In a concerted effort to address the escalating debt challenges faced by State-Owned Enterprises (SOEs) in Africa, the United Nations Economic Commission for Africa (ECA) organized a high-level workshop in Pretoria from August 21 to 23, 2024.
This gathering brought together finance policymakers, industry experts, and international organizations to exchange best practices and develop strategic solutions for effective SOE debt management across the continent.
The workshop saw participation from officials representing the Ministries of Finance from Cameroon, Ethiopia, Ghana, Nigeria, South Africa, and Zambia. Also in attendance were representatives from the United Nations Development Programme (UNDP), the African Forum and Network on Debt and Development, and key state-owned enterprises.
Discussions focused on enhancing governance frameworks, improving financial oversight, and exploring privatization as a potential strategy for debt relief.
Participants acknowledged the vital role that SOEs play in driving national development. However, they also recognized that these entities pose significant risks to government finances if mismanaged.
The workshop highlighted the fact that poorly governed SOEs can become substantial financial liabilities, endangering national budgets and potentially leading to downgrades in sovereign credit ratings.
“In many African countries, SOEs are crucial to socio-economic progress. This workshop is particularly timely given the pressures on both SOE and government finances, exacerbated by ongoing crises and multiple shocks,” stated Zuzana Schwidrowski, Director of the Macroeconomics, Finance, and Governance Division (MFGD) at ECA, during her opening remarks.
Ms. Schwidrowski further emphasized that “financial difficulties within SOEs often lead to the deterioration of critical public services, creating a downward spiral of weakened service delivery and stunted economic growth.”
She highlighted that this capacity-building workshop was organized by ECA to develop practical solutions tailored to Africa’s unique challenges.
The event underscored the importance of strong corporate governance, effective risk management, and rigorous internal oversight as key elements of SOE reform.
Participants shared successful strategies for managing SOE debt and identified key challenges, including those related to fulfilling mandates and the complex relationship between sovereign and SOE credit ratings.
Lee Everts, Chief of the Macroeconomic Analysis Section in MFGD, stressed the need for a comprehensive approach to tackling rising SOE debt.
“Financial restructuring, governance enhancements, operational improvements, and, in some cases, privatization or asset sales, are critical steps to mitigate the risks associated with SOE debt,” she said.
This workshop, organized by ECA’s Macroeconomics, Finance, and Governance Division in collaboration with its Sub-Regional Office for Southern Africa, is part of a broader series of capacity-building initiatives aimed at strengthening public debt management across Africa.
ECA remains committed to supporting African nations in implementing innovative and robust solutions to the persistent challenges posed by SOE debt and related government liabilities.
Established in 1958 by the United Nations Economic and Social Council (ECOSOC), the United Nations Economic Commission for Africa (ECA) is one of the UN’s five regional commissions.
ECA’s mandate is to promote the economic and social development of its Member States, foster intraregional integration, and advance international cooperation for Africa’s development. Comprising 54 Member States, ECA serves as a regional arm of the UN and a key institution within the African landscape.
