State-owned enterprises (SOEs) play a central role in Africa's economies. Despite their economic significance, their participation in public capital markets remains limited. This chapter explores how SOE governance reforms can contribute to bridging this gap by strengthening transparency, accountability and investor confidence. This will help to increase the number of investable SOEs which in turn will support broader capital market development. Drawing on evidence from recent reform experiences in Egypt, Ethiopia and Morocco, it shows that many African SOEs possess the scale and performance needed to attract private investment, but face governance and market-related constraints. The chapter argues that aligning SOE governance with OECD standards could help build a pipeline of market-ready enterprises able to mobilise private capital as well as support sustainable economic growth and resilience across Africa.
Africa Capital Markets Report 2026
Abstract
Large SOEs are key economic actors in Africa, notably in strategic sectors. However, they remain under‑represented in capital markets relative to other emerging markets.
Many unlisted SOEs in Africa already possess the scale and operating performance required for market participation. However, governance issues and broader market development challenges are likely to be constraints to greater capital market participation. Improving transparency and disclosure, professionalising ownership, clarifying ownership rationales, enhancing accountability and limiting political interference can support future potential listings.
Countries advancing SOE governance reforms are more likely to create a pipeline of transparent and investable SOEs. Efforts in countries such as Egypt, Ethiopia and Morocco could help to attract private capital through listings and other market-based financing to SOEs. When reforms are coupled with capital market development strategies, they are likely to improve investor confidence, support the emergence of market‑ready enterprises and, with time, foster market development.
SOE governance reforms alone are not sufficient for successful and sustainable SOE listings. SOE listings in Africa remain constrained by the limited size, depth and liquidity of capital markets, the narrow domestic institutional investor base, high trading costs, concentrated market activity and persistent investor confidence challenges.
Capital markets can play an important role in enabling SOEs to finance essential services, infrastructure and other strategic investments. By broadening access to financing and diversifying funding sources, capital markets can support economic resilience while contributing to sustainable growth and development.
State-owned enterprise (SOE) governance reform and capital market development in Africa are closely linked. By strengthening transparency, disclosure, accountability and board effectiveness, governance reforms can support increased investor confidence and make SOEs more attractive to private capital. Better governed SOEs are then likely to contribute to broader and deeper capital markets through their market participation. For African SOEs, access to capital markets can diversify funding sources, reduce reliance on public funding, and support financing for infrastructure and other development priorities. Together, these outcomes can enhance both economic resilience and the capacity of SOEs to deliver sustainable growth.
Section 5.2 shows that African SOEs are central economic actors, especially in strategic sectors, but their presence in public equity markets remains limited. The evidence suggests that many unlisted SOEs have sufficient scale and operating performance to be credible candidates for market participation. Section 5.3 presents recent reforms in Egypt, Ethiopia and Morocco that show that SOE governance reform can support capital market development through different channels: divestment and listings, development of new exchanges and expansion of the use of market-based financing instruments. Section 5.4 concludes by showing how OECD corporate governance standards can help governments prepare SOEs for market access, strengthen investor confidence and use listings strategically to support public policy objectives, market development and economic resilience.
5.2.1. Scale and economic importance of large SOEs in Africa
SOEs are key economic and policy actors in many African countries, and they operate in a broad range of commercial and public service sectors. The state ownership landscape across the continent is characterised by its diversity in ownership models, governance frameworks, legal structures and levels of economic development. To ensure comparability and focus on the enterprises with the largest economic footprint and public policy impact, this report concentrates primarily on large SOEs (with total assets exceeding USD 100 million in 2024). Although SOEs are among Africa’s most important economic actors and many possess the scale and performance characteristics associated with market participation, their presence in public equity markets remains limited relative to other emerging markets and developing economies (EMDEs).
Based on the methodology of the OECD State-Owned Enterprises Global Dataset (Arikan, Medina and Ruiz Casas, 2026[1]), Africa accounted for a relatively limited share of the global SOE footprint, with 194 large non-financial and 219 large financial SOEs identified in 2024. The region represents only 1% of large non-financial SOEs and 3% of large financial SOEs globally, while accounting for around 1% of total SOE assets in both sectors. In asset terms, large African SOEs hold USD 432 billion in non-financial assets and USD 913 billion in financial assets. Financial institutions’ domination in terms of assets in the region is in line with all other regions (Table 5.1).
Note: The Africa sample includes SOEs based in the following jurisdictions: Algeria, Angola, Botswana, Cabo Verde, Côte d'Ivoire, Democratic Republic of the Congo, Egypt, Ethiopia, Gabon, Gambia, Ghana, Kenya, Kingdom of Eswatini, Libya, Mauritius, Morocco, Mozambique, Namibia, Nigeria, Republic of the Congo, Rwanda, Senegal, Seychelles, Sierra Leone, South Africa, Sudan, United Republic of Tanzania, Tunisia, Uganda, Zambia, Zimbabwe.
Source: OECD State-Owned Enterprises Global Dataset.
The share of SOEs among Africa’s largest corporations highlights their prominent role in the region (Table 5.2). Seven out of the region’s top ten firms by revenue are identified as having significant public sector ownership under the OECD’s State-Owned Enterprises Global Dataset methodology (“OECD methodology”). State ownership remains especially significant in sectors associated with natural resources and critical infrastructure, where governments often retain controlling stakes to safeguard strategic interests. Notably, the two largest companies by turnover -SONATRACH (Algeria) and NNPC (Nigeria) - are national oil companies, fully state-owned, and generate revenues of USD 64.8 billion and USD 30.2 billion respectively, equivalent to approximately 24% and 13% of national GDP.
1. An entity is considered an SOE when direct or indirect public ownership exceeds 25% of equity based on the methodology explained in Annex 5.A.
Source: The Africa Report (2026[2]), 500 Business Champions, https://www.theafricareport.com/ranking/500-business-champions/
The firms identified under the OECD methodology reflect a diversity of ownership structures. While most SOEs in the sample are fully state-owned and unlisted, Sasol and Bidcorp illustrate different forms of public-sector participation in listed companies. Sasol reflects a legacy of partial privatisation and the opening of historically state-owned enterprises to private investors, whereas Bidcorp is associated with significant shareholdings held by public sector institutional investors.
These arrangements can support capital market development by combining public sector investment with private capital, while enabling public institutions – including public pension funds and other state investment vehicles – to share in the returns generated by large corporates. Although these arrangements differ from full state ownership, such investments can increase the public sector's presence in the corporate economy while simultaneously supporting deeper and more liquid domestic capital markets.
Note: Financial SOEs are excluded from the industry analysis to enhance comparability across sectors, as the scale and composition of their assets are not directly comparable with those of non-financial enterprises and could disproportionately influence the results.
Source: OECD State-Owned Enterprises Global Dataset.
Africa has the largest share of SOE assets in mining, at 40%, followed by Latin America and the Caribbean (36%). This compares with 10% globally and 12% across emerging economies (Figure 5.1). This underscores the continued importance of extractive industries in the region. Infrastructure-related sectors, including transport, communications and utilities, represent 24% of large SOEs’ assets, reflecting persistent infrastructure needs. This is broadly in line with China (23%) and EMDEs (26%).
The distribution of African SOE assets is less diversified than in other regions. The predominance of mining among the largest companies highlights the continent’s significant natural resources but also its vulnerability to commodity price volatility. Regional aggregates nevertheless mask cross-country heterogeneities in asset distribution across industries. They result from differences in economic structures, resource endowments and state ownership strategies across African countries.
5.2.2. Limited presence of SOEs in African equity markets
As discussed in previous chapters, capital market development in Africa remains highly uneven. While several countries have developed relatively active debt and equity markets, many others continue to face structural constraints, including limited market infrastructure, shallow investor bases and low market liquidity. In jurisdictions with small or illiquid exchanges, domestic markets may be unable to provide sufficient investor depth or trading liquidity for larger SOE listings. In such circumstances, other regional integration mechanisms, cross-listings or dual-listing arrangements can facilitate SOE market access. For example, Kenya Airways has leveraged cross-listings within East African capital markets (Nairobi Securities Exchange, Uganda Securities Exchange, Dar es Salaam Stock Exchange), while Maroc Telecom's dual listing in Casablanca and Paris has also allowed broader access to international investors.
Among Africa's largest firms, public-sector ownership remains characterised by limited use of public equity markets, with only a small number of firms combining state participation and stock market listing (Figure 5.2). Most of the largest firms with significant public ownership in Africa (five out of seven) are not currently listed, including the three largest firms by turnover. By contrast, two out of three non-SOEs included in the top 10 are publicly listed. The two listed firms with significant public ownership are both South African, highlighting the role that deeper domestic capital markets can play in facilitating mixed ownership structures and access to equity financing. While these examples demonstrate that public sector ownership can coexist with stock market participation, they remain exceptions among the largest firms in the sample. Overall, the largest firms with public sector ownership continue to be predominantly unlisted and fully state-owned.
Note: All industries excluding financial
Source: OECD State-Owned Enterprises Global Dataset.
Africa is the emerging region where large SOE assets are most heavily concentrated in unlisted companies. Listed large SOEs account for only 27% of total SOE assets in Africa, compared with 45% across emerging markets as a whole and 42% globally. It is also well below the levels observed in China (43%) and Asia excluding China (54%). The relatively limited share of listed SOEs suggests that capital markets currently play a smaller role in financing SOEs than in other EMDEs. Africa’s asset distribution is therefore more similar to that of advanced economies and Europe, where unlisted SOEs largely dominate, than to other emerging market regions.
However, the similarity in outcomes likely reflects different historical trajectories. In Europe, successive waves of privatisation during the 1980s, 1990s and early 2000s transferred many commercially oriented SOEs to private ownership or mixed-ownership structures. As a result, many of the SOEs that remain under state ownership today are concentrated in strategic sectors and often remain wholly state-owned and unlisted. In Africa, privatisation programmes reduced the role of the state in parts of the economy but generally resulted in a less extensive transfer of assets to the private sector. Consequently, many of the continent's largest firms remain under state ownership, particularly in strategic sectors such as energy, mining and infrastructure.
Africa accounts for a relatively small share of the global listed SOE universe, with 122 companies compared to 2 610 worldwide (Figure 5.3). Despite this small number, African SOEs represent 23% of the region’s total market capitalisation, exceeding the global average share of 11%. This mostly reflects the limited depth of equity markets in Africa, where comparatively few private firms are listed (see Chapter 2). Compared with other emerging markets where SOEs’ share of total market capitalisation is around 40%, the participation of African SOEs in equity markets remains comparatively modest.
Note: All industries including financial. Companies with at least 25% public ownership are considered as SOEs.
Source: OECD Capital Market Series dataset; LSEG; FactSet; Bloomberg.
This difference largely reflects the more extensive privatisation and listing programmes undertaken in many emerging economies where governments have brought large SOEs to public markets to increase market size and to expand the investor base, such as Brazil, Korea, Poland, Romania, Singapore (Silva, 2021[3]). In China, the establishment and expansion of the Shanghai and Shenzhen stock exchanges were closely linked to efforts to corporatise and partially list SOEs (OECD, 2025[4]). Similarly, Viet Nam’s equitisation programme relied heavily on the listing of SOEs, which played a catalytic role in the development of the country’s capital markets. This points to Africa’s potential to broaden SOEs’ market participation and expand their access to public equity financing.
5.2.3. Historical trends in African SOEs listings
African SOEs have made only sporadic use of public equity markets since 2001, with less than 30 IPOs recorded over the entire period (Figure 5.4). Issuance activity has been highly concentrated in a small number of years, notably 2007, while no IPOs took place during 7 of the last 14 years (2012, 2019–2020 and 2022–2025). Although a few large transactions resulted in significant capital raising (including Maroc Telecom in Morocco in 2004 and Telecom Egypt in Egypt in 2005), aggregate issuance volumes have remained modest and uneven over time. The limited number of listings and the absence of sustained issuance activity show that stock markets have played only a marginal role in financing African SOEs.
Note: All industries including financial. Companies with at least 25% public ownership are considered as SOEs.
Source: OECD Capital Market Series dataset; LSEG; FactSet; Bloomberg
In line with broader market trends beyond the SOE sector (see Chapter 2), African SOEs have relied more frequently on secondary equity offerings than on IPOs, although issuance activity has remained limited. SPO activity accelerated after the mid‑2000s, peaking at 12 transactions in 2010, while annual issuance volumes remain very volatile, driven by a small number of large capital raisings. Despite this greater use of follow‑on equity issuance, the number of transactions has remained modest and concentrated in a few markets and over a small number of years. Over the period, 70% of the total amount issued through IPOs and 87% of the total amount issued through SPOs were concentrated in three countries (Egypt, Morocco and South Africa).
African SOEs’ limited participation in public equity markets also reflects shallow and illiquid markets, regulatory limitations, high trading and listing costs, and limited investor demand for IPOs, which are explored further in Chapter 2.
The timing of SOE equity issuance appears linked to wider macroeconomic and global market conditions. The concentration of IPOs and SPOs in the mid-2000s and around 2010 coincided with periods of strong global liquidity (OECD, 2010[5]). Conversely, years with little issuance activity broadly correspond to periods of heightened uncertainty, including the aftermath of the global and Eurozone financial crises, the COVID-19 pandemic, and the tightening of global financial conditions observed since 2022 (OECD, 2022[6]). In addition to reflecting broader market conditions, the timing of SOE equity issuances may also be influenced by government decisions regarding ownership policy, privatisation programmes and valuation considerations. Periods of heightened uncertainty may lead governments to postpone planned transactions, particularly when market conditions are perceived as unfavourable for achieving policy or fiscal objectives.
5.2.4. The potential pipeline of listable SOEs in Africa
The limited use of capital markets as a channel for SOE financing and ownership diversification in Africa suggests a potential opportunity. Expanding SOE listings could not only broaden and deepen local equity markets, but also enhance transparency, strengthen governance practices, and mobilise long-term private capital for infrastructure and other priority sectors. As reflected in Figure 5.5, Africa offers a relatively large pool of listable SOEs that, with the appropriate structural and governance reforms, could meet the criteria for capital market participation. Figure 5.5 seems to suggest that limited market participation cannot only be explained by size or operating performance. Governance, transparency, ownership arrangements, market depth and investor confidence are also likely to be constraints.
While stock exchange listings can strengthen transparency and accountability by subjecting SOEs to capital market disclosure requirements, the extent of these benefits depends on the quality and enforcement of listing and securities regulations, which vary across jurisdictions (Vasquez et al., 2024[7]). At the same time, listing is not the only avenue for enhancing transparency. Comparable outcomes can be achieved through robust public reporting frameworks, accompanied by the publication of financial and non-financial information.
Note: All industries excluding financial
Source: OECD State-Owned Enterprises Global Dataset.
Having large and profitable SOEs is a key condition for successful SOE listings (Silva, 2021[3]). Figure 5.5 suggests that several unlisted African SOEs may possess financial characteristics that make them potential candidates for market listing. Listed African SOEs are, on average, larger than unlisted SOEs, with average total assets of USD 2.7 billion compared with USD 2.3 billion in 2024, and an average turnover of USD 1.2 billion compared with USD 0.9 billion. Averages may mask heterogeneity across firms, and aggregate profitability metrics may be influenced by a limited number of large or profitable SOEs.
However, the differences in size between unlisted and listed SOEs are relatively limited. Despite remaining outside of public equity markets, unlisted large SOEs appear to be of a comparable size to listed large SOEs, suggesting that several already have the scale required to attract investor interest and could potentially be listed.
On average, unlisted large SOEs report a higher return on equity than listed large SOEs (10% versus 7% in 2024) and slightly stronger earnings before interest, taxes, depreciation and amortisation (EBITDA) margins (31% versus 28%). This suggests that unlisted SOEs generally have a sound performance profile despite lower access to equity markets. While unlisted firms exhibit lower profit margins (18% versus 25%), this may partly reflect differences in cost structures and public-service obligations rather than weaker fundamentals. At the same time, their higher gearing ratio (116% versus 95%) points to greater reliance on debt financing, underscoring the potential benefits of equity market access.
The analysis above suggests that Africa's limited use of capital markets by large SOEs cannot be explained solely by firm size or operating performance. Governance-related factors are likely to play an important role in determining whether SOEs can attract private investment and access market-based financing, together with other factors such as legal frameworks and general asset readiness. This highlights the importance of viewing SOE governance reform not only as a tool to improve enterprise performance, but also as a catalyst for capital market development. The next section builds on the experiences of three African countries to illustrate how reforms aimed at professionalising state ownership, strengthening accountability, and improving governance frameworks can support a pipeline of market-ready SOEs and expand the role of capital markets in supporting broader public policy goals.
The recent reform of SOE sectors in Egypt, Ethiopia and Morocco illustrates the growing connection between state ownership policies and capital market development in Africa. These countries were selected not as an exhaustive assessment of SOE reform across the continent, but because they have recently undertaken ambitious reforms with clear implications for capital-market development. Together, they exemplify different reform sequences, institutional models and channels through which SOEs can engage with capital markets in the African context.
The three case studies also illustrate different pathways through which SOE reform can interact with capital market development. Egypt has focused primarily on divestment and asset monetisation, Ethiopia has combined SOE governance reform with the creation of a new securities exchange, and Morocco has prioritised portfolio optimisation and the gradual mobilisation of market-based financing.
5.3.1. Egypt - Using state ownership policy to support divestment and private capital mobilisation
Egypt provides an example of a divestment-oriented approach to SOE reform, in which capital markets are used as a tool to reduce the state’s economic footprint, attract private investment and improve SOE governance.
Egypt recently updated its State Ownership Policy (SOP), building on the framework first introduced in 2022 and revised in 2023. The original policy established the government's objectives and principles for state ownership, identifying criteria such as national security considerations, the development of priority technological industries, and the attractiveness of sectors to private investment. Recent OECD analysis notably links improvements in infrastructure governance to the objective of attracting greater private investment, consistent with Egypt's broader reform efforts (OECD, 2026[8]).
The second edition of the SOP, published in June 2026, builds on the experience gained during the first implementation phase (2022-2025). It places greater emphasis on efficiency, competitive neutrality, fiscal sustainability and measurable economic impact, reflecting Egypt's objective of moving towards a more comprehensive framework for managing state assets (Egypt, Arab Republic of, 2026[9]). The updated policy seeks to improve asset readiness and governance, strengthen institutional co-ordination and increase the contribution of the private sector to growth, employment, exports and investment.
The SOP also recognises the need for SOE governance reforms and explicitly commits to align with the OECD Guidelines on Corporate Governance of State-Owned Enterprises (“SOE Guidelines”). Key initiatives include a clear separation between ownership and regulatory functions, enhanced transparency and disclosure, stronger board independence, improved risk management and audit systems, and rigorous public investment governance and procurement practices.
Egypt’s SOP is also developed in the context of wider economic reforms to enhance private-sector participation in the economy. Under the IMF’s Extended Fund Facility (EFF), Egypt has committed to reducing the state’s footprint in the economy, levelling the playing field between public and private firms, accelerating divestment, and fostering stronger private-sector-led growth as essential elements for sustaining macroeconomic stability and raising medium-term growth prospects (International Monetary Fund, 2026[10]).
Egypt’s SOE governance agenda is linked with the state's exit from non-strategic activities. According to the updated SOP, the government’s main strategic tool to achieve these goals is the “Government Offerings Programme”. This programme is intended to sell minority or majority stakes in selected SOEs, list companies on the Egyptian Exchange (EGX), bring in strategic investors through private sales of capital, transfer some assets to the Sovereign Fund of Egypt for restructuring and commercialisation before sale, and improve governance and transparency of SOEs to make them more attractive to investors.
As part of the implementation of Egypt’s SOP, in February 2023 the Egyptian government announced an expanded asset monetisation and IPO programme, covering 32 SOEs (Ahram Online, 2023[11]). The programme envisaged a combination of stock market listings, secondary offerings of shares in already listed companies and sales to strategic investors.
In practice, however, progress through stock exchange listings has been more limited than initially envisaged. While the programme anticipated that several SOEs would be listed on EGX, implementation has largely taken the form of stake sales to strategic investors rather than new initial public offerings. Important uncertainties remained regarding the ultimate scope of state withdrawal, the number of enterprises targeted for divestment and the legal and institutional frameworks governing transactions across different asset classes and private-sector participation (OECD, 2024[12]).
Egypt’s experience shows how an ownership policy can identify capital markets as part of a broader strategy to reduce the state’s economic footprint and attract private investment. However, implementation has so far relied more on strategic stake sales than on new public listings, highlighting the importance of market conditions, asset readiness and investor confidence. The case underlines that divestment programmes need to be supported by governance reform, credible sequencing and a stronger enabling environment for private-sector participation. Recent initiatives, including the temporary listing of six industrial SOEs on EGX in April 2026 as part of IPO preparations, further underscore the government's ambition to deepen capital markets and mobilise private capital.
5.3.2. Ethiopia - Leveraging SOE reform to foster the emergence of domestic capital markets
Ethiopia illustrates how SOE reform can directly support the development of a new domestic capital market. It has undertaken an SOE reform programme as part of its broader Homegrown Economic Reform Agenda, published in 2019. The reform agenda aims to safeguard macro-financial stability and sustain economic growth, with “strengthening public finances, including through improving the efficiency of SOEs privatisation” identified as the first pillar (Ministry of Finance of Ethiopia, 2020[13]). Ethiopia’s approach therefore combines market liberalisation, improvements in SOE governance and performance, and the gradual introduction of private capital where this can support investment, competition and efficiency.
A key element of the reform has been the establishment of a new institutional framework for state ownership. Since 2019, the government has implemented measures to strengthen the oversight of federal SOEs, including the creation of a dedicated SOE Oversight Division within the Ministry of Finance, and the adoption of new legal and governance frameworks aimed at improving transparency, accountability and fiscal risk management (Ethiopia News Agency, 2026[14]).
The creation of Ethiopian Investment Holdings (EIH) in 2021 marked another important milestone in the reform process towards a centralised ownership model. EIH was established as a sovereign holding company responsible for managing many of Ethiopia's largest commercial SOEs, including Ethio Telecom, Ethiopian Airlines and the Commercial Bank of Ethiopia.
This new framework established the basis for a broad governance reform agenda, including commitments to strengthen board professionalism, require audited financial statements, promote the adoption of international financial reporting standards and enhance disclosure requirements. While these measures represent important steps towards a more transparent and professional ownership framework, implementation remains incomplete. EIH has so far published only one set of consolidated financial statements, covering FY2022/23, and these were unaudited. The quality and timeliness of external audits continue to present challenges and an annual portfolio-aggregated reporting has yet to be produced.
In 2025, the establishment of the Ethiopian Securities Exchange (ESX) provided a new mechanism through which SOEs can access private capital, broaden ownership and improve transparency. Its creation explicitly mentioned its main market as a platform for listing some of the largest SOEs, showing the link between the government’s capital market development objectives and the SOE sector reform (Ethiopian Securities Exchange, 2026[15]).
The most significant example to date has been the listing of Ethio Telecom. Following the company's transformation into a joint stock company, the government launched a public offering of a minority stake to Ethiopian citizens as part of its economic reform programme. In May 2026, Ethio Telecom became the first SOE to be listed on ESX, marking a major milestone both for SOE reform and for the development of Ethiopia's capital markets (Ethiopian Securities Exchange, 2026[16]).
Nevertheless, significant challenges remain. While the listing of Ethio Telecom marked an important step in the development of Ethiopia’s capital market, the market remains at an early stage of development characterised by limited depth, liquidity and investor participation, and with no additional SOE listings currently under preparation. Many recent reforms have yet to be fully implemented and important gaps persist in areas such as corporate governance, transparency, disclosure and fiscal risk management (EIH, 2026[17]). Moving forward, expanding the pipeline of listed SOEs will require sustained reform efforts, including improvements in financial reporting and disclosure practices, stronger accountability and oversight mechanisms, more effective governance arrangements, including greater board independence, and measures to strengthen investor confidence and market capacity (International Monetary Fund. African Dept., 2026[18]).
5.3.3. Morocco - Professionalising state ownership to mobilise capital market financing
Morocco illustrates how SOE reform centred on professionalising the state ownership function and improving governance can prepare SOEs to make greater use of private and market-based financing and lay down the foundations for future capital market transactions and private sector participation.
Morocco’s recent SOE sector reform is based on several pieces of legislation, both promulgated in 2021. Law No. 50-21 on the reform of public establishments and enterprises established the framework for the reform, its main objectives and its implementation procedures. Law No. 82-20 formally created the Agence Nationale de Gestion Stratégique des Participations de l'Etat (ANGSPE) to professionalise the state's ownership function, centralise oversight of strategic state assets and separate ownership responsibilities from SOEs’ operational management.
A central pillar of the reform is Morocco’s new SOP (Politique Actionnariale de l'État), whose strategic orientations were adopted by decree in December 2024. Morocco’s new SOP establishes the state's rationale and objectives for ownership, clarifying the role of SOEs in supporting national sovereignty, public service delivery, strategic sectors, innovation and socio-economic development (ANGSPE, 2024[19]). It more specifically aims at strengthening the exemplary role of SOEs in governance and performance and making the SOE sector a pillar for stimulating private investment.
Governance reform is hence central to the programme. The SOP places particular emphasis on professionalising boards, clarifying accountability frameworks, aligning governance arrangements with international standards and strengthening performance monitoring. ANGSPE notably promotes the publication of consolidated financial statements in line with the International Financial Reporting Standards (IFRS) to improve the financial transparency of SOEs (ANGSPE, 2026[20]). ANGSPE has also introduced regular reporting on the state's portfolio through its annual State Shareholder Report, which aims to improve transparency regarding the financial and operational performance of SOEs (ANGSPE, 2025[21]).
As the governance agenda progresses, the capital market dimension of the reform has become increasingly prominent. In April 2025, ANGSPE and the Moroccan Capital Market Authority (AMMC) signed a memorandum of understanding aimed at facilitating access by public enterprises to capital market instruments (AMMC, 2025[22]).
In recent years, ANGSPE has actively supported SOEs’ transition from traditional state-backed financing towards market-based funding arrangements by assisting them in structuring bond issuances (including green bonds), securitisation operations and in the use of other financing instruments without government guarantees. This approach has been used to finance large-scale investment programmes across transport, infrastructure, energy and industrial sectors. By evaluating the financial implications, borrowing capacity and long-term sustainability of proposed financing plans, ANGSPE has helped SOEs to ensure that market funding contributes to both enterprise-level financial discipline and broader capital market development, while reducing reliance on direct state support.
Important implementation challenges remain. Moving from the new ownership policy towards a concrete portfolio rationalisation will require sustained political commitment and institutional capacity. Furthermore, while capital markets are expected to play a greater role in financing public enterprises, deeper use of market-based instruments will depend on continued improvements in corporate governance, transparency, investor confidence and the development of a pipeline of investment-ready entities. While SOE listings have been mentioned as a possible objective, the authorities have not yet communicated a specific pipeline of candidates.
Morocco’s experience shows how capital market development can be embedded in a broader reform of state ownership, even in the absence of an immediate privatisation or IPO programme. By professionalising the ownership function, improving financial transparency and building institutional links with the capital market authority, Morocco is creating conditions that could allow public enterprises to access a wider range of financing instruments over time.
Taken together, Egypt, Ethiopia and Morocco show that SOE governance reform can support capital market development when it is accompanied by stronger governance, clearer ownership objectives and credible implementation mechanisms. As shown in Table 5.3, the three countries differ in their sequencing and instruments, but all demonstrate the importance of preparing SOEs through clearer ownership objectives, more professional ownership arrangements, stronger disclosure practices and enhanced board oversight. These experiences also show that capital market outcomes depend not only on policy ambition, but also on asset readiness, investor confidence, institutional capacity, measures to address foreign exchange risk and broader market conditions.
5.4.1. Strengthening SOE governance frameworks to access public equity markets
SOEs often face governance challenges that can weaken performance and reduce investor confidence. Excessive or politically motivated government intervention may undermine operational autonomy, while weak ownership oversight can reduce accountability for boards and management. Effective governance is essential to overcome these challenges and build investor confidence. Conversely, fragmented ownership structures, unclear public policy objectives and political interference can increase perceived risks and reduce access to private capital on favourable terms (OECD, 2024[23]).
This is particularly relevant for several African countries where fragmented legal frameworks, dispersed ownership arrangements, and limited co‑ordination among state actors continue to undermine oversight, accountability and strategic alignment (OECD, 2025[24]). Strengthening these frameworks can enhance transparency, reduce political interference and professionalise state ownership. As the three case studies show, key reforms include adopting comprehensive ownership policies, moving towards more centralised or co-ordinated ownership models, and improving disclosure, accountability and performance monitoring. These reforms, when supported by sustained political will and aligned with capital market development strategies, can also increase the value and effectiveness of SOE listings.
Finally, SOE listings also support capital market development by increasing market depth and liquidity, broadening the investor base and ultimately reinforcing the role of capital markets as a source of long-term financing for the local economy. From a public finance perspective, SOE listings can also generate proceeds that governments may allocate to key economic development and social policy objectives, including infrastructure development, education and health.
Beyond its contribution to capital market development, greater SOE participation in public capital markets can strengthen firms’ resilience. Many African governments face increasing fiscal pressures and competing demands on public resources, potentially limiting their capacity to finance the investment needs of large SOEs (see Chapter 4). Hence, access to capital markets can reduce SOEs’ dependence on government transfers, sovereign borrowing, budget constraints or changes in public investment priorities. Access to capital markets can also help SOEs adapt to volatile economic conditions through equity or bond issuance, securing stable funding that is more likely to match long-term funding needs than annual budget allocations in strategic sectors such as energy, transport, telecommunications and infrastructure. Table 5.4 presents a framework for governments seeking to address governance challenges faced by SOEs and prepare them for market participation.
Source: OECD Guidelines on Corporate Governance of State‑Owned Enterprises, 2024
5.4.2. Building a pipeline of market-ready SOEs
Building a pipeline of market‑ready SOEs is essential to unlock their potential contribution to African capital markets. The experiences of Egypt, Ethiopia and Morocco suggest that besides governance reforms, governments should make strategic decisions regarding how their SOE portfolios can contribute to broader capital market development objectives.
A clear ownership policy is fundamental to effective state ownership. The rationale for state ownership and any public policy objective entrusted to SOEs should be clearly articulated, closely linked to their principal business activities, established by the competent authorities and disclosed to the public.
The OECD’s Policy Maker's Guide to Privatisation notes that the privatisation of an SOE will typically be justified by the fact that the company no longer falls within the rationale for state ownership. There is no general rule to determine if activities are best placed in public or in private ownership. Rationales for state ownership vary across countries and sectors, reflecting a combination of economic conditions, strategic considerations and public policy goals. Explicit and transparent ownership rationales provide the foundation for an effective ownership policy, helping governments align SOEs’ objectives, governance arrangements, and performance expectations. Such rationales should be regularly reviewed to ensure that state ownership remains relevant despite evolving market conditions, strategic priorities, and the long-term value expected from the state's portfolio (OECD, 2019[26]).
Once governments have clarified the rationale for state ownership and assessed the composition of their SOE portfolio, they must determine the most appropriate form of market participation. The case studies above suggest that SOEs can contribute to capital market development through multiple channels, not only through privatisation or stock market listings. In Egypt, private capital mobilisation fits within a broader strategy to reduce the state's presence in selected economic activities. In Ethiopia, the listing of Ethio Telecom serves as an anchor transaction designed to attract investors and establish market credibility. In Morocco, reforms have focused on creating conditions for SOEs to make greater use of capital market debt and equity instruments over time.
The suitability of an SOE for market participation depends on national economic circumstances, policy objectives and the characteristics of the enterprise itself. The following elements can structure a productive screening process to identify candidates for financial market participation:
strategic relevance to national development objectives
commercial viability and profitability in the long term, including predictable revenue streams
potential to attract private investors while maintaining public policy mandates
general readiness for market participation including adequate regulatory, enforcement and competition frameworks
potential contribution to capital market depth, liquidity and diversification.
SOE listings should not be viewed merely as capital-raising transactions. They are more effective when undertaken as part of broader ownership reforms and capital market development strategies. The experiences of Egypt, Ethiopia and Morocco show that SOE reform can support capital market development through different pathways: divestment and minority stake sales, the use of large SOEs to back the emergence of new securities exchanges, or the gradual mobilisation of market-based financing instruments. When underpinned by governance reforms aligned with the OECD SOE Guidelines, listings can generate benefits at multiple levels: at the enterprise level by strengthening access to finance and enhancing transparency, governance and accountability; at the market level by expanding the supply of investable assets, deepening liquidity and encouraging broader investor participation; and at the state level, by enhancing the visibility and value of state assets, strengthening ownership oversight and, where relevant, generating fiscal proceeds from listing transactions.
References
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This chapter uses a definition of state ownership that proxies, to the extent possible, the definition of SOEs provided in the OECD Guidelines on Corporate Governance of State-Owned Enterprises 2024 (hereafter “SOE Guidelines”). In the SOE Guidelines, an SOE is defined 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. For example, state control over a company may be exercised through multiple channels, including special voting rights, legal stipulations, corporate articles of association, veto rights or decisive power over the appointment of members of the board of directors.
This chapter also relies on data from the OECD State-Owned Enterprises Global Dataset. This dataset relies on a methodology that develops a longitudinal global dataset of state-owned enterprises (SOEs) using ORBIS ownership and financial information from 2013 to 2024. SOEs are identified through an iterative ownership-tracing algorithm that classifies enterprises as state-owned when direct or indirect state ownership exceeds 25% of equity. The approach combines information on global ultimate owners with aggregated state shareholdings to avoid missing entities where ownership is dispersed across multiple public bodies.
Given the 25% ownership threshold used in the dataset, the resulting population captures a broad spectrum of enterprises with state participation. These range from fully state-owned companies and firms under majority state control to publicly listed or privately owned companies in which the state holds a significant minority stake, reflecting the various ways through which governments may exercise influence over corporate decision-making.
The dataset captures the aggregate direct holdings of the central and local governments, as well as holdings enterprises that may be indirectly related to central and local governments via a sovereign wealth fund, public pension fund, government investment fund or financial vehicle, SOEs, or other entities.
Ownership chains are then traced through up to ten layers of subsidiaries, allowing indirect state control to be captured across complex corporate structures. Potential SOEs are consolidated and linked back to the originating state entity, while public administrations, branches, non-profit organisations and other non-commercial entities are excluded. To improve cross-country comparability and data quality, the analysis focuses on large SOEs with assets exceeding USD 100 million (2024 prices).
Consolidated financial accounts are prioritised to avoid double counting and to better reflect the economic footprint of SOE groups. The identification process is repeated annually to capture changes in ownership structures over time and construct a consistent panel dataset. Missing ownership and financial information are addressed through vintage consolidation, interpolation and limited data-extension techniques. The resulting dataset provides a harmonised and internationally comparable measure of the size and evolution of state ownership across economies.
This section considers both financial and non-financial SOEs when assessing the aggregate SOE footprint. Sectoral and operating-performance analysis in this chapter focuses on non-financial SOEs, as financial SOEs’ balance sheets and margins are not directly comparable with those of non-financial enterprises.