Can state-owned enterprises’ reforms boost growth? The case of the Democratic Republic of Congo

This paper presents a modular, bottom‑up framework linking state‑owned enterprise (SOE) financial risks to macroeconomic outcomes through fiscal exposure and resource misallocation. Using financial ratios and credit risk metrics, SOE distress is translated into expected fiscal costs and mapped to total factor productivity and long‑run growth. Results suggest governance reforms could deliver larger gains than wage-bill cuts. Projections rely on explicit modelling assumptions and sensitivity checks; they indicate potential pathways rather than causal effects. While applied to the Democratic Republic of Congo the modular framework could be adapted to other contexts with appropriate calibration.