on government. The state will be able more efficiently to manage the business of government, using the proceeds from sale of SOEs to improve infrastructure, health service and education.”

Many SOEs have performed inadequately over the years. Factors which have contributed to this include:

• Over-staffing;
• Decision making at times being paralysed by excessive bureaucracy and a laissez-faire attitude towards state business
• The lack of technical expertise;
• The absence of the commitment and entrepreneurial direction that private investors bring to business; and
• Low incentives for management and inadequate working capital and investment in new plant and machinery, leading to low capacity utilisation.