Gov’t’s Joint Venture Companies Record Massive Turnaround as Profits Soar by 213% from a Loss in 2023

Ghana’s Joint Venture Companies (JVCs) with majority state interest have staged a very significant comeback in their financial performance, moving from heavy losses in 2023 to recording over GHS1.5 billion net profit in 2024.

This was reported by the 2024 State Ownership Report published by the State Interests and Governance Authority (SIGA), which revealed that the performance represents a massive 213.77% turnaround.

The report by SIGA, cited by The High Street Journal, explained that these JVCs rebounded strongly after posting a combined loss of GHS1.33 billion in 2023. Their total assets also expanded sharply by 39.86%, rising from GHS51.4 billion to nearly GHS72 billion within the year.

“The FY2024 performance of the JVCs (excluding the Minority Interest) recovered from the loss of GHS1,330.81 in FY2023 to record GHS1,514,06 million net profits, representing over 213.77 percent increase,” parts of the report read.

It added that, “The total assets of the JVCs at the end of FY2024 stood at GHS71,887.00 million against the GHS51,398.36 million reported in FY2023, a 39.86 percent growth.”

The government’s JVCs are companies with state interest above 10% but less than 100%. They cut across critical sectors of the economy. In transport, state-backed firms like Intercity STC and Metro Mass Transit fall under this category. In finance, Agricultural Development Bank (ADB), GCB Bank, SIC Insurance PLC, and National Investment Bank (NIB) represent some of the key players.

The agriculture sub-sector is represented by companies such as the Accra Abattoir, Kumasi Abattoir, Cocoa Processing Company, and Twifo Oil Palm Plantation.

Energy giant GOIL also remains one of the most visible JVCs with a majority state interest.

Analysts say the sharp turnaround is a major confidence booster for Ghana’s state-linked enterprises, many of which had been criticized for inefficiency and weak financial management.

The return to profitability demonstrates the potential of these companies to contribute significantly to the national purse if well-managed and supported with sound policies.

However, despite the strong performance of the JVCs with majority state interest, the report also shows a mixed picture. While JVCs with majority state ownership performed impressively, those with minority state interest, though recording record profits of GHS24.9 billion, saw their asset base shrink significantly by nearly 46% compared to the previous year.

“The Minority Interests JVCs surpassed the previous year’s performance, recording a massive net profit of GHS24,885.55 million in FY2024, compared to GHS1,639.68 million (without Newmont Ghana’s net profit) reported in FY2023. The total asset value, however, declined by 45.89 percent from GHS281,016.74 million posted by the Minority Interests JVCs in FY2023 to GHS152,064.45 million in FY2024,” the report indicated.

For the ordinary Ghanaian and the broader economy, this turnaround in profits has significant implications. Well-performing JVCs posting means the government’s revenue could be enhanced as these companies will pay dividends to the Ghanaian state.

In addition, the impressive performance means there could be opportunities for expansion through investments to create more jobs for the Ghanaian youth.

The report therefore, underscores that companies with state interest posses significant potential to grow and expand if the necessary restructuring, efficient management, and strategic investment are pursued.

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