Factors Influencing the Performance of State-Owned Enterprises in Ghana: The Case of Electricity Company of Ghana and Ghana Buffer Stock Company Ltd

Abstract

State-Owned Enterprises (SOEs) in Ghana have played a key role in national development, yet their performance has been inconsistent. Initially established to drive industrialization and provide essential services, many SOEs became financially unsustainable by the 1980s. Despite ongoing reforms to enhance governance and financial management, many SOEs still face low productivity, financial mismanagement, and weak governance. Additionally, governance reforms in Ghana, including performance contracts, have not been adequately assessed for effectiveness. To bridge these gaps, this study applies Agency Theory to analyze governance challenges and performance drivers in Ghanaian SOEs. The study sample 20 respondents from the Electricity Company of Ghana and Ghana Buffer Stock Company Ltd. From the data analysis the study revealed that looking at the historical analysis of the performance of the SOEs there is an improvement in the governance and management structures of the SOEs. There has also been technological adoption and modernization and a balanced social mandate with commercial viability among the SOEs. However, political interference and governance still remains as a key challenge to SOEs in Ghana. Further, in assessing the factors that affect the economic performance of the SOEs, the study revealed that regulation environment, financial management and market dynamics, human capital and operational efficiency, transparency, accountability, and anti-corruption measures were the key factors affecting the economic performance of SOEs in Ghana. Subsequently, looking at the regulatory frameworks in enhancing the governance performance of the SOEs, some of the participants of the study highlighted that role clarification and reduction of bureaucratic overlap, accountability and performance-based incentives, adaptability to technological and market changes, and need for continuous capacity building are some of the regulatory frameworks that would help enhance the governance performance of the SOEs in Ghana. Based on these findings the study was able to make some recommendations that will help improve the general performance of SOEs in Ghana.