Nigeria, others to address debt challenges via privatisation

Ministries of Finance from six African countries, namely Nigeria, Cameroon, Ethiopia, Ghana, South Africa and Zambia, have opted for privatisation options, enhanced governance frameworks and improved financial oversight to tackle the growing challenges of State-Owned Enterprise (SOE) debt in Africa.

The decision was taken at the just-concluded United Nations Economic Commission for Africa (ECA) high-level workshop that brought together finance policymakers, industry experts and international organisations to share best practices and develop strategic solutions for effective SOE debt management across the continent.

The workshop also had representatives from the UNDP, African Forum and Network on Debt and Development and major state-owned entities.

Highlighting the critical role SOEs play in driving national development, they acknowledged that while the entities had the potential to bolster economic growth and address market deficiencies, they also posed significant risks to government finances.

They said poorly managed SOEs could lead to severe financial burdens, potentially destabilising national budgets and contributing to the deterioration of sovereign credit ratings.

In her opening remarks, the Director, Macroeconomics, Finance and Governance Division (MFGD), ECA, Zuzana Schwidrowski, said in many African countries, SOEs played vital socio-economic role.

Chief of the Macroeconomic Analysis Section in MFGD, Lee Everts, stressed the need for a multifaceted approach to address the rising SOE debt.

The workshop, organised by ECA’s MFGD, was part of a broader series of capacity-building initiatives aimed at strengthening public debt management across Africa.