Zema Privatization Plan Targets Petrobras, Banco do Brasil
Brazil · Politics
Key Facts
—The proposal. Romeu Zema pledges to sell Petrobras and Banco do Brasil if elected president in October 2026.
—The revenue goal. Sale proceeds would fund roads, railways, waterways, and ports, not pay existing federal debt.
—The economic team. The plan is coordinated by Carlos Da Costa, a former secretary in the Bolsonaro administration.
—The inspiration. The platform is structurally modeled on Javier Milei's free-market reforms in Argentina.
—The legal hurdle. Privatizing Petrobras requires a constitutional amendment passed by Brazil's Congress.
Zema privatization of Brazil’s two largest state-owned enterprises took center stage this month as presidential pre-candidate Romeu Zema formally launched his 2026 economic platform in São Paulo.
The Zema Privatization Blueprint
Romeu Zema, the former governor of Minas Gerais state and a member of the Novo party, first floated the idea in an April 26 Instagram video. He formally presented the plan on July 18 at the 10th National Meeting of the Novo party.
The proposal calls for selling Brazilian oil giant Petrobras and lender Banco do Brasil as a starting point. Zema then aims to privatize every federal state-owned enterprise without exception.
Petrobras is the world’s largest oil producer by output and a symbol of Brazilian industrial might. Banco do Brasil, one of the country’s oldest financial institutions, holds a vast network of accounts and credit operations touching millions of citizens and businesses.
For foreign investors, these two firms are pillars of the state’s direct involvement in strategic sectors. Selling them would mark the most radical redefinition of Brazil’s economic model in decades.
Funding Infrastructure, Not Paying Bills
Zema argues that revenue from the sales must build roads, railways, waterways, and ports. He explicitly ruled out using the money to pay Brasília’s bills.
He claims the federal government spends more than it collects, creating a debt near R$9 trillion (US$1.77 trillion). Privatization, he says, would cut corruption and lower interest rates.
The distinction is crucial for his campaign narrative: he wants voters to see the sell-off as a long-term investment in the country’s notoriously bottlenecked logistics network. Brazil’s infrastructure gap has long been cited by exporters and agribusiness as a primary brake on competitiveness.
By ring-fencing the proceeds for ports and highways, Zema hopes to appeal to the powerful farm caucus and industrial sectors that lose billions annually to clogged transport routes. For expats and foreign traders, smoother logistics would directly lower the cost of moving goods from the interior to global markets.
Live Company IntelligencePetróleo Brasileiro S.A. – Petrobras — the full investor dossier
Valuation & profitability
Price & risk
$29.6452-wk high
$55.36
Revenue trend · 6y
Ownership
Dividend
Milei-Style Shock Therapy for Brazil
The economic plan is coordinated by Carlos Da Costa, a former secretary to Paulo Guedes under ex-President Jair Bolsonaro. It is structurally modeled on Argentine President Javier Milei’s aggressive free-market reforms.
Zema wants to eliminate the so-called ‘Custo Brasil,’ an estimated R$1.7 trillion (US$335 billion) annual drag on production. He blames tax complexity and high capital costs for the inefficiency.
The ‘Custo Brasil’ encapsulates the extra expenses businesses face in Brazil that they would not encounter in more efficient economies. For international companies weighing a Brazilian expansion, this cost is often the invisible wall that makes the market uncompetitive.
By invoking Milei’s name, Zema signals to investors that he would pursue a no-compromise deregulation agenda. However, Brazil’s fragmented political system requires constant negotiation with a sprawling Congress, making a pure shock-therapy approach harder to execute.
Steep Political and Legal Hurdles
The proposal has drawn sharp criticism from the left-wing Workers’ Party (PT) and other groups. They view Petrobras and Banco do Brasil as strategic national assets.
Privatizing Petrobras requires a constitutional amendment, a heavy lift without a broad coalition in Brazil’s Chamber of Deputies and Senate. The sheer size of the entities would also make any sale a complex multi-year process.
Brazil’s 1988 Constitution grants the state a monopoly over oil exploration and production, a legal shield that cannot be removed by a simple presidential decree. Amending the constitution demands a three-fifths majority in two rounds of voting in both legislative houses.
Beyond the legal text, nationalist sentiment around Petrobras runs deep across the political spectrum. The company was born from a ‘O Petróleo é Nosso’ (The Oil is Ours) campaign in the 1950s, and any attempt to sell it touches a raw cultural nerve.
What It Means for Expats and Investors
For the foreign community eyeing Brazil, a successful Zema privatization push would reshape the investment landscape overnight. A privately run Petrobras could prioritize profitability over political pricing, potentially unlocking higher dividends and attracting fresh foreign capital into the pre-salt oil fields.
A privatized Banco do Brasil might streamline lending and reduce the state’s habit of using the bank for subsidized credit programs that distort markets. For expats managing cross-border finances, a more market-oriented banking sector could simplify access to credit and investment products.
However, the transition period would likely bring volatility. The Brazilian real could swing sharply on election polls, and the timeline from a potential October 2026 victory to an actual asset sale would stretch years, filled with legal challenges and public hearings.
For tourists and short-term visitors, the immediate impact is minimal. A successful infrastructure push funded by privatization could eventually improve the airports, highways, and port terminals that make traveling and doing business in Brazil a famously endurance-testing experience.
What Happens Next
The campaign is still in its early stages, with the first round of the presidential election scheduled for October 4, 2026. Zema must first secure the Novo party’s formal nomination and then build enough national name recognition to challenge better-known figures in a crowded field.
Even if he wins, the privatization timeline would begin only after the January 2027 inauguration. The constitutional amendment process alone could consume the first year of a new government, followed by the technical work of valuing two of Latin America’s largest companies and structuring an international tender.
For now, the Zema privatization plan serves as both a campaign differentiator and a litmus test for how much appetite Brazilian voters have for radical economic change. Foreign capitals and multinational boards will be watching closely to see whether this bold promise gains traction or fades under the weight of political reality.
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Frequently Asked Questions
What is the Zema privatization plan?
It is a campaign pledge by presidential candidate Romeu Zema to sell all federal state-owned enterprises, starting with Petrobras and Banco do Brasil, to fund infrastructure. The plan was first announced in an April 26 Instagram video and formally launched on July 18 at the Novo party's national mee
ting. It is coordinated by Carlos Da Costa and modeled on Javier Milei's free-market reforms in Argentina.
Why does Romeu Zema want to privatize Petrobras?
He argues private management is more efficient and that sale proceeds should build ports and railways rather than cover government operating expenses. Zema contends that state interference links the company to political interests and resource diversion, and that privatization would help eliminate the 'Custo Brasil,' an estimated R$1.7 trillion (US$335 billion) annual drag on production caused by tax complexity and high capital costs.
Can Zema actually privatize Banco do Brasil?
It would require winning the October 2026 election and passing complex legislative changes, including a constitutional amendment for Petrobras, which faces strong political resistance. The constitutional amendment needs a three-fifths majority in both the Chamber of Deputies and Senate, a difficult threshold without a broad coalition.
Even if approved, the sheer size of these entities would make any sale a multi-year process with significant valuation and regulatory challenges.
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