Cyprus: Technical Assistance Report–Strengthening the Governance and Oversight of State-Owned Enterprises

IMF Staff Country Reports, September 8, 2023

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Presents Cyprus’ technical assistance report on strengthening the governance and oversight of state-owned enterprises (SOE).
Cyprus' government has implemented measures to enhance financial oversight and strengthen the governance of SOEs over several years.
The ongoing reforms have already yielded positive results.
Additional measures are needed to strengthen SOEs corporate governance and accountability practices.
Establishing and regularly updating a consolidated inventory of public entities is essential to ensure SOE accountability.
Good SOE governance requires a coordinated and sequential approach to reforms.
Coordination among various stakeholders and decision makers is paramount and calls for developing and publishing a reform strategy with benchmarks to track progress.

Need to develop a SOE ownership policy that could:
- Outline the state's ownership rationale.
- Define the roles and responsibilities of the institutions involved in SOE oversight and governance.
- Provide clarity on the objectives and guidelines for effective ownership and management of SOEs.
The policy should set clear accountability lines of respective agencies involved in the SOE ownership, governance, and oversight process.
The responsibilities of agencies would depend on the chosen ownership model the government will decide.

Develop and publish a reform strategy with benchmarks to track progress.
Establish and regularly update a consolidated inventory of public entities to support accountability.
Adopt a coordinated and sequential approach to reforms, ensuring:
- Clear role delineation among stakeholders.
- Accountability mechanisms aligned with the chosen ownership model.