Indecon Consulting

[Tajikistan] – Public Finance Management / SOE

Total Value

Large (> EUR 800K)


  • indecon (lead)
  • Deloitte & Touche (member)
  • ZAB SORAINEN (member)


The purpose of the project was to support the Ministry of Finance (MoF) of TAJIKISTAN and its SOE Monitoring Department (SOEMD) with implementing its Public Finance Management Reform, as part of the Government’s larger ten-year Public Finance Management Reform Strategy. The 39 months lasting project consisted in developing a Fiscal Risk Mitigation Strategy related to state-owned enterprises (SOEs), developing an improved SOE monitoring framework, including reform of the regulatory framework concerning the MoF’s administrative powers related to monitoring the SOEs financial performance, assisting in implementation of the International Financial Reporting Standards (IFRS) at large SOEs, enhancing the capacity of the MoF by designing and delivering training on SOE corporate governance, equity valuation, the use of the electronic accounting system and in the preparation of an annual subsidy report.

Type of Services Provided

  • Assessment of SOEs financial performance, of comparable enterprises in Kazakhstan and developed economies for benchmarking;
  • Determination and valuation of the large SOEs liabilities, including contingent liabilities;
  • Developing a Statement of Fiscal Risk (SFR) related to SOEs and supporting its introduction;
  • Developing instructions on issuance of guaranties & sub-lending as part of a Risk Mitigation Strategy;
  • Developing recommendations for enhancing the SOEs monitoring framework;
  • Review of the administrative segment of the budget classification and correcting/updating list of large SOEs under monitoring;
  • Review of the current dividend policy with a view to expand its scope to capture SOEs with less than 100% state ownership;
  • Valuating of and reporting on the government contingent liabilities associated with the large SOEs;
  • Enhancing the adoption of the IFRS by large SOEs;
  • Devising an illustrative example for a consolidated Statement of Financial Positions and Statement of Financial Performance consistent with the International Public Sector Accounting Standards (IPSAS) for the whole of public sector, inclusive of selected large SOEs;
  • Conducting practical workshops to SOEs’ senior staff of the accounting department on implementation of the IFRS;
  • Conducting a workshop to government staff and SOE Management on application and effectiveness of financial ratios, including Z-score formula, for the analysis of SOEs financial performance;
  • Delivering training to the MoF staff on the evaluation of the SOEs assets.

Key achievements of the project are:

  1. Development of a Fiscal Risk Management Strategy (FRMS). On September 15, 2016, the Strategy under the title of Fiscal Risks Management Strategy (FRMS) was approved by Presidential Decree N 755;
  2. Preparation of Statements of Fiscal Risks (SFRs) for 2013, 2014 and 2015 fiscal years. They gradually enhanced disclosure on SOEs
  3. Compilation of a comprehensive list of SOEs that was non-existent before;
  4. Amendment to Dividend policy for SOEs, expanding it to SOEs with more than 50% state ownership. The proposed amendments were approved by the government (Regulation 208 signed by the President on 30 April 2016);
  5. Development of reference guides for the analysis of banks and insurance companies utilizing a set of specific financial ratios being consistent with capital adequacy and other norms recommended by the Basel Committee on Banking Supervision;
  6. Drafting a new version of the Law on State-owned enterprises (SOE Law), thus introducing a revised definition of a SOE consistent with the latest Government Financial Statistics Manual of the International Monetary Fund 2014. Further, new definitions of “control” and “economically significant prices”, based on the concepts and definitions applied in the Government Financial Statistics Manual (GFSM) 2014 of the International Monetary Fund were introduced. Application of this law has been expanded to joint stock companies and limited liability companies with a state majority ownership that were not captured by the provisions of the existing law. The draft law was submitted to the MoF and included in the MoF action plan for 2017;
  7. Drafting a Corporate Governance Code for State Enterprises defining rights and obligations for the state as shareholder;
  8. Analytical and benchmarking studies on selected five large SOEs presented and discussed with the respective management.