Tunisia/IMF - Govt to Create Public Shareholding Agency to Improve State Enterprises' Management

Tunis/Tunisia — The improvement of state enterprises' management through the revision of the portfolio of state holdings and the creation of a public shareholding agency is among the Tunisian government's commitments in the document on the reforms to be undertaken under the additional programme with the International Monetary Fund (IMF).

This document was mainly prepared by teams from the Prime Ministry, the Ministry of Economy, Finance and Investment Promotion and the Central Bank of Tunisia (BCT).

In this document, the government acknowledges that the growing fragility of public enterprises reflected in a high debt level constitutes a vulnerability that can affect budgetary balances, the quality of public services and the solidity of the national financial system.

The State thus undertook to clarify the missions of these enterprises, improve their governance, tighten the control and regulation of their performance, revise their business models and clean up their financial structure.

The adopted approach aims "to ensure total transparency towards the social and international partners regarding the situation of the concerned enterprises," on the one hand, and "to set an objective of restoring the balance of public enterprises, as a whole by 2024 while ensuring a quality service, increased control and modernised governance, on the other."

The first reform axis revolves around setting up a new legal framework of Governance and Control through the modification of law 89-9, pursuing the revision of the composition of the Boards of Directors and creating a public shareholding agency with the reinforcement of teams specialised in the management of shareholdings and support for the conversion of enterprises.

This will help strengthen the State's shareholder role by establishing a centralised control agency for State holdings and by improving the performance contracts of public enterprises and the monitoring of their implementation.

A shareholding agency would contribute to streamlining procedures (trusteeship), enhancing budgetary monitoring (especially staffing) and better managing the State's shareholding portfolio by integrating strategic issues and international best practices.

The second reform axis consists in evaluating and adjusting the enterprises' economic models and business plans through the selection of priority enterprises and sectors requiring operational and financial restructuring, the redefinition of the enterprises' economic model, on a case-by-case basis, the conception of measures allowing for a better operational and financial productivity, the introduction of cost saving measures, etc.

The third axis involves the restructuring of the balance sheets of public enterprises, by clearing up cross-arrears and cascading debts, restructuring overdue debts, recapitalising enterprises through the Public Enterprise Restructuring Fund (FREP) and defining its funding sources.

Besides, a study on the evolution of the State role, the disengagement sectors, the new investment sectors and the scope of the State shareholder will be conducted with a mapping of the public enterprises and their competitive and strategic environment.

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