ISLAMABAD: The Finance Division has yet to complete the operationalisation of the Central Monitoring Unit (CMU) by hiring staff as required under the International Monetary Fund (IMF) Stand-by Arrangement to improve State-Owned Enterprises (SOEs) monitoring.
Sources in the Finance Ministry said the requirement process for the hiring of staff for CMU is in the process as required under the IMF programme but has not yet been completed.
However, they expressed the hope that the process would be completed very soon and first periodic report of the SOEs would be ready by end November 2023. They added that more than one round of discussions with stakeholders was held on draft SOEs policy and based on their input the policy is being finalised. They added the draft policy was almost finalised and the government would be meeting the deadline of the Fund.
Govt required to keep SOEs under MoF oversight: IMF
About the report, they said that as per practice, the government has been publishing annual report of SOEs in the past and as far as data collection, cleaning and compilation is concerned, it is a continuous process so there would be no issue to prepare and publish the first periodic report, as agreed with the IMF, by the end November 2023 for the IMF.
They added that the hiring of trained and professional staff is important for the improvement of hundreds of enterprises and this process is continuing and would be completed before end November 2023 as CMU promulgation is part of the SOEs law.
The Finance Ministry has prepared a draft SOEs policy with the objective of effectively managing the fiscal risks associated with SOEs and sought inputs from stakeholders and the general public for incorporation in the policy.
The draft policy noted that the federal government shall own or retain only those SOEs that are determined to be strategic as approved under SOE Triage. Strategic SOEs are those SOEs that (a) have such significant strategic, security, or social importance that they cannot be entrusted to only private ownership.
They added that under the draft policy, CMU shall provide financial and operational performance analysis along with recommendations to the Federal Government on all matters related to the operation, performance, and governance of SOEs, including: (a) the overall performance of SOEs; (b) performance of SOEs against their primary objectives, business goals, and financial and non-financial performance targets and benchmarks; (c) investment in, loans to, and guarantees of SOEs; (d) the risks associated with the SOE sector that could affect the State’s investment in SOEs and the State’s exposure to explicit and implicit fiscal risks associated with SOEs; (e) proposals relating to major transactions by SOEs as and when required by the Federal Government; (f) international and national best practices by SOEs for encouraging and enhancing efficiencies and service delivery, and for improving performance; and (g) maintaining data on a pool of pre-qualified individuals for consideration as directors by the Board Nomination Committee (BNC).
The CMU will maintain a database of all directors of boards of SOEs based on the board approvals by the federal government. At the end of a board member’s tenure, the line ministry/division will submit a performance evaluation of the board and its members.
The said evaluation will be maintained as a record for considering the same members to be appointed to the same or any other SOE in the future provided that such database shall not be an exclusive database for consideration of individuals as independent directors of SOEs, and individuals not included in this database shall also be considered for appointments as independent directors.
The Ministry of Finance, through the CMU, will establish a central electronic database of information on the financial and non-financial performance of every SOE.
The Ministry of Finance will ensure the hiring of professionals in the areas of corporate finance, corporate law, strategic planning and management as CMU staff members.
Copyright Business Recorder, 2023
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