LADIES AND GENTLEMEN OF THE PRESS

Let me, first of all, extend thanks and appreciation to the MICAT Family for giving me this opportunity to appear on this great and widely listened-to platform to bring the Liberian populace up to speed on the workings of the Bureau of State Enterprises (BSE) and state of affairs of the SOE Sector since the inception of my administration as Director General. 

The BSE was established by the Interim National Assembly Decree #8 in 1985 to provide oversight for State-Owned Enterprises  (SOEs) in Liberia. Therefore, the core function of the BSE is to advise the Government of Liberia (GoL) on all matters relating to the formulation and administration of SOEs. As the Oversight Authority for SOEs, the BSE is responsible for providing strategic leadership for SOEs and advising the Government of Liberia on policies that affect SOEs. As part of its statutory functions, the Bureau is responsible for ensuring the improved performance of SOEs by designing and implementing billing and collection systems for SOEs as well as a performance management system to ensure that they meet their statutory obligations to the Liberian people. 

LADIES AND GENTLEMEN OF THE PRESS AND THE PUBLIC

 Let me inform you that when I took over as Director General of the BSE, I met the Bureau in a complete state of operational dormancy; a state of affairs attributable to the lack of political will to strengthen its authority and operational capacity. Due to the lack of political will, the Bureau has found it difficult over the years to exert itself as an influential Oversight Authority for SOEs and is challenged in executing its functions effectively. This has affected the BSE’s ability to effectively monitor the operations and performance of SOEs to ensure accountability and transparency in their operations.

Key amongst the constraints confronting the BSE’s oversight of SOEs is the existing weak legal and regulatory frameworks for the oversight and governance of SOEs. The BSE’s statutory authority is unclear in the existing legal and regulatory frameworks, while some SOE foundational laws are also inconsistent with the PFM laws and the BSE Decree. A clear governance framework and an efficient monitoring system for SOEs are also lacking. 

These are the main issues that have made it difficult for the BSE to establish itself as an influential Oversight Authority for SOEs, thus, leading to the weak oversight of SOEs for years. Consequently, non-compliance, lack of accountability, and waste and abuse of resources across State-Owned Enterprises are prevalent, thereby affecting the effective delivery of core public services, and hence, undermining national growth and development. 

Let me say without mincing my words that many of our SOEs are marred with mismanagement and abuse of the resources they control to provide services to Liberians. The heads of many of the SOEs feel that they do not owe accountability to the Liberian people who are the owners of the enterprises they head. Therefore, they deliberately fail to submit their operational reports to the BSE for consolidation and publication to the public in flagrant violation of the PFM laws. This is because the existing laws do not specifically provide sanctions for heads of SOEs when they violate the laws.

Considering these issues and the significance of a well-functioning and efficient state enterprise sector, coupled with the political will that the BSE currently enjoys under the Unity Party-led Government, the present management team of the Bureau has taken a robust posture to ensure transparency and accountability in the operations of State-Owned Enterprises in order to enhance their contributions to the national growth and development of Liberia. SOEs have the potential to contribute more to our domestic revenue envelope if they are managed efficiently.

Over the last five months, the Team at the BSE has been engaged with the full reactivation of the BSE and addressing the existing legal, institutional, and governance challenges that currently affect the effective oversight of SOEs. Therefore, we have crafted a detailed transitional plan that provides a roadmap to address strategic reforms in the SOE sector over the next three to four years. The targeted reforms are geared toward ensuring the effective oversight and governance of SOEs to boost their contributions to domestic revenue mobilization and national development. The reforms will address the following priority areas: 

1.  Strengthening the legal and regulatory frameworks that will support the development of corporate governance and operational policies for SOEs;

2. Improving the governance and efficiency of SOEs individually and as a sector by designing and creating sectoral corporate governance and operational policies; 

3. Developing a robust enterprise information system for the sector to enhance the monitoring of SOEs to ensure transparency in their operations and promote their accountability to the public; and

4. Strengthening the institutional capacity of the BSE to enhance the effective monitoring of SOEs.

The first and most important process in harmonizing and strengthening the legal and regulatory framework for SOEs is the transitioning of the foundational law of the BSE from a Decree to an Act. The BSE, through its legal team, has drafted the Act and is currently engaged with the Law Reform Commission (LRC) and the Office of the President of the Republic of Liberia on the repeal of the INA Decree #8 and the subsequent legislation of the BSE Act. 

The BSE Act will serve as a foundation for the development of sector Regulations for SOEs and provide a strong basis for improving the corporate governance and performance of SOEs. The Act will clarify the authority of the BSE and reinforce its independence to discharge its statutory mandate. 

The enhanced legal and regulatory framework will set the basis for the development of corporate governance and operational policies to address all governance and operational issues across SOEs. Good governance and management of SOEs are critical to improvement in the efficiency of their operations and the reduction of costs to the government.

Currently, Liberia has no consolidated corporate governance policy document to guide the governance and management of SOEs. The existing corporate governance requirements are found in the foundational laws and other internal policies of individual SOEs. This has resulted in inconsistent governance and operational practices across SOEs leading to widespread fiscal indiscipline in the sector. The structure and composition of SOE boards, the remuneration of the boards and management, and the recruitment, hiring, and dismissal of employees differ from SOE to SOE. Some of these governance and management weaknesses are also confirmed in the World Bank 2023 Governance and Fiscal Risk Assessment Survey Report on the sector. 

For the first time, all heads and board chairpersons of SOEs were brought together under one roof with our partners to discuss the findings in the World Bank Report on the sector and key issues within the sector’s annual aggregate performance report for 2023 prepared under my supervision as Director General.

To address the varying governance practices and structural weaknesses in the governance and management of SOEs, the BSE is currently engaged with the Governance Commission for the review of all governance policies across SOEs. The process with the GC is intended to document all governance gaps to develop governance and operational policies that will harmonize the management and governance practices across all SOEs. This will help to address the many issues of financial impropriety and fiscal indiscipline in the sector.

Meanwhile, in our efforts to drive these reforms, we are engaged with development partners, including the World Bank, the African Development Bank, USAID-Liberia, and the International Monetary Fund (IMF) who see the BSE’s effort as a welcoming action and have pledged their unwavering support to help ensure accountability and transparency in the functionaries of SOEs.

While we are in the process of addressing reforms in the sector, we also remain engaged with SOEs on critical national development issues to ensure that they deliver on their mandates in a transparent and accountable manner in an ardent effort to mitigate fiscal risks to the government fiscal position. 

Just yesterday, we requested all SOEs to submit their debt profiles for analysis as a part of their fiscal risk assessment to support the preparation of the 2025 budget annex for the sector. The SOEs were also requested to submit to the BSE by the 20^th of September their budget proposals for 2025 for analysis, consolidation, and submission to the MFDP based on the request of the Department of Budget at the MFDP.

LADIES AND GENTLEMEN OF THE PRESS AND THE PUBLIC

Over the past few days, there have been speculations in the public about the BSE receiving a mandate from the President of the Republic of Liberia to review the compensation packages of the management of SOEs. Let me use this opportunity to provide clarity on this issue.

The Office of the President mandated the BSE to conduct a comprehensive review of the compensation packages of SOE boards, including boards of commissioners, under the purview of the Bureau. The objective of the review was to assess the fairness, consistency, and compliance of those compensations with established guidelines and policies governing compensations extended to board members. The review was concluded and the report was submitted to the Office of the President.

Due to the current capacity challenge of the BSE, the review covered 18 out of the total of 46 operational SOEs. Of the 18 entities engaged, only 9 of them complied with the review process, including LEC, LPRC, NOCAL, LWSC, NTA, LTC, FDA, LACRA, and NASSCORP. This level of non-compliance from the SOEs speaks directly to some of the key challenges that the BSE is striving to address in the SOE sector reform initiatives by strengthening the legal, regulatory, and governance frameworks for the oversight of SOEs. 

As the BSE embarks on its sector reform journey, we also look forward to the support of all SOE stakeholders and other state actors for the effective implementation of our proposed strategic reforms to strengthen the governance and oversight of the SOE sector as a means of curbing wastes and leakages in the sector.

As you may be aware, the President issued a statement yesterday mandating the management of the BSE and GC to collaborate in formulating a comprehensive Corporate Governance Policy that would address the existing gaps and bypasses in the sector and harmonize SOEs’ operations. The President’s mandate to the BSE and GC reflects the government’s commitment to driving sector-wide reforms, ensuring efficiency, and fostering an environment of accountable governance within state enterprises. Let me say thank you to His Excellency Amb. Joseph Nyuma Boakai for the political will extended to the Bureau as we all endeavor to strengthen transparency and accountability in fostering the goals of the ARREST Agenda for Inclusive Development (AAID). 

THANK YOU.