Rising Contingent Liabilities Pose Growing Fiscal Risk: Speakers
Bangladesh’s contingent liabilities—uncertain obligations that could potentially fall on the government—have surged to Tk 6,39,782.58 crore, according to estimates from the Finance Division. A significant portion of these liabilities is linked to state-owned enterprises (SOEs), autonomous bodies, and weakly regulated asset and lease management systems. Speakers warned that if these liabilities suddenly materialise as direct government expenditure, they could deliver a severe shock to the national budget and the broader macroeconomy.
They stressed that without strong governance, an integrated digital information system, and comprehensive policy reforms, managing the risk associated with this Tk 6.39 lakh crore exposure would be extremely difficult.
These observations were made at a two-day workshop in Cox’s Bazar titled “Governance of SOEs and Autonomous Bodies: Progress Review and the Way Forward.”
Participants at the workshop noted that long-standing weaknesses in government asset management and inefficient operations of state-owned enterprises are now exerting direct pressure on the national economy. Poor oversight and ineffective lease management have significantly accelerated the growth of contingent liabilities. If left unchecked, these risks could unexpectedly transform into major fiscal burdens.
Against this backdrop, the government has introduced a new Property, Plant and Equipment (PPE) and Lease Manual aimed at strengthening governance of public assets, bringing long-term liabilities under control, and making fiscal risks more transparent.
The workshop was organised on 16–17 January under the SOE Governance Scheme of the Strengthening Public Financial Management Systems to Enable Service Delivery (SPFMS) programme of the Finance Division.
The event was attended by around 80 officials from the Finance Division, various ministries, and autonomous bodies. Additional Secretary (Budget and Macroeconomics) Md Hasanul Matin attended as the chief guest, while Additional Secretary (Budget) and National Programme Director of SPFMS Dr Ziaul Abedeen was present as special guest. The sessions were chaired by Rahima Begum, Director General (Additional Secretary) of the Monitoring Cell of the Finance Division.
In his opening remarks, Md Hasanul Matin said that inefficient management of several state-owned enterprises has led to a significant rise in contingent liabilities. He also pointed out the problem of overlapping authorities with similar mandates, which results in duplication of work and must be addressed.
“Bangladesh must return to the path of good governance in alignment with global best practices,” he said, adding that the country’s major challenges include rising debt pressure and sluggish revenue growth—issues that require coordinated, whole-of-government efforts.
Dr Ziaul Abedeen observed that in a market economy, only commercially viable SOEs should survive, but Bangladesh has deviated from this principle. “Strong political commitment is essential to reform these institutions,” he said, stressing the need to rethink the future of SOEs through sustainable business models.
Rahima Begum noted that although SOEs and autonomous bodies play an important role in the national economy, inefficiency, weak financial management, and lack of accountability have contributed to growing debt and contingent liabilities. She said the government is moving towards effective solutions through stronger audits, digital systems, and improved oversight.
The workshop featured four technical sessions.
The first session, titled “SABRE+ System: Integrated Database for SOEs and Autonomous Bodies,” was presented by Additional Director General of the Finance Division’s Monitoring Cell Md Amirul Islam and moderated by Joint Secretary of the Ministry of Shipping Md Firoz Ahmed. Speakers highlighted that SABRE+ is an integrated digital platform for storing SOE and autonomous body data. Risks arising from government guarantees, losses, and weak lease management often remain outside regular budget accounting, and without proper monitoring, these risks may suddenly translate into direct government expenditure.
The second session focused on “DCL Statements and Fiscal Risk Statements of SOEs and Autonomous Bodies.” The presentation was delivered by Director of the SOE Wing of the Finance Division Md Ibrahim Khalil and moderated by Rahima Begum. It was revealed that liabilities of 28 high-risk entities are equivalent to 1.67 percent of GDP, while liabilities of 14 extremely high-risk entities amount to 3.13 percent of GDP. Delayed audit reports, weak audit committees, shortages of professional accountants, and incomplete financial data were also identified as key concerns.
The third session, “Policies on PPE and Other Assets and Preparation of Fixed Asset Registers,” was presented by Md Firoz Ahmed and moderated by Joint Secretary of the Expenditure Management Wing Muhammad Manzurul Haque. The discussion noted that the new PPE and Lease Manual will provide clear and standardised guidelines on classification, valuation, depreciation, leasing, and transfer of government assets, aligned with international accounting standards.
The fourth and final session addressed the “SOE and Autonomous Bodies Governance Reform Strategy 2025–30,” presented by Rahima Begum and moderated by Joint Secretary of the Budget Monitoring, Evaluation and Reporting Wing Dr AKM Atiqul Haque. The proposed strategy aims to strengthen key public financial management institutions, modernise systems and processes, and enhance governance and transparency across the public sector.
Policy measures include enactment of a comprehensive SOE law, publication of an annual Fiscal Risk Statement, updating the PPE manual, strengthening corporate governance practices, and encouraging equity financing to reduce dependence on government subsidies. Institutional reforms will also focus on capacity building, expanding independent performance evaluations, introducing standardised reporting systems, and further strengthening internal audit mechanisms.
DBTech/RA/EK/OR
