DHAKA, May 21 (V7N )— Bangladesh’s state-owned enterprises (SOEs) drained nearly Tk 882 billion from the national exchequer in 2024 alone, according to a World Bank study.

The report said the worsening financial state of public enterprises has become “unsustainable” as Bangladesh grapples with falling revenue collection, slower economic growth, and mounting pressure on public finances.

It warned that growing SOE losses are diverting resources that could go to healthcare, education, and social protection.

The findings were presented today at a dissemination workshop on the report “Financial Performance and Fiscal Risk of SOEs in Bangladesh” held at Pan Pacific Sonargaon in Dhaka.

The study was conducted under the Strengthening Public Financial Management for Better Service (SPFMS) project, with support from the Policy Research Institute (PRI) of Bangladesh.

According to the study, non-financial SOEs posted a combined adjusted loss of Tk 441 billion in 2024. Total net fiscal transfers from the government — including subsidies and development funding — rose to around Tk 882 billion, equal to 1.7% of GDP.

Tanvir Ghani, Special Assistant to the Prime Minister for Investment and Capital Market affairs, attended as special guest.

Suraiya Zannath, Lead Governance Specialist and SPFMS team leader at the World Bank, outlined the study’s context and how it could guide policy and institutional reform.

Hasan Khaled Foisal, Additional Secretary, Finance Division, presented on SOEs, debt management, and the macro-fiscal outlook, while Rahima Begum, Additional Secretary, FD, gave the opening presentation on the Public Financial Management Reform Strategy 2025-2030 related to SOEs.

Henri Fortin, Lead Public Sector Specialist, WB, discussed international SOE reform experiences, and Immanuel Frank Steinhilper, Senior Governance Specialist, WB, presented global SOE trends.

Dr. Khurshid Alam, Executive Director, PRI, delivered the keynote on the financial performance and fiscal risks of Bangladesh’s SOEs.

The session was moderated by Mohammad Atikuzzaman, Senior FMS, with closing remarks by Nazmus Sadat Khan, Economist, WB.

Energy sector leads losses

The study found the energy and power sector accounted for most of the losses. The Bangladesh Power Development Board alone recorded losses exceeding Tk 444 billion in 2024, driven by high generation costs, costly capacity payments to private producers, and electricity tariffs set below production costs.

The report said politically influenced investment decisions, controversial contracts with independent power producers, and weak corporate governance have severely undermined the sector’s financial sustainability.

Other major loss-making entities include the Bangladesh Oil, Gas and Mineral Corporation, Bangladesh Rural Electrification Board, Trading Corporation of Bangladesh, and several manufacturing firms in fertilizer, sugar, and jute.

The report noted that many manufacturing SOEs continue to post persistent losses despite operating in competitive markets where private firms remain profitable.

Governance weaknesses flagged

The study also highlighted deep corporate governance weaknesses in Bangladesh’s SOE structure. It cited fragmented laws, bureaucratic control, weak oversight, and lack of financial transparency as key reasons for poor performance.

The World Bank estimates Bangladesh could potentially mobilize more than Tk 1.2 trillion in additional fiscal resources if SOEs achieved a 10% return on assets and reduced subsidy dependence.

Reform recommendations

To address the crisis, the report recommended broad reforms: restructuring commercially viable SOEs, introducing independent and professionally managed boards, strengthening financial disclosure, reducing political interference, and gradually opening monopoly sectors to competition.

END/AJ/RH