Overview
The Revised State-Owned Enterprise (SOE) Policy (2024), issued by the Ministry of Finance and National Planning (MOFNP), provides Zambia’s updated framework for governance, ownership, and performance oversight of State-Owned Enterprises. It seeks to enhance efficiency, financial sustainability, and accountability in the management of SOEs, while aligning their operations with national development priorities and fiscal stability goalsRevised SOE Policy 2024.
The policy replaces the 2012 SOE Policy and integrates global corporate governance standards such as the OECD Guidelines on Corporate Governance of State-Owned Enterprises.
Rationale
Despite earlier reforms — including the establishment of the Industrial Development Corporation (IDC) in 2014 — most SOEs continue to face persistent challenges such as:
- High debt and liquidity constraints.
- Weak governance and fragmented institutional oversight.
- Poor financial reporting and low profitability (over 60% of SOEs reported losses in 2022).
- Limited accountability and non-compliance with audit and disclosure obligationsRevised SOE Policy 2024.
The policy aims to clarify state ownership roles, strengthen the legal and institutional framework, and introduce performance-based management systems for all SOEs.
Vision
Efficient and effective State-Owned Enterprises that maximise long-term value for society and the shareholder (the Government of Zambia).Revised SOE Policy 2024
Guiding Principles
The revised SOE Policy is built on seven guiding principles:
- Clear Rationale for State Ownership – The Government will justify and disclose the rationale for owning each SOE, focusing only on sectors where market failure exists or strategic national interests are served.
- Active State Ownership – The state will act as an informed and professional owner through a centralised oversight framework.
- Level Playing Field – SOEs will compete fairly with private entities under uniform legal and fiscal rules.
- Equitable Treatment of Shareholders and Investors – All shareholders, including minority and foreign ones, will have equal access to corporate information and participation rights.
- Transparency and Accountability – SOEs will adopt the same high auditing, disclosure, and reporting standards as listed companies.
- Professional and Independent Boards – Board appointments will be merit-based, gender-inclusive, and transparent.
- Sustainability – SOEs will integrate Environmental, Social, and Governance (ESG) principles, especially in response to climate change and sustainable resource managementRevised SOE Policy 2024.
Key Objectives and Measures
The policy outlines five key objectives supported by specific measures:
1. Strengthen Corporate Governance:
- Develop a Corporate Governance Code for SOEs aligned with international best practices.
- Establish a disclosure and reporting framework.
- Build capacity among SOE boards and executives.
2. Strengthen the Role of the Ministry of Finance:
- Operationalize the Supervisory and Performance Monitoring Framework for SOEs.
- Develop an SOE Ownership Strategy and publish annual performance reports.
3. Enhance Fiscal Performance and Sustainability:
- Promote strategic equity partnerships with the private sector.
- Develop a financial oversight and fiscal risk framework.
- Implement a debt dismantling strategy and enforce commercial management standards to reduce reliance on subsidiesRevised SOE Policy 2024.
4. Strengthen Legal and Regulatory Framework:
- Enact a single comprehensive SOE law covering governance, ownership, transparency, and investor protection.
- Update existing laws, including the Minister of Finance (Incorporation) Act, Public Finance Management Act, and Public Procurement Act.
5. Promote ESG Compliance:
- Mainstream environmental and social standards across all SOE operations.
- Monitor adherence through MOFNP and line ministries.
Implementation Framework
The policy introduces a centralised governance structure for SOEs:
- Ministry of Finance and National Planning (MOFNP): Sole shareholder and oversight authority responsible for ownership strategy, performance monitoring, and reporting.
- Ministry of Justice: Legal harmonisation and review of SOE-related legislation.
- Line Ministries: Sector regulation and technical oversight.
- Holding Companies (e.g., IDC): Accountable for consolidated reporting and financial performance of subsidiaries.
- Oversight Institutions (National Assembly, Auditor General): Ensure transparency and accountability.
- Regulatory Bodies (BoZ, SEC, LuSE, CCPC, PIA, PACRA): Maintain fair market competition and compliance.
- Non-State Actors (Private Sector, CSOs, FBOs): Contribute to policy dialogue and monitoringRevised SOE Policy 2024.
Legal Reforms
The forthcoming SOE Act will define ownership structures, corporate responsibilities, transparency standards, shareholder rights, dividend policies, remuneration frameworks, and competitive neutrality. It will harmonise overlapping statutes currently governing SOEs, ensuring consistency with laws such as the Public Debt Management Act (2022) and Emoluments Commission Act (2022)Revised SOE Policy 2024.
Monitoring, Financing, and Review
Implementation will be financed through government budget allocations and development partner support.
Monitoring and evaluation will be led by the MOFNP, with mid-term (3-year) and final (5-year) policy reviews to assess progress and impactRevised SOE Policy 2024.
Conclusion
The 2024 SOE Policy marks a decisive shift toward modern, transparent, and accountable state ownership, ensuring that SOEs contribute effectively to Zambia’s fiscal stability, industrial growth, and sustainable development. By embedding ESG principles, corporate governance, and fiscal oversight, the policy aims to transform SOEs from fiscal burdens into engines of national growth.
Citation
Republic of Zambia (2024). Revised State-Owned Enterprise Policy. Ministry of Finance and National Planning, Lusaka.
