Presidential Candidate Zema Puts Brazil’s Full Privatization on the Table, Targeting Petrobras, Federal Banks

Presidential candidate Romeu Zema, the former Governor of Minas Gerais, has placed one of the most consequential policy proposals in modern Brazilian politics at the center of his campaign, advocating for the full privatization of all federal state-owned enterprises (SOEs) to eliminate what he calls the "Brazil Cost." The plan is a central pillar of his platform for the center-right Novo party, making the 2026 election a clear binary choice on the future ownership of assets like the state-controlled oil giant Petrobras, the country’s largest public banks, and dozens of other federal entities. The stated goal of the massive divestiture is to use the proceeds to reduce public debt, lower interest rates, and finance a four-year acceleration of infrastructure projects across the country.

The proposal makes no exceptions for entities traditionally considered "strategic," explicitly naming Petrobras, the behemoth responsible for the majority of Brazil’s oil and gas production, along with the two largest federal financial institutions: Caixa Econômica Federal and Banco do Brasil. Zema, a businessman who was re-elected Governor in 2022 with a landslide victory, has governed Minas Gerais with a strong emphasis on fiscal austerity and privatization. His economic team has suggested an eventual government would initiate the Petrobras sale process on day one, possibly by using a Provisional Measure and even dividing the company prior to the sale.

The privatization of these specific SOEs is politically and socially explosive in Brazil. Petrobras is frequently used as a tool to control fuel prices and inflation, making its ownership a flashpoint for social policy. Banco do Brasil is the country’s oldest and largest bank, playing a critical role in financing the agricultural sector and providing credit, while Caixa Econômica Federal is the primary vehicle for social programs, managing the national lottery, the unemployment fund (FGTS), and the majority of public housing finance. To execute the plan, Zema would need to overcome significant legal hurdles, including the need for legislative approval from a majority in the National Congress, a body notorious for being resistant to selling off the largest and most politically influential state assets.

Beyond the privatization agenda, Zema's platform—registered under the name "Implacável" (Implacable)—is built on a hard-line liberal foundation that includes a range of other structural reforms. These proposals include a "definitive" new pension reform that would automatically adjust the minimum retirement age based on life expectancy to ensure the system’s sustainability, and labor flexibilization to allow for more direct agreement between employers and workers outside the established labor code. The candidate also proposes a gradual reduction of the tax burden and a withdrawal of Brazil from the BRICS group of nations, preferring a closer alignment with the Western world.

The explicit, full-scale privatization promise presents Brazil’s electorate with an unprecedented binary choice against the current Lula administration, which has halted all planned privatizations and is expanding the federal government’s role in the economy. The viability of Zema's platform, which is currently polling well among younger and business-oriented voters, will be tested by how he can convince a skeptical public that the long-term economic gains from shedding these assets outweigh the immediate loss of sovereign control over critical sectors like energy and social finance.

What it touches The proposal to privatize Petrobras (PETR4/PETR3) and Banco do Brasil (BBAS3) directly impacts the ownership risk and opportunity for publicly traded state-owned enterprises on the B3 stock exchange. While the actual sale process is far from certain and would require years of political negotiation, the platform introduces a clear, high-impact scenario that could fundamentally change the valuation and governance structure of these major assets.