For a few weeks now, several directors of large public companies have been brutally relieved of their duties: At the top of agrifood group Madar, mining producer Sonarem or transit company Serport. These announcements, often without detailed explanations, give the impression of a simple renewal of executives. In reality, they reveal a structural phenomenon: An almost permanent rotation of leaders in the public commercial sector, where CEOs succeed one another without resolving the underlying problems.

This instability is not new. It was studied in depth by the Court of Accounts in its 2022 report. What this document reveals widely exceeds the simple question of leaders: It’s the entirety of the management and oversight model of the public economic sector that is called into question.

The Court of Accounts has shown it clearly: The problem does not reside only in leaders, but in the system itself. And behind this system hides a political responsibility that the State still does not accept.

Long seen as a pillar of national economy, public commercial sector (PCS) accounts for a large share of the country’s assets. It encompasses around thirty industrial groups, banks, insurance companies, as well as actors in transit, energy, telecommunications and agrifood. According to the Court of Accounts, over 95% of public funds invested in national economy go through this sector.

An economic heavyweight, but a weak engine

Never has a sector cost so much while yielding so little. In 2018, the net value of its assets (excluding banks and insurance companies) reaches 22,378 billion dinars, and 35,321 billion when the financial sector is included. Yet its contribution to growth remains modest: Excluding hydrocarbons, the value added by public companies represents only slightly more than 3% of GDP. A paradox that, in itself, sums up the performance crisis of this strategic sector.

At first glance, the PCS looks like an industrial and financial powerhouse. In reality, 83.5% of its equity is concentrated in the energy sector (Sonatrach and Sonelgaz). The rest of the sector, though vast, carries little weight when it comes to performance. In practice, it depends on a very small core of profitable companies.

Excluding a few groups such as Sonatrach, Saidal, GICA, Cosider or Serport, most public economic companies (PEC) show low, sometimes even negative, profitability. According to the Court of Accounts, 14 out of 44 groups were operating at a loss in 2018 and over a third showed a lower financial profitability than the sector’s average. In some cases, payroll expenses swallow up 100% of the value added.

In 2018, the sector employed more than 600,000 people, with a wage bill amounting to 754 billion dinars. This payroll accounted for 50 to 52% of the value added outside the energy sector, and in some cases even more. Such rigidity stifles investment and innovation capacity.

The fragility of the PCS has led to chronic dependence on public support. Between 2003 and 2019, 1,903 billion dinars in public funds were injected to clear the debts of PECs. On top of that, 1,397 billion dinars in subsidized loans were granted to finance the modernization plans of public conglomerates. And despite this massive effort, performance failed to follow.

A bottomless pit for public finances

The return on invested capital remains negligible: In 2018, the state recovered only 0.57% in dividends on its invested capital (excluding Sonatrach and banks). Of the 250 billion dinars in dividends collected that year, 150 billion came from Sonatrach and 82 billion from banks and insurance companies. In other words, the vast majority of public enterprises bring almost nothing back to the very state that funds them.

Since 2007, 1,665 billion dinars in dividends went to the Treasury, 61% of which were generated by Sonatrach alone. The rest of the PCS, in its entirety, only paid 645 billion dinars over 14 years.

According to the Court of Accounts, 52% of PCS assets were financed through debt, that is a little over 11,500 billion dinars in 2018. For 40% of the groups, debt surpasses 70% of total resources, and for some (SNVI, IMETAL, TRANSTEV), it exceeds 90%. The State Holdings Council even reported that, in 2017, companies under ECOFIE were carrying debt levels amounting to 187% of their equity.

In this environment, a CEO’s tenure is often short-lived. Dismissals can occur without warning, sometimes without any official explanation. Leading a company becomes a high-risk position, where one may be held accountable for structural failures. This constant turnover undermines the stability of industrial projects, strategic visibility, and partners’ confidence. It also feeds a short-term culture: how can a five- or ten-year vision be built when management changes every twelve months?

This instability is rooted in a fundamental ambiguity: The state has never clarified its role. Is it a shareholder, a regulator, or a manager? This confusion translates into constant interference between economic and political decision-making. In such a system, CEOs sometimes become mere executors… or scapegoats.

What the Court of Accounts says: A damning assessment

The report of the Court of Accounts identified several major flaws.

First: The absence of a coherent strategy. Since the 1980s, the sector has gone through a succession of management frameworks: Participation funds, holdings, CNPE, CPE, shareholding management companies (SGPs), and then sectoral groups. Each reform replaced the previous one, with no continuity. The result: A piling up of structures, unclear responsibilities, and fragmented governance.

Second: The weak circulation of information. There is no centralized database, no financial consolidation, and only partial reporting of data to the State Shareholdings Council. Decision-makers are often steering blind.

Third: Unprofessional governance. Appointment criteria are unstable, boards of directors are ineffective, and accountability is limited. In many cases, competence gives way to political loyalty or administrative compromise.

Finally: Confusion over the State’s roles. The State acts simultaneously as owner, regulator, client, financier, and even competitor. This omnipresence prevents companies from operating according to a clear and stable economic logic.

The fragility of the PCS weighs heavily on the entire national economy. Investment is hindered, projects are delayed or abandoned due to the lack of a stable long-term vision. More than half of assets are financed through debt, yet less than 1% of the capital invested is actually remunerated. The sector employs over 600,000 people, making any restructuring politically sensitive and socially risky.

A matter of governance, not individuals

Replacing a CEO can calm a crisis or send a political signal. But when the obstacles are structural (unclear objectives, flawed steering mechanisms, lack of transparency) the departure of a single executive does nothing to alter the sector’s underlying trajectory. On the contrary, repeated dismissals undermine the credibility of the public sector and discourage skilled managers from pursuing a career within it.

Recent dismissals attract attention. But they are merely the visible part of a system under constant tension. The core issue is elsewhere: How to transform the public sector into a high-performing economic player that can invest, innovate and create value? The answer cannot come from replacing faces, but from changing rules.

As long as governance in the public sector remains instable, the rotation of executives will continue, and with it, the persistent difficulty of transforming these companies into engines of development.

The report of the Court of Accounts delivered a damning assessment. What remains to be seen is whether the country is ready to face its implications.

More than a question of management, the public commercial sector exposes a question of power. Who really decides the strategy of these companies? Who is held accountable when billions of dinars are poured in with no tangible results? And above all: Who takes political responsibility for this collective failure?

As long as the State continues to intervene simultaneously as a shareholder, a regulator, an employer, a banker and a referee, no management (as competent as it can be) can act on a long term. Behind every dismissal, the same pattern repeats itself: A CEO is punished, but the system is protected. Faces change, but the rules of the game do not.

What the Court truly demands: A real shift

The Court of Accounts puts words to a deep structural dysfunction and calls for a change of course. It first demands stability, an essential condition for planning, investing, and evaluating long-term performance. It also calls for greater transparency, so that decisions, results, and the use of public funds are clear and accountable. It also stresses the need for a clear, coherent, and continuous strategy that does not shift with administrative reforms or political changes.

Finally, it pleads for a clear separation of roles: The State can no longer at once be an owner, a regulator, an employer, a financer and a judge, without creating permanent conflicts of interest that paralyze any economic logic.

In other words, the Court calls for a major political choice. Should we maintain a public sector subject to circumstances, used as a temporary tool, led by disposable CEOs and financed at a loss? Or should we build a truly modern, responsible, and coherent state shareholder, capable of setting objectives, measuring results, and taking responsibility for its decisions?

The country does not lack competence, nor companies with a strong potential. What is lacking is a governance framework that protects the economic decision from political arbitrariness. Without this shift, the public commercial sector will remain the mirror of the State’s contradictions, incapable of choosing between control and performance. Never has a sector revealed so much the limits of a system. What the sector needs is not a new CEO, but a new contract between the State and the economy.