The Controller and Accountant Generals’ Department (CAGD) failed to track and capture in its accounting books government’s equity investments totalling GH¢1.822billion, the 2013 Auditor General’s report has shown.
The report indicated, for instance, that government’s 51 percent share in Ghana International Bank Plc London has not been disclosed in the public accounts and no follow-up made on dividend, while the 100 percent stake in Ayensu Starch Company was not also disclosed in the public accounts.
Again, government’s 100 percent stake in Valco and PSC Tema Shipyard have not been disclosed. Moreover, a bonus offer of 5:1 shares on the 51 percent shares in Goil company: a loan balance of US$2million due from Goil also converted into shares via a Ministry of Energy and Petroleum authorising letter dated December 2013 was not reported in the public accounts.
The Auditor General therefore advised that in order to safeguard GoG equity investments and ensure their completeness in the Public Accounts, the CAGD should collaborate with the various ministries and develop a mechanism through which GoG equity investments as well as the returns on them will be advised appropriately and accounted for.
At a sitting of the Public Accounts Committee (PAC) of parliament last week, Deputy Finance Minister Ato Forson stated that a new proposal has been put together for consideration by Cabinet for the establishment of a state-owned entity that will track investments of companies that government has a stake in. This, he said, will make it easier to monitor the returns on state funds used by partly or fully owned government institutions.
“We will look at the governance structure and possibly recommend a fiscal trust by which we will have one institution managing the entire investment for us to have up to date and real-time information to feed the Controller,” he said.Reacting to questions from PAC members, Mr. Forson absolved the Controller and Accountant General of any blame, maintaining that it can only act on information it is given.
“The Ministry of Finance has started an equity study into government’s investments. In some cases you have a state institution owning shares in another company. Most often, impressions are created that it belongs to government direct, but they are subsidiaries of state institutions,” he explained.
A typical example, according to the Deputy Minister, is GNPC owning part of Airtel — and explained thus: “The impression is being created that the government of Ghana owns part of Airtel, but actually we own part of Airtel through GNPC. So in accounting the Controller cannot account for that accordingly, as it will only rely on GNPC to collect dividend due and obviously pay it back to state.”
Another example, he said, is the National Investment Bank (NIB) in which government of Ghana owns shares:
“NIB owns shares in Nestle — a very good percentage. It also own shares in Total, but it is not state of Ghana or government of Ghana owning those shares; so that is the main reason we at the Finance Ministry think we have to conduct an equity study to look at the investment data and report on it accordingly”.