The Financial Performance and Macrofinancial Implications of Large State-Owned Enterprises in Sub-Saharan Africa

Author/Editor:

Torsten Wezel ; Naly Carvalho

Publication Date:

March 18, 2022

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

Using a newly-compiled dataset of state-owned enterprises in Sub-Saharan Africa, we present aggregate information about profitability, liquidity and leverage. We find that 40 percent of the close to 300 surveyed SOEs are unprofitable, while larger firms also tend to be illiquid and overleveraged. In cross-sectional regressions we find that SOE debt stock sustainability is impacted by firms’ profitability and liquidity, while macroeconomic factors cannot be shown to matter, expect for some governance variables. Based on these findings and citing country examples, we also illustrate that weak SOE performance may have a macrofinancial impact affecting bank soundness through delinquent loan exposures.

Series:

Working Paper No. 2022/056

Subject:

Frequency:

regular

English

Publication Date:

March 18, 2022

ISBN/ISSN:

9798400202452/1018-5941

Stock No:

WPIEA2022056

Pages:

32

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