MONROVIA – When President Joseph Nyuma Boakai addressed the nation on January 27, 2025, delivering his second but first major State of the Nation Address (SONA), he elaborately laid out his Legislative Agenda for the current year before the People’s Duties. Prominent of the president’s Agenda was a plan to submit for legislative ratification what is to become the State-Owned Enterprises Authority of Liberia (SEAL) towards turning these critical public entities from their age-old moribund status to a more productive ventures contributive to Government’s revenue envelop and fight against poverty. Like John the Baptist heralding the advent of Jesus Christ, the Bureau of State Enterprises (BSE), headed by its Managing Director Arthur S. Massaquoi, feeling motivated and cheerful of the President’s announced move, has taken seize of the matter, commencing the laying of the necessary building blocks started since his incumbency last year that would make straight and easy the path towards the realization of the President’s dream on SEAL and the entire state-owned enterprise sector. The Analyst reports.
President Joseph Nyuma Boakai is poised to rationalize and strengthen the country’s state-owned enterprises which, though were originally meant to improve social services, contribute to revenue efforts and help fight poverty, have turned unproductive and insolvent.
Delivering his state of the nation address Monday, January 27, the President made a proposition suggesting the preparedness by his administration to change the narratives of these public enterprises and make them more relevant.
“Looking ahead, I will be submitting new legislative proposals, including the Amended Payment Systems Act, the Liberia Insurance Regulatory Commission Act, and the Revised Code of Conduct for Public Officials,” the president said.
“Additionally, we will propose reforms for state-owned enterprises through the establishment of the State-Owned Enterprises Authority of Liberia (SEAL).”
With this, according to sources, the president will be moving towards radical transformation of the Bureau of State Enterprise (BSE), which was birthed by PRC Degree #8 into a legislated State-Owned Enterprises Authority of Liberia (SEAL).
Since the BSE was established by the Interim National Assembly Decree #8 in 1985 to provide oversight for State-Owned Enterprises (SOEs) in Liberia, its core function has been 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, 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.
Massaquoi’s Crusade to Revamp and Stabilize
President Boakai’s declarations about the BSE, and towards enacting it into the SEAL, according to informed sources, were both an animation of, and inspiration to, the current management which has been pushing critical transformative programs at the Bureau since 2024.
The Analyst has learned the President had since mandated the Director of the Bureau of State-Owned Enterprises, Arthur S. Massaquoi in April 2024 to step up enhancing oversight of State-Owned Enterprises, and re-enforce public sector transparency and accountability at State-Owned Enterprises (SOEs) by thoroughly reviewing all payments, enumerations, stipends and benefits extended to Board members, and ensuring probity, the judicious use of public resources, transparency, and accountability within the public sector.
Following a thorough review of the operations of all state-owned enterprises in the country, the BSE submitted a briefing note updating the President about its accomplishments and the state of affairs of the SOE sector which the report decried as characterized by poor management, mismanagement, inefficiency, ineffective service delivery, lack of accountability and transparency, and weak oversight mechanisms, all of which have resulted in the subpar performance of SOEs, lack of public trust in SOEs, low support of SOEs to the national budget, and high fiscal burden to the national budget.
Addressing SOE Governance Challenges
To address the numerous governance challenges that it inherited, the Massaquoi-led administration at the BSE developed a four-year reform strategy and action plan for the sector.
“The strategy prescribes the roadmap to strengthening the oversight mechanisms and achieving efficiency and effectiveness in the management and operations of SOEs,” an informed source to this paper.
The 4-year reform strategy outlined the following key reform goals that, when achieved, will strengthen the oversight and governance of SOEs.
Embedded in the key deliverables within the 4-year reform strategy, the first and foremost targeted tangible is to strengthen the legal and regulatory framework for SOE Governance by repealing the BSE Decree.
“Strengthening the legal foundation of the BSE through legislation is the first step toward realigning and enhancing the regulatory environment for the oversight of SOEs,” the BSE source further said.
“The BSE was created by Decree #8 of the Interim National Assembly (INA) in 1985, and its provisions do not conform with the realities of the challenges of SOE oversight today,” the BSE said in its Briefing Note.”
According to him the second step in strengthening the legal and regulatory framework for SOE governance is the development of SOE regulations, which entail the realignment of the foundational laws of SOEs and other SOE-related laws to address the inconsistencies and overlaps in the various laws governing SOEs.
According to the BSE Briefing Note, the second key reform goal is to develop governance and operational policies for all SOEs
Under this deliverable, the BSE said it would first develop a corporate governance policy that will address the governance gaps within the SOE Sector, including standardizing the composition and operations of boards of SOEs, enhancing board efficiency and effectiveness, improving board and management relationships, and realigning the operational policies and practices across SOEs, among other issues.
The BSE also promised to develop a standardized remuneration policy for all SOEs to curtail waste and abuse. “The development of a Sector Remuneration Policy will realign and standardize the salary and benefits provided to boards, senior management, and staff of SOEs in line with the current economic realities.”
Another key governance gap that the BSE captured in its briefing note is the lack of a performance management system to clearly define SOEs’ performance expectations and service and/or contractual obligations. “A strong performance management system will allow the BSE to have an annual performance Contract with each SOE, with performance targets to encourage efficiency and effective service delivery by SOEs,” the BSE noted.
Finally, the BSE vowed to develop dividend and surplus policy guidelines that will clearly define SOEs’ contributions to the Government fiscal envelope.
Improving the Monitoring and Accountability Mechanisms for the Sector
The first step in enhancing monitoring and accountability mechanisms across SOEs, the BSE said, is to digitize the monitoring and reporting of SOEs operations and performance.
The lack of an efficient system for the timely collection, processing, and reporting of the financial and operational information of SOEs is a key institutional weakness of the BSE. The development of a cloud-based State-owned Enterprises Information System for the SOE Sector will address this weakness.
The second step in improving the monitoring and accountability mechanisms for SOEs is the strengthening of the institutional capacity of the BSE, because the institution currently lacks the required technical competence and operational capacity.
“Therefore, there is a need to improve both the human resource and logistical capacity of the BSE to ensure a more competent and influential oversight authority for SOEs,” the BSE said.
Reform Status
By July 2024, in line with the President’s mandate, the BSE began the implementation of the reforms which included the Transition of the BSE Decree to an Act.
“The BSE Act was drafted and jointly reviewed with the Governance Commission (GC) and other stakeholders. The copy of the draft BSE Act is currently at the Law Reform Commission, undergoing final legal review for submission to the Office of the President to form part of the President’s legislative agenda,” the BRE said in its briefing note.
To develop SOE Regulations and Governance and Operational Policies, the BSE has been engaged with the Governance Commission on the review of the mandate and functions of SOEs, which is the first step toward the development of the SOE Regulations, Corporate Governance Policy, and other SOE Operational Policies.
Also, a roadmap was developed by the Joint Committee of the BSE and the GC, but the process slowed down due to the lack of funding.
With regards to the development of a remuneration policy for the SOE Sector, the BSE conducted a review of the remuneration packages of board members of SOEs and prepared a comprehensive report, which was submitted to the Office of the President in July 2024.
The findings from the review of board remuneration pointed to the need for a holistic review, realignment, and standardization of the compensation packages across all SOEs.
The BSE began engagements with SOEs for the review and standardization of their salaries and benefits and was then called upon by the Special Presidential Committee for Public Sector Remuneration Reform, chaired by the Vice President and co-chaired by the Minister of Finance and Development Planning.
“As part of the Special Presidential Committee, the BSE is leading the SOE Sector Remuneration Reform and began the collection of relevant information from SOEs and other non-MAC entities in the last quarter of 2024.
“Twenty-one entities have submitted some of the documents requested by the BSE. The process slowed down due to the lack of funding, but efforts are still being made to ensure compliance of the remaining 39 plus SOEs and non-MAC entities with the process.
“After reviewing the compensation information provided by the SOEs, the BSE will come up with a comprehensive report of the findings, which will inform the development of a National Remuneration Policy for SOEs,” the report indicated.
Key ObjectivFes for 2025
The BSE says it looks forward to achieving more in its reform initiative during the current year. The Bureau’s annual agenda for 2025 which includes concluding the transition of the BSE Decree to an Act; developing the SOE Regulations; developing Corporate Governance and Operational Policies for SOEs; digitizing the collection and reporting of SOEs’ information; developing a website for the BSE to make SOEs’ information more accessible to the public; expanding the coverage of SOEs to 23 or more entities; and improving the quality of SOEs’ financial statements.
Challenges
Amidst the ongoing governance reforms for the SOE sector, the BSE has remained engaged with SOEs as it relates to monitoring the operations. However, the compliance of SOEs in terms of reporting to the BSE on their operations and performance continues to be a huge challenge, an issue that is attributable to the existing weak legal and regulatory frameworks.
“Therefore, while we are in the process of crafting the required regulatory and governance policies, the BSE needs more political support to ensure accountability from SOEs and more responsible governance and management of SOEs. Such political support will ensure that SOEs remain in check and do not operate in silos as it has been over the years,” the Massaquoi-led administration at the BSE said.
The current management team of the BSE inherited an SOE Sector characterized by poor management, mismanagement, inefficiency, ineffective service delivery, lack of accountability and transparency, and weak oversight mechanisms. These issues have, inter alia, resulted in the subpar performance of SOEs, lack of public trust in SOEs, low support of SOEs to the national budget, and high fiscal burden to the national budget.
Addressing SOE Governance Challenges
The first approach of the current management of the BSE to address the existing SOE governance challenges was to develop a 4-year reform strategy and action plan for the sector. The strategy prescribes the roadmap to strengthening the oversight mechanisms and achieving efficiency and effectiveness in the management and operations of SOEs. The 4-year reform strategy outlined the following key reform goals that, when achieved, will strengthen the oversight and governance of SOEs.
Strengthening the legal foundation of the BSE through legislation is the first step toward realigning and enhancing the regulatory environment for the oversight of SOEs. The BSE was created by Decree #8 of the Interim National Assembly (INA) in 1985, and its provisions do not conform with the realities of the challenges of SOE oversight today.
The management embarked on a serious of actions that include the development of SOE Regulations; development of Governance and Operational Policies for SOEs, improving the Monitoring and Accountability Mechanisms for the Sector, including digitizing the Monitoring and Reporting of SOEs’ Operations and Performance
Other key things entail strengthening the Institutional Capacity of the BSE which acknowledge the BSE lack of the required technical competence and operational capacity. Therefore, there is a need to improve both the human resource and logistical capacity of the BSE to ensure a more competent and influential oversight authority for SOEs, and the Transition of the BSE Decree to an Act, amongst other things.
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