The Georgian government has officially postponed a major component of its reform agenda for state-owned enterprises (SOEs), aimed at enhancing fiscal transparency and control. The change comes via a new decree issued by Finance Minister Lasha Khutsishvili, altering the timeline for the transition of SOEs to state treasury services.
The reform is part of the structural adjustments Georgia committed to under a previous International Monetary Fund (IMF) program. It aimed to reclassify and restructure the financial governance of state-owned entities, with the overarching goal of improving oversight by the Ministry of Finance.
Under the reform, SOEs were to be divided into two main categories:
- State Corporations – Large, commercially viable state-owned limited liability companies with operational independence.
- Government Sector Enterprises – Publicly owned entities, primarily offering municipal or healthcare services, which are largely dependent on state or municipal funding.
The majority of SOEs fall into the second category.
Initially, under a July 2023 order, at least 160 SOEs were required to switch to treasury services by July 1, 2025. However, the new decree significantly pushes back this timeline:
- By January 1, 2026, no fewer than 90 SOEs must be integrated into the treasury system.
- The final deadline for full transition of all qualifying enterprises is now set for January 1, 2027.
This extension affects both state corporations and government sector enterprises. In total, 52 companies are categorized as state corporations, while 325 fall under the government sector.
The reform is seen as a critical measure to ensure fiscal accountability and efficiency in the management of public assets. Bringing SOEs under treasury services would allow the Ministry of Finance to more closely monitor expenditures, revenues, and liquidity risks associated with these entities.
While no official explanation has been provided for the postponement, the complexity of transitioning over 300 enterprises and aligning them with the state’s financial systems is believed to be a contributing factor.
The reform's delay marks a shift in the pace of public sector restructuring, but the government maintains its long-term commitment to improving SOE governance.
