This chapter analyses the governance frameworks for state-owned enterprises in selected African countries. It draws on the OECD Guidelines on Corporate Governance of State-Owned Enterprises, particularly regarding the rationales for state ownership and the state’s role as an owner. The recommendations on these issues are essential to lay the foundation for effective state ownership policies, which in turn are necessary to foster the development of capital markets. Key recommendations include clear and transparent grounds for state ownership of listed companies, effective separation of ownership from policymaking and regulatory functions, and professional and active state ownership.
Africa Capital Markets Report 2025
Abstract
The significance of SOEs in Africa underscores the need for strong state ownership frameworks: Among the 100 largest African companies by turnover, 44 are state-owned or controlled, including the top 5, and they operate in key sectors such as mining, energy, and telecommunications.
The OECD Guidelines on Corporate Governance of SOEs (the SOE Guidelines) provide advice to governments in this area. They stress the need to transparently state the rationales for state ownership and establishing clear ownership policies ensuring accountability, public trust and effective governance. Without those foundations, other aspects such as board independence, disclosure, accountability, and protection of minority shareholders are likely to remain fragmented and unsuccessful.
Several African countries have established legal frameworks for state ownership, with different characteristics and goals, and some recent reforms have aimed at updating governance standards for SOEs.
However, in many cases, there is an uneven articulation of ownership rationales and policies; only a few countries have comprehensive ownership frameworks, while others rely on fragmented or sector-specific mandates.
When implemented with integrity, accountability, and clear safeguards against undue influence, centralised or co-ordinated state ownership can facilitate the separation of ownership, regulatory and policymaking responsibilities, enabling professional and active state ownership. Yet, the predominant ownership model among African countries is dispersed ownership, where multiple ministries and agencies oversee SOEs with seemingly limited co-ordination. This often results in fragmented oversight, inconsistent governance practices, and weak strategic alignment.
Stronger ownership arrangements, reinforced by high levels of integrity and accountability can spur improved SOEs governance which in turn can help SOEs access capital markets, and lead to further transparency, financial discipline, and investor confidence.
Effective state ownership and corporate governance frameworks are an essential foundation for the contribution of state-owned enterprises (SOEs) to capital market development. By listing SOEs on stock exchanges, governments can not only improve SOE performance but also strengthen capital markets by attracting private investment and expanding investment options, thus contributing to depth and liquidity in markets. Strong governance standards help to enhance disclosure and foster equitable treatment of all shareholders. This is particularly relevant in Africa, where equity markets remain small and illiquid: between 2000 and 2024, African companies raised only USD 201.9 billion in public equity markets—just 1% of the global total (see Chapter 2).
Beyond equity, SOEs are also important issuers of corporate bonds, with the potential to diversify available instruments and increase the attractiveness of domestic markets to foreign and institutional investors. Yet corporate debt markets in Africa are still at an early stage of development, with outstanding corporate debt below 15% of GDP in nearly all of the 15 countries analysed in Chapter 3 (compared to 52% globally). Just four countries account for 61% of the continent’s corporate debt stock.
SOEs’ economic importance makes their governance critical. Forty-four of the 100 largest companies in Africa by turnover are state-owned or controlled, including the top 5. They dominate strategic sectors such as extractives, energy, finance, transport, telecoms and utilities. However, many African SOEs face persistent weaknesses: poor financial performance, high debt, undue political influence and lack of transparency. For example, 40% of about 300 SOEs in Sub-Saharan Africa were loss-making in 2017-2018 while the larger firms tended to be illiquid and overleveraged (Wezel and Carvalho, 2022[1]). Governance failures, such as weak internal controls, opacity, nepotism, political interference and conflicting objectives are widely observed (Mutize and Tefera, 2020[2]). These challenges directly undermine SOEs’ credibility as market participants and limit their potential to support capital market development.
The effectiveness of ownership and governance frameworks is therefore of central importance. The OECD Guidelines on Corporate Governance of State-Owned Enterprises (the SOE Guidelines) are the leading international standard in this area. Chapters I and II of the Guidelines, on the rationales for state ownership and the role of the state as an owner, are particularly relevant. They establish the conceptual and institutional foundations for SOE governance by clarifying why the state owns enterprises, what objectives it pursues, and how ownership responsibilities are organised. Absent a clear ownership framework and well-defined objectives, efforts to strengthen other aspects of SOE governance (such as board independence, disclosure, accountability, and protection of minority shareholders) are likely to remain fragmented and unsuccessful.
Sound corporate governance is therefore a necessary condition for capital market development through SOE listings and debt issuance, but it is not on its own sufficient. Strong governance frameworks provide the basis for reforms that directly influence investor confidence—such as professionalised boards, credible financial disclosure, and reduced political interference. Without them, SOE listings and bond issuance may create only short-lived market activity rather than contributing to sustained capital market deepening.
At the same time, complementary factors are equally relevant. Unless accompanied by broader reforms such as strengthening property rights, fighting corruption, building institutional competence, and ensuring effective capital markets infrastructure, listing SOEs may not see its full potential. An important requirement of SOE listings in Africa is the need for sufficient financial market infrastructure to manage large transaction volumes, accurately assessing investor demand and listing under appropriate market conditions —for example, in environments of macroeconomic stability and growth (The World Bank, 2021[3]).
This report addresses many of those wider reforms. Chapter 2 focuses on public equity markets and wider corporate governance frameworks in Africa. On the public equity markets side, key messages include broadening issuer participation (including through SOE listings) and greater regional integration through, for example, cross-border listings. The chapter also advocates for increasing competition among brokers and simplifying fee structures to reduce trading costs, and attracting institutional investors, including through pension reforms. In parallel, key corporate governance recommendations include strengthening minority shareholders rights, reinforcing accountability and transparency, greater board independence and improved disclosure of board compositions, as well as effective supervision and regulatory enforcement.
The findings of Chapter 3 are equally relevant in view of the potential role of SOEs in fostering the development of corporate debt markets in Africa. Key priorities include promoting the issuance of debt in local currencies to reduce reliance on foreign-currency borrowing; broadening the base of domestic institutional investors, particularly pension funds; aligning disclosure requirements with international standards to enable more robust risk assessment and provide clearer incentives for investment; and strengthening as well as integrating market infrastructure to support more efficient and resilient debt markets.
This chapter zooms in on the topic of SOE governance. In line with the rest of the report, the analysis concentrates on selected middle-income African countries, which are expected to display a certain level of economic, institutional and capital market development. This focus not only facilitates more meaningful insights into SOE governance practices but also provides a degree of homogeneity and comparability across the cases considered.
The remainder of this chapter is organised as follows: Section 6.2 opens with an overview of the landscape and weight of SOEs in selected middle-income African countries. Section 6.3 reviews key legal dispositions governing SOEs, including framework laws driving state ownership reforms such as privatisation. It then focuses on the existence or absence of comprehensive SOE policies, as such policies are important to define the overall rationales and goals for state ownership, set out government priorities, and the respective roles and responsibilities of those government offices involved in their implementation. Later, the chapter focuses on state ownership models, and their characteristics. Section 6.4 provides key messages and recommendations.
The OECD SOE Guidelines define a state-owned enterprise as any undertaking recognised by national law as an enterprise and in which the state exercises ownership or control, whether through a majority shareholding or other means of influence such as special voting rights, board representation or other arrangements that would confer decisive influence. SOEs can take the form of joint stock companies, limited liability companies and partnerships limited by shares, as well as statutory corporations established through specific legislation if their purpose and activities, or large parts of their activities, are of an economic nature (OECD, 2024[4]). Those forms have important implications for SOE listings (see section 6.3.1).
In practice, however, applying this definition to analyse the importance of SOE sectors across countries presents methodological challenges. Determining whether the state exercises control over a company often requires case-by-case assessments of ownership structures, voting rights, board representation, and other arrangements —information that is not systematically available across countries. Furthermore, providing a full and complete estimation of the SOE landscape in Africa is challenging, given the scarcity of comparable, complete and reliable data. Cross-country assessments are rare, and country coverage varies greatly.
For the purposes of cross-country analysis, this section therefore relies on a proxy measure: enterprises in which the state1 holds at least 25% of ultimate ownership in selected African countries. This threshold represents a pragmatic balance. A higher threshold of 50% or more would exclude many enterprises where the state may exercise significant influence without majority ownership, while a lower threshold of 10% could capture a large number of firms in which the state’s influence may be negligible.2 The 25% cut-off thus provides a reasonable approximation, while recognising that it may not capture all enterprises that would qualify as SOEs under the SOE Guidelines, nor exclude all enterprises where the state’s role is limited. The section also relies on information of the largest 500 companies in Africa by turnover.3
The analysis suggests that there are 5 869 SOEs operating in middle-income African countries, with South Africa accounting for 60% of those enterprises, followed by Egypt with 11% and Algeria with 6% (Table 6.1).4 Furthermore, according to The Africa Report’s 2024 ranking of the largest enterprises by turnover, 44 of the top 100 enterprises in Africa are SOEs (The Africa Report, 2024[5]). They are largely based in South Africa, although Egypt, Nigeria and Algeria also host important shares (Figure 6.1). Collectively, these 44 SOEs generated a total turnover of USD 300.5 billion in 2023, exceeding the combined turnover of the 56 privately owned enterprises in the same ranking.
Number of enterprises, 2023
Note: SOEs are identified by applying a multi-stage filtering method, where companies in which state entities such as central and local governments, ministries, specialised agencies, and other state-owned enterprises hold at least 25% total ultimate ownership.
Source: Bureau van Dijk, (2024[6]), Orbis Database
Number of enterprises, 2023
Note: DRC = Democratic Republic of Congo. The ranking of Africa’s top 100 companies by turnover is based on data from The Africa Report. SOEs were identified using a multi-stage filtering process applied to Orbis company data, focusing on firms where central and local government entities, such as ministries, specialised agencies, or other SOEs, hold at least 25% total ultimate ownership. In cases where Orbis data was unavailable, ownership information was obtained from annual reports and other secondary sources to determine the shareholding structure.
Source: Bureau van Dijk, (2024[6]), Orbis Database; The Africa Report (2024[7]), Africa’s Top 500 Companies, https://www.theafricareport.com/in-depth/africas-top-500-companies
Among the top 44 SOEs by turnover, 23% operate in mining, 20% in energy, and 16% in telecommunications (Figure 6.2). While large private enterprises are also present in mining and energy, state ownership is more prevalent in these sectors. In contrast, privately-owned African companies tend to be active across a broader range of sectors, including automotive, healthcare, media and metals.
The mining and energy sectors are the most prominent by turnover (Figure 6.3). Oil, gas, and mining firms account for over 59% of the total turnover generated by the 44 SOEs in the top 100 African enterprises. This is largely driven by Algeria’s energy giant, Sonatrach, the continent’s largest company and SOE representing 14.7% of the total turnover of the top 100 African companies. In addition, SOEs play a dominant role in the telecoms sector.
The 5 largest of the top 100 African enterprises by turnover are either fully state-owned or controlled. Four out of the five are national oil enterprises, and only one, SASOL, a global chemicals and energy company, is publicly traded on both the Johannesburg (JSE) and New York Stock Exchanges (NYSE) with the South African government as a significant shareholder (Table 6.2).5
2023
Note: The ranking of Africa’s top 100 companies by turnover is based on data from The Africa Report. SOEs were identified using a multi-stage filtering process applied to Orbis company data, focusing on firms where government entities, such as ministries, specialised agencies, or other SOEs, hold at least 25% total ultimate ownership. In cases where Orbis data was unavailable, ownership information was obtained from annual reports and other secondary sources to determine the shareholding structure.
Source: Bureau van Dijk, (2024[6]), Orbis Database; The Africa Report (2024[7]), Africa’s Top 500 Companies, https://www.theafricareport.com/in-depth/africas-top-500-companies/
2023, USD billion
Note: The ranking of Africa’s top 100 companies by turnover is based on data from The Africa Report. SOEs were identified using a multi-stage filtering process applied to Orbis company data, focusing on firms where government entities, such as ministries, specialised agencies, or other SOEs, hold at least 25% global ultimate ownership. In cases where Orbis data was unavailable, ownership information was obtained from annual reports and other secondary sources to determine the shareholding structure.
Source: Bureau van Dijk, (2024[6]), Orbis Database; The Africa Report (2024[7]), Africa’s Top 500 Companies, https://www.theafricareport.com/in-depth/africas-top-500-companies/
By turnover
Note: The ranking of Africa’s top 100 companies by turnover is based on data from The Africa Report. SOEs were identified using a multi-stage filtering process applied to Orbis company data, focusing on firms where central and local government entities, such as ministries, specialised agencies, or other SOEs hold at least 25% total ultimate ownership. In cases where Orbis data was unavailable, ownership information was obtained from annual reports and other secondary sources to determine the shareholding structure.
Source: Bureau van Dijk, (2024[6]), Orbis Database; The Africa Report (2024[7]), Africa’s Top 500 Companies, https://www.theafricareport.com/in-depth/africas-top-500-companies/
This analysis provides a glimpse of the scale and strategic importance of SOEs in Africa. It shows that SOEs are amongst the largest African companies and operate in strategic sectors. However, very few of these large SOEs are using capital markets despite their size and economic importance, as shown by the fact that only one of the five largest SOEs is publicly traded. Furthermore, Chapter 2 notes that by the end of 2024, there were 122 listed SOEs in Africa, representing 5% of the number of SOEs listed globally and 7% of those listed in emerging markets, and just 2% of the 5 869 SOEs identified in this chapter. In terms of market capitalisation, those 122 listed African SOEs account for only 0.6% of the global value and 0.8% of that of emerging market listed SOEs (see Figure 2.6). This contrasts with the experience of SOEs and capital market development in Asia, as 70% of listed SOEs worldwide trade on Asian exchanges, representing 26% of Asia’s total market capitalisation and far above the 5% seen in other regions (OECD, 2025[8]).
The OECD SOE Guidelines provide guidance to assess and improve legal, regulatory and institutional foundations of state ownership by promoting professional and transparent ownership practices, fair competition, equal treatment of investors, disclosure, transparency and accountability, effective SOE boards of directors, and sustainability in state ownership. The following sections build on Chapters I and II of the SOE Guidelines, and reviews publicly available information for selected African countries. It examines key legal frameworks governing SOEs, the existence or absence of comprehensive SOE ownership policies, and institutional arrangements for SOE ownership and oversight. These elements are essential for effective state ownership, which in turn is critical for supporting capital market development.
6.3.1. SOE legal frameworks
Many countries have adopted overarching SOE legal frameworks that define the role of the state as an owner, clarify institutional arrangements and set out governance requirements for SOEs. These frameworks often set out harmonised standards on issues such as board composition, disclosure obligations, performance monitoring and accountability. Importantly, such frameworks can help to regulate a critical state function (the exercise of ownership rights on behalf of citizens) much like dedicated legal frameworks govern other state functions such as public procurement or financial management.
The necessity of a dedicated SOE legal framework is particularly important in contexts where SOEs fall outside the scope of company law. In many countries (including across Africa) SOEs are established by special laws or statutes rather than being incorporated under general company law provisions, which has implications for the role of SOEs in the development of capital markets (see Box 6.1). Where SOEs operate outside company law, a dedicated legal framework becomes essential as it provides the governance and accountability standards that company law would normally impose, ensuring that SOEs are subject to clear rules and governance arrangements. Without such a framework, governance arrangements risk being fragmented, inconsistent, or subject to political discretion, which can undermine both transparency and investor confidence. Even where SOEs are incorporated as joint-stock or limited liability companies and are therefore subject to company law, dedicated SOE frameworks remain important to address the specificities of state ownership—such as clarifying ownership co-ordination mechanisms, balancing commercial and policy objectives, and ensuring appropriate accountability.
SOEs operate under various legal forms, each with distinct implications for governance and capital markets access. Joint-stock companies (JSCs) are generally the only form suitable for equity listings, as they allow for tradable shares and shareholder rights. Limited liability companies (LLCs) may issue bonds but face constraints on public equity offerings. Statutory corporations typically cannot access equity or bond markets directly and often require corporatisation before being listed — a process that can be politically sensitive and resource intensive, as it involves restructuring governance arrangements, establishing appropriate valuations and clarifying ownership rights.
For example, in Francophone Africa, this distinction is particularly relevant for public establishments organised as établissements publics à caractère industriel et commercial (EPIC) or établissements publics à caractère administratif (EPA), whose legal characteristics are closer to statutory bodies than companies. These forms provide flexibility for states to pursue public policy objectives but limit direct capital markets access, raising the question of corporatisation for SOEs that aim to attract investors.
Reforms in several countries, including in Africa, illustrate the growing recognition of the utility of specific SOE legal frameworks. While the SOE Guidelines do not prescribe a specific legal model, they encourage governments to adopt simplified and standardised legal frameworks that ensure SOEs follow clear and predictable principles. These can be further complemented by state ownership policies that articulate the rationale for state ownership and set national reform priorities. In some jurisdictions the ownership policy and legal framework are combined into a single instrument, helping to strengthen coherence and clarity in the state’s role as an owner (OECD, 2024[4]).
African countries have taken diverse approaches to legal frameworks for state ownership, reflecting varying priorities and historical contexts. These frameworks pursue various goals, including increasing the commercial orientation of SOEs, promoting private sector development, including through privatisation, and strengthening governance and institutional arrangements for state ownership (Table 6.3). Some of the earliest reforms dating back to the 1980s and 1990s were introduced in Algeria and Egypt, for example, to shift SOEs away from centrally planned management towards commercially oriented entities. In a few cases, this also led to privatisation which has had varying degrees of success across the continent as SOEs continue to play an important role in most African economies even decades after those initial laws were enacted.
In recent years, several other countries have introduced more comprehensive reforms that combine institutional and legal reforms. Some have established or empowered centralised or co-ordinated ownership arrangements, reflecting a broader regional trend towards professionalising state ownership (see Table 6.5). By adopting a reformed legal framework together with a centralised or co-ordinated framework, many countries have sought to address fragmentation across their SOE portfolios and ensure better oversight, management, and performance monitoring. For example, Morocco has recently aimed to transform commercially oriented SOEs operating as statutory corporations into incorporated legal forms with the goal to increase their efficiency and exposure to market forces. Morocco’s new law has also created a centralised agency tasked with managing state holdings, establishing performance contracts, and formalising governance standards. Along those lines, South Africa is considering a bill for the creation of a centralised holding company to consolidate ownership of SOEs.
Other countries, such as Côte d’Ivoire, Ghana, Kenya, Namibia, Seychelles, Tanzania, Tunisia, Uganda and Zimbabwe have enacted legal frameworks that define governance structures in terms of, among others, state representation and institutional responsibilities, functioning and composition of boards, performance frameworks, financial reporting. These frameworks focus on improving oversight, accountability, and transparency.
Together, these approaches illustrate the spectrum of legal and institutional reforms underway across the continent, ranging from legacy laws of past decades to more recent, strategic overhaul of institutional arrangements that move towards more professional and co-ordinated ownership. Regardless of the ownership model, many African countries are working to codify the state’s role as an owner and to provide greater consistency and clarity to markets and stakeholders.
Broad characteristics of laws relevant to state ownership in selected countries
Note: Table 2.2 provides an overview of African corporate governance legal and regulatory frameworks.
6.3.2. Ownership rationales and policies
Clearly articulated ownership rationales are a foundational element of sound SOE governance. They provide the basis for determining which enterprises should be under state ownership, guide decisions on resource allocation and investment priorities, and establish the criteria against which SOE performance should be evaluated. Without clear rationales, SOEs risk operating without defined purpose, making it difficult to hold them accountable or assess whether state ownership continues to serve the public interest.
Ownership rationales vary across countries and sectors. These include social, economic, and strategic objectives—such as providing public goods, addressing market failures, supporting national development goals, or managing natural monopolies. In times of crisis, like financial downturns or the Covid-19 pandemic, some governments have also acquired stakes in distressed firms to preserve jobs or financial stability, often with a view to divest once conditions stabilise. Furthermore, privatisation is relevant when the original justification for state ownership no longer holds. (OECD, 2024[12]).
In Africa, an interesting trend is the use of sectoral versus economy-wide rationales where rationales are clearly defined (Table 6.4). Economy-wide rationales involve traditional state functions such as correcting market failures or providing public goods whereas sectoral rationales refer to the development of specific sectors or achieving specific development objectives. Across selected African economies rationales vary but share some common features.
Correcting market failures and provision of public goods. For example, Côte d’Ivoire, Egypt, Ghana, Kenya, Mauritius, and Namibia refer to providing goods and services not or insufficiently provided by private sector companies.
Strategic and development policy objectives. For example, Egypt, Ghana, Kenya, Morocco and Namibia refer to strategic sectors, industries or assets among the justifications for state ownership.
Broad development agendas. Mauritius, Morocco and Namibia take wider approaches with their rationales addressing continental integration, stimulation of investment and competitiveness, together with more typical rationales such as national sovereignty and balanced territorial development.
Implicit or sector specific rationales. Algeria, Botswana, South Africa, Tunisia and Zambia have sector-specific rationales embedded in the mandates of individual SOEs.
From an investor perspective, the articulation of ownership rationales at the individual enterprise level is particularly critical for capital market development. Investors (whether potential equity shareholders or bondholders) need to understand why the state maintains ownership of a specific enterprise and what objectives it is expected to pursue. This clarity helps investors, for example, to assess the enterprise's strategic direction and evaluate potential conflicts between purely commercial and other policy objectives tasked to the SOE. Transparent, enterprise-level rationales thus reduce information asymmetry, making SOEs more attractive investment propositions and facilitating their access to capital markets—whether through equity listings, bond issuances, or private capital partnerships. For example, in the case of Sonatrach, the largest SOE in the region and fully owned by the Algerian government, the objective is to mobilise all its resources to ensure Algeria’s energy security and satisfy the local hydrocarbon market (Sonatrach, 2025[13]).
Balancing economic and public interests presents unique governance challenges for SOEs, including risks of undue political interference, weak accountability, and agency problems—especially as citizens, unlike shareholders, cannot divest from underperforming or mismanaged entities. Clear and transparent ownership policies are therefore essential to define the objectives of state ownership, establish effective governance structures, and ensure accountability and public trust. An OECD report finds that half of the jurisdictions surveyed have established an overarching state ownership policy, although some countries, including in Africa, have implemented such reforms over the past year (OECD, 2024[12]).
An ownership policy is a high-level framework that sets out the state’s rationales and objectives for owning SOEs. It can take the form of a single comprehensive document or be articulated across multiple sources. However, a single, concise, and high-level ownership policy offers clear advantages over fragmented approaches. When policies are scattered across sectoral policies, national plans, or statutory laws, this often leads to overlapping or conflicting objectives, unclear lines of accountability, and greater scope for undue intervention, ultimately undermining transparency, coherence, and effectiveness in SOE governance (OECD, Forthcoming[14]). Table 6.4 provides an overview of state ownership rationales and policies across selected African countries. Some common approaches include:
Comprehensive ownership policies. Egypt, Ghana, Kenya, Morocco, Namibia, and Zambia have adopted formal policy documents that define the state’s role as shareholder, set performance expectations, and outline governance responsibilities. These policies often reference the OECD SOE Guidelines and have been developed within the past two to three years. Their emergence signals a growing recognition of the need to professionalise state ownership, increase transparency, and depoliticise enterprise management.
Partial or guidance-based policies. Mauritius relies on guidance notes within its corporate governance framework. Côte d’Ivoire provides reference texts via the Directorate General of the State Portfolio. These documents clarify some governance rules but fall short of policy frameworks.
Sectorial or ad hoc approaches. Other countries have no single policy document guiding state ownership and have instead a patchwork of sectoral laws or governance frameworks. This fragmented approach can make it challenging to achieve coherence in ownership oversight and can complicate accountability, especially where ownership is dispersed across ministries or governmental authorities.
Clear ownership rationales and comprehensive, coherent state ownership policies can support the development of capital markets in Africa by enhancing transparency, predictability, and investor confidence. When governments clearly articulate why they own certain enterprises—whether to address market failures, provide public goods, or relate to strategic national priorities—it helps reduce uncertainty about the future role of the state in the economy. This is particularly important for potential investors considering participation in markets where SOEs operate or are partially listed. Coherent ownership policies that establish the state’s role as a professional and accountable owner can also help depoliticise SOE governance, improve corporate performance, and create conditions conducive to partial privatisations, including through public listings. However, as emphasised before, clear and transparent state ownership rationales and policies are a necessary but not sufficient condition for capital market development. Other structural policies include strengthening competition frameworks and ensuring competitive neutrality between SOEs and private firms, as well as other reforms related to capital markets addressed in the rest of this report.
Ownership policies or elements of ownership policies in selected countries
Note: A rationale is considered explicit when it is clearly stated in one official source such as a high-level policy document or the ownership law. A rationale is implicit when is not expressed in an official source, but it can be derived from various sources including company and public administration law, sector laws, SOE statutory laws, etc.
6.3.3. Ownership arrangements
The OECD SOE Guidelines establish that the exercise of ownership rights should be clearly identified within government, whether it is located in a central ministry such as the finance or economy ministries, in a separate administrative or corporate entity, or within a specific sector ministry. The ownership function of SOEs is the entity that exercises the power, responsibility, or steering ability to appoint boards of directors; set and monitor objectives; and/or vote on the company shares on behalf of the government. Centralisation can be an effective way to clearly separate the exercise of the ownership function from other potentially conflicting activities performed by the state, particularly market regulation and policymaking. If this is not possible, relevant ownership functions should be co-ordinated by a designated body with a clear mandate to act on a whole-of-government basis (OECD, 2024[4]).
In practice, governments exercise their shareholding responsibilities in SOEs through a diverse range of institutional arrangements. These range from more centralised to less centralised structures, influenced by historical legacies, levels of institutional development and political frameworks (OECD, 2024[12]).
An “ownership entity” can be a single state ownership agency, a co-ordinating agency, a government ministry, or another public entity responsible for exercising state ownership. Ownership entities can moreover be organised into corporatised state-owned holding companies (OECD, 2024[12]).
Broadly, ownership models or arrangements can be classified into the following categories (OECD, 2024[12]):
Centralised ownership model: One central decision-making body undertakes shareholding duties in all companies and organisations controlled or held, directly or indirectly, by the state. Financial targets, operational and technical issues, and performance monitoring are all the responsibility of the central body. While there are different ways of appointing board members, essential input usually comes from the central body.
Co-ordinating agency model: Operates in an advisory capacity to other shareholding ministries on technical and operational issues and often their most important mandate is to monitor SOE performance. This model consists of a department with non-trivial powers over SOEs, but where ownership rights are formally exercised by other ministries or departments.
Dual ownership model: Two ministries or other high-level public departments share ownership in each individual SOE. Usually, one ministry sets financial objectives (typically the ministry of finance), and another ministry (typically a sectorial one) develops and formulates policy priorities. If established with well-articulated responsibilities the dual model could strike a balance between a model in which numerous and contradictory ownership objectives result in a “passive conduct” of the ownership function and a model that allows for excessive intervention by the state
Twin track model: The twin track model is a unique offshoot of centralisation but within simultaneously established "ownership systems". Two or more different government institutions exercise exclusive ownership functions on their respective portfolios of SOEs. There are two or more SOE ownership units operating simultaneously for separate sets of SOEs based on their designations
Dispersed ownership model: No single institution or state actor is responsible for the ownership function. The ownership of each SOE is conducted by one line-ministry or other government institution. Various institutions are typically involved. In this case, SOEs could often be publicly perceived as an extension of the ministerial powers of the ownership ministries.
Defining with confidence the predominant ownership models in African countries would require a deeper analysis than that shown in Table 6.5, which attempts to categorise the key entity or entities involved in exercising ownership rights in each of the countries analysed. The table suggests that dispersed ownership is the most common approach, where ownership functions are fragmented across multiple government entities, most frequently involving a combination of line ministries, which oversee operational and sectoral policy, and the ministry of finance, which is responsible for fiscal discipline and financial oversight. A lack of co-ordination across government can lead to fragmented oversight, inconsistent governance practices, and limited strategic co-ordination. Despite having dispersed ownership frameworks, several countries have established centralised bodies aimed at providing strategic guidance on state-ownership reforms.
The second group corresponds to emerging co-ordinating agencies that provide policy guidance and advise on governance issues. These agencies typically do not hold direct ownership rights but aim to professionalise state ownership through monitoring, corporate governance advice, and strategic planning.
Other countries seem to be moving towards centralisation, establishing dedicated agencies that serve as shareholder representatives on behalf of the state. These bodies are tasked with performance monitoring, board appointments, and policy development. Others display mixed ownership models.
In the context of African economies, where state-owned enterprises often dominate key sectors such as extractives, energy, and infrastructure, more centralised or co-ordinated ownership models can play a crucial role in supporting the development of capital markets. When designed and implemented with integrity, accountability, and clear safeguards against undue influence, such models can help consolidate oversight, standardise governance practices, and improve transparency and performance monitoring. Without these safeguards, however, centralisation risks merely concentrating inefficiencies or even corruption, ultimately undermining investor trust. Strong ownership arrangements, underpinned by robust checks and balances, also facilitate the consistent application of financial reporting and corporate governance standards—critical prerequisites for SOE access to equity and debt markets. In this sense, ownership reform is not only a governance imperative but also a key enabler of deeper, more dynamic capital markets across the region.
Types of ownership arrangements adopted
Note: The ownership models are based on a general assessment of the main characteristics of state ownership in each country. A more refined classification would require more in-depth information not available at the time of writing.
Clear and predictable state ownership governance frameworks enhance investor confidence by strengthening transparency, accountability and oversight, which are critical for attracting domestic and international capital. Furthermore, when SOEs operate under commercial principles and follow strong corporate governance practices, they can become viable candidates for listings or issuing corporate bonds, hence contributing to market depth, liquidity and providing new investment opportunities. Furthermore, well-defined legal and institutional environments ensure that SOEs compete fairly with private companies, fostering healthier and dynamic markets rather than crowding out private investment with inefficient, state-subsidised entities. However, those reforms are not enough to foster the development of capital markets in the region. Other structural reforms are equally necessary, including effective market regulation and enforcement, improving investor protection frameworks, developing domestic institutional investors, and ensuring macroeconomic stability. Only when these complementary measures advance alongside SOE governance reforms can capital markets become a reliable source of long-term financing and support broader economic transformation.
Stronger SOE governance frameworks can directly and indirectly contribute to capital market development in Africa. By enhancing transparency, predictability, and professionalism in state ownership, governments can improve SOE performance, help to attract investment, and create deeper and more dynamic capital markets. As analysed in Chapter 2, it is also important to strengthen the independence of boards and enhance disclosure practices regarding board composition. To this end, the following policy priorities emerge:
African governments could improve the availability and publication of data on SOEs, including aggregate performance reports. Greater transparency is essential for strengthening accountability in a sector that often represents a large share of GDP and dominates key industries such as energy, transport, and finance. OECD Guidance on preparing annual SOE aggregate reports can be helpful in this regard, including by disseminating financial and non-financial information at SOE portfolios and individual SOE level as well as relevant information on policies and institutional frameworks (OECD, 2022[39]).
Modernising state ownership legal frameworks can help to increase clarity, transparency, accountability and predictability for the capital market ecosystem and for the public in general. Further structural reforms would also be important for African economies seeking to broaden their capital markets and attract international investors through bond issuance or public listings.
Governments could publish comprehensive ownership policies that clearly outline the overarching objectives of state ownership—whether addressing market failures, providing public goods, or safeguarding strategic sectors. Such policies should also set out ownership rationales for each individual SOE, clarifying why the state remains involved and what policy objectives are expected of it. In addition, ownership policies can establish performance expectations, define governance responsibilities, and create safeguards against undue political interference. By identifying the sectors where the state intends to maintain a long-term presence and those where capital market development could provide opportunities for future SOE listings or partial privatisations, governments enhance predictability. Clear and coherent ownership policies, backed by both general and enterprise-specific rationales, increase transparency, depoliticise SOE governance, and strengthen investor confidence in markets where SOEs play a central role.
Many African countries rely on dispersed ownership models, with responsibilities scattered across ministries and agencies. This fragmentation can stand in the way of better coherence, accountability, and strategic oversight at the portfolio-level. Moving towards more centralised or co-ordinated ownership arrangements, operating under the right conditions —whether housed in a finance ministry, an ownership agency, or another designated body—can strengthen performance monitoring, standardise governance practices, and clarify the separation of ownership, policymaking, and regulatory functions. In turn, such reforms create a more predictable and investor-friendly environment.
Well-governed SOEs are not only more efficient providers of public services; they can also become credible issuers of bonds or equities. By aligning SOE governance reforms with capital market development strategies, African governments can expand financing options, attract investors, and boost private sector growth.
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← 1. State ownership refers to ownership by central and local governments, as well as indirect ownership of central and local governments via a sovereign wealth funds, public pension funds, government investment funds or financial vehicle, other SOEs, etc.
← 2. A World Bank report on the Business of the State has used the Orbis database (see next endnote) and other sources to produce a database on SOEs globally but using a lower state ownership threshold of 10%.
← 3. The analysis is based on a dataset collected using Orbis, a proprietary global database with detailed financial, ownership and corporate structure information for over 500 million companies worldwide. In addition, information on the economically most significant African companies from The Africa Report, a news organisation on African politics and economics, is used to complement the analysis. The Africa Report publishes an annual list of the largest 500 companies in Africa, which is constructed based on revenue data for nearly 1 300 companies from a database of 15 000 registered companies in the continent. Businesses that are legally based in the continent, including holdings and their subsidiaries, are included, with a few exceptions in the mining sector. Some family-owned groups don’t produce consolidated accounts and others don’t publish any accounts at all. By principle, these are left out of the ranking. The figures cover the financial year ending in late 2022 or up to June 2023. The most recent financial year within this mid-year limit is what is considered.
← 4. This number may also count subsidiaries/ branches as separate legal entities. Ownership or control can be exercised by public authorities, states, and governments, including other SOEs or entities that are controlled by governments.
← 5. The government directly holds 8.5% of SASOL’s ordinary shares, an additional 8.5% are owned by the Industrial Development Corporation of South Africa, a fully state-owned development finance institution (SASOL, 2025[40]). State ownership summed up across multiple ownership levels amounts to at least 25% in some business branches of SASOL, especially those operating abroad.