"We expect public portfolio companies to have a dividend of about five Billion CFA francs in 2017"!

The Ministry of Finance, Budget and Public Portfolio (MFBPP) has adopted a new technical body, the Directorate General of Public Portfolio (DGPP), by presidential decree of 30 December 2013.
Its animator, Lydie Oboa Oworo, an economist and accountant, accounting and finance auditor in France before returning to Congo as director of the National Oil Company of the Congo and then Permanent Secretary of the High Council of Public-Private dialogue, enlightens public opinion on the mission of this technical body in the exclusive interview below.

Press : What does "Public Portfolio" mean?
Lydie Oboa Oworo: Public Portfolio is the set of all companies and holdings in State-owned private companies.
In the present case, the State is a shareholder of commercial companies with a view to implementing a public policy aimed at the welfare of the entire population, in the same way as it builds schools, hospitals, roads...

What is your role as Director General of the Public Portfolio (DGPP)?

L. O.O: Our role is to monitor the financial performance of companies in which the State invests, to control the correct implementation of public policies and to ensure the correct application of the management rules prescribed by their managers.
Finally, we appreciate the quality of corporate governance where the State is a shareholder because quality governance conditions performance.

As is well known, the Directorate General of Public Portfolio is the technical body that assists the Minister in the discharge of its duties in the area of ​​financial supervision of public enterprises and institutions. Which companies fall under your supervisory authority?

L. O.O: Thank you for the question.
Firms that fall under the financial supervision of the ministry in charge of public portfolio are all public enterprises and those in which the State has holdings. Where the State holds the majority of the company's shares, they are referred to as public enterprises.
Where the State holds only a minority of shares, they are referred to as holdings.
To this date, the Public Portfolio has approximately 50 companies in which the State has a majority or minority shareholding.
This number depends on the creation of companies by the State.
The most well-known public companies are the National Petroleum Company of the Congo (SNPC), the National Electricity Company (SNE), the National Water Distribution Company (SNDE), the Port Autonome de Pointe-Noire (PAPN), the Port Authority of Brazzaville and Secondary Ports (PABS), the Congo-Ocean Railway (CFCO), the Equatorial Congo Airlines (ECAIR), theBanque Postale du Congo (BPC), the Banque Congolaise de l'Habitat (BCH), Congo Insurance and Reinsurance (ARC), Urban Public Transport Corporation (STPU), Congolese Lottery Management (COGELO).
In addition, the State holds interests in Societe Generale Congo (SGC), Congolaise de Banques (LCB), Crédit du Congo, Sino Congolaise pour l'Afrique (BSCA), SARIS, Airport management company (AERCO) and PEFACO hotels in Maya-Maya and Oyo (SOGEVA), authorised mining companies, etc.
The position of shareholder confers on the State the right to be represented on the boards of directors and general assemblies of these companies in order to ensure, as an administrator, the financial and socio-economic interests of the State.

Before discussing the situation of each of these companies, how is the Public Portfolio doing?
L. O.O: This question leads to many, often erroneous, allegations, which are explained by the ignorance of the philosophy of a shareholder State and certain realities of our country.
Furthermore, the overall state of the Public Portfolio cannot be described as each company presents a particular situation because of the objectives assigned to it by the Government in application of its investment doctrine.
Why does the State create companies?
First, the State must provide a quality public service that is not equitably covered by the private sector for the entire population.
This is the case for water, electricity, urban transport or the post office.
To this date, no national or international private investor is in a position to carry out necessary investments for production and provision of these services by guaranteeing the equality of all Congolese in front of the essential good concerned.

In the case of market services, better management requires that they be delivered by a company and not directly by the State.
It is at this stage that there seem to be an error of perception.
It is forgotten that this company only represents a technical arm of the State which pursues a mission of general interest and it is thought that its primary objective is to earn money like any ordinary company.
When the state builds hospitals or schools for its population, do they expect it to make money?
In the case of school financial gain is not the priority.
In the long run, the benefit to the State is assessed on the welfare of its population and the improvement of its living standards.
Thus, when the State invests in the water sector, it is also to preserve the health of its fellow citizens and their well-being.
How can we conceive that in the 21st century, access to water throughout the whole country is not possible because of the lack of private investors?
You ask me how the Public Portfolio is fairing.
Still on the case of water.
It is an industry that is highly capital-intensive, that is to say it requires very expensive investments that no private investor has made to date in Congo despite the liberalization of the sector.
Under these conditions, what should the State do?
Leaving its population without quality water, exposed to all sorts of diseases?
No, the State takes its responsibility.
And if, by adventure, a private, profit-driven company realized these investments, do you think it would not pass on the cost of the investments to the subscriber's bill?
Would the water bill still amount to 12,700 CFA francs?
Would it provide water in areas with low population density or low purchasing power where our parents live in the hinterland of Pool, Bouenza, Cuvette-Ouest or Niari?
The role of the State is to guarantee the equality of all Congolese in the public service. For this reason, the State has built hospitals, schools, and other works of general interest throughout the country.
There must therefore be water everywhere.
In these circumstances, how do you expect the SNDE to generate significant profits and return dividends to the State?
In reality, the dividends it pays to the State are not financial; they are socio-economic.
When some people consider that this company is expensive for the State budget, what about hospitals or other publicly mandated services in a country like ours where the population does not have sufficient purchasing power to access on its own resources of basic services?
However, as a shareholder state, there is no question of wasting public money.
Thus, in the general management of the public portfolio we ensure that these companies are well managed.
The second motivation of the investing State concerns companies in sectors that are strategic for State sovereignty such as petroleum exploitation, transport infrastructure, ports, airports, etc.,
Sovereignty is our economic independence.
We cannot transfer these activities to third parties.
The third investment motivation of the State concerns the implementation of a public policy: economic diversification, promotion of the private sector, access to credit for SMEs, banking of the economy, access to housing, etc.
For example, the State created the Congolese Housing Bank (BCH).
The latter is the instrument of the State enabling each Congolese to obtain funding adapted to his standard of living in order to have access to property.
Another example. When the State intends to create a company bank, it is supposed to allow any Congolese wishing to become an entrepreneur but lacking the financial means necessary to start its business to benefit from a bank guarantee and a loan.
Similarly, when the State builds 15 factories to manufacture building materials in the Maloukou Industrial Zone, it is to create among the Congolese business leaders who could gradually buy them from the State and thus become industrial barons.
Finally, the last axis of the State's financial investment relates to investments in companies inherited by the State or to counterparties in goods or services, as in the mining industry, where the mining code provides that when a mining company obtains an operating license, it grants 10% of the capital of its company to the State.

To summarize your question about the health of the Public Portfolio, I would say that in purely financial terms it could generate more dividends than it already generates.
That being the case, we are expecting about CFAF five Billion of the portfolio's revenue in 2017. In addition, public portfolio companies have about 13,000 employees, contributing significantly to national employment.
However, the Government is actively working to improve the governance of sectors and enterprises in order to increase their financial and socio-economic performance.
We cannot therefore say that the overall result is bad!

Are the Special Economic Zones (SEZs) part of the Public Portfolio?
L. O.O: SEZs, as logistical infrastructures belonging to the State, will give rise to the creation of Public and Industrial Establishments (EPICs) placed under the financial supervision of the public portfolio.

What is the nature of your collaboration?
L.O.O: To date, there is no collaboration as such, although some companies in the public portfolio, such as Maloukou's building materials manufacturing plants, are located within the Special Economic Zone of Brazzaville.

If possible, let us now examine the situation of each of the companies in the Public Portfolio, beginning with the one that makes a great noise, namely: Ecair!
L. O.O: Ecair was founded in 2010. At that time, the State wanted to highlight the country as well as its airport and hotel infrastructure.
However, the Congo was placed on the blacklist of international airlines and no plane under the Congolese flag could travel to France.
The company was thus forced to subcontract many services to technical partners whose services, which were very costly, greatly affected its operation and its financial equilibrium.
The State has met the operational and investment needs of Ecair. Then, the financial resources of the State decreased because of the decline in the price of a barrel of oil and the State was no longer able to rescue Ecair.
The company's financial situation deteriorated, leading to a temporary shutdown of its operations.
However, today we cannot put to question the will of the President of the Republic to maintain this instrument of national sovereignty in air transport.
We are currently working on resizing our company, taking into account the resources we have so far in order to resume flights in the near future.

 What is the State planning to do to save the sick businesses? Is privatization possible?
L. O.O: We are a young country, weakened by the brands of a strongly managed economy and we are gradually discovering principles of modern management of companies which we try to adapt to our specificities.
At the present stage of our development, the State must be voluntarist without calling into question our desire to promote the market economy and private initiative.
Indeed, an over-directed economy would favour welfare assistance, increase the debt of the State and its corollary fiscal pressure and impede the development of the long-awaited private sector.
We are now turning to associations with financial and technical partners who can sustain the initiatives of the State.
The opening of capital of companies where the State is the sole major shareholder or the putting into operation of public works by a reference partner is not only a means of improving the governance of our companies, but also and above all, to meet their financial needs because the State is no longer able to bear them alone.

Would you like to tell us about your tenure at the Permanent Secretariat of the High Council of Public-Private Dialogue? Would there be a difference with your new duties?
LOO: In reality there is no real difference of vision for the country, since our mission in the High-Council of Public-Private Dialogue was to identify reforms needed to improve the business environment with a view to promoting the private sector, the industrialization of the country and economic diversification in order to ultimately promote employment and sustainable growth in our country.
In the public portfolio, we are still pursuing this vision for the future of the Congo, but this time we are relying on public companies because, to date, the private sector is not able to do it alone.

What benefit does this experience at the High Council for Public-Private Dialogue afford you in your current duties?
L. O.O: It convinced me of the necessity of State involvement as a lever to the industrialization of our country
Indeed, thanks to my tenure at the High Council of Public-Private Dialogue, I realized that the Congolese private sector was not sufficiently funded to take up the challenge of industrialization of our country.

What is the exact number of companies to be created?
L. O.O: No objective is assigned to the Directorate General of Public Portfolio in these terms.

 Do you think the State has taken over because it considers that there are no economic operators in the Congo?
L. O.O: No!
You must not exaggerate.
In the market sector, the State temporarily replaces the private sector for portage to the benefit of the private sector because it has a wider financial surface.
However, our country needs private companies.
Our industrialization can only be achieved with the involvement of the private sector. The State must simply accompany it because jobs are found in companies and not in the civil service.

 Since the creation of this Directorate, what has already been achieved?
L. O.O: We have reconstituted the database of publicly-owned enterprises, by social form and sector of activity.
We regularly monitor financial performance and appreciate the quality of governance.
We participated in the creation of the Urban Transport Company, the public establishments in charge of the City of Brazzaville, the administrative and commercial complex of Mpila, etc....
We participate on the boards of some public portfolio companies.
We have been working on the restructuring of State-owned enterprises in difficulty, concessioning for optimal use of State-owned structures and outsourcing, through service contracts, public companies, as well as the legal, fiscal, social and accounting upgrading of certain companies.
We have been involved in the development of the Public-Private Partnerships Act and we are preparing the new legal framework for public portfolio companies.

Your last word to conclude our interview ...
L.O.O: The public enterprise, of which I am a true cantor, is one of the most accomplished achievements of the Improved Welfare State because it is one of the instruments dedicated to the well-being of the whole population as well as to the prosperity of our country.
Thanks to it, in a country like ours, our compatriots have access to water, electricity, decent housing, credit for their entrepreneurial dreams, and so on.
Thanks to it, our country will acquire the means of its economic independence.
Public enterprises are our collective good and therefore, we must support our businesses and involve ourselves assiduously and energetically when we work. We must also preserve them, develop them, defend them ... but above all, manage them well.
This is my mission to the public portfolio ... for the service of all.

Conducted by: Service Presse