28th February 2017, Dar es Salaam – Prime Minister of the United Republic of Tanzania Hon. Kassim Majaliwa (MP) has challenged state owned enterprises to re-evaluate themselves and provide the government with recommendations to improve the business environment in order to increase their productivity and contribute better towards the implementation of the Second Five-Year National Development Plan (2016/17 – 2020/21).
Hon. Majaliwa was speaking during the official opening of the one-day meeting of Board Chairpersons and Chief Executives of public institutions which took place at Kikwete Hall, Ikulu – Dar Es Salaam, organized by UONGOZI Institute in collaboration with the Treasury Office, Ministry of Finance and Planning.
“There is a misconception that public institutions should not be doing business, and that when they actually engage in business, they must succumb to loss…This should not be the case,” said Hon. Majaliwa.
He continued, “There are many examples of public institutions all over the world who have ventured and done well in business, such as; Petrobras of Brazil, Statoil of Norway, and CNOOC of China from the oil & gas industry, who have operated with a profit and have managed to invest beyond their borders.”
Tanzania has 264 government owned institutions, he noted, 65 of them commercially driven corporations, 187 for service provision in addition to 12 regulators. Of the 65 commercially driven entities, eight of them still operate on government subsidies while 57 operate profitably.
According to Hon. Majaliwa, for the financial year 2015/16 the government received a dividend of TZS 119,202,609,969 from 16 public enterprises of which the government has shares. In addition, the government also received TZS 303,765,417,114.68 into its government basket as a contribution from 13 institutions.
“I think you will agree with me that the dependency of public institutions on the central government is decreasing and that the amount of dividends that the government is receiving from these institutions is increasing. However, I believe we still need to do a better job than what we are doing now,” said the Prime Minister.
“I hope that in your discussions, you will come up with recommendations on how to make these institutions sustainable, to grow exponentially, and overall – contribute to the national income,” stressed Hon. Majaliwa, pointing out that “innovation and proper allocation of resources” are key factors for making this possible.
The Prime Minister also noted the following government expectations from the public institutions addressing their Board Chairpersons and CEOs; 1) To identify how public institutions can contribute towards the implementation of the second five year development plan in the context of building an economy based on industrialization. 2) Recommend how public institutions can productively cooperate with each other in implementing certain projects. 3) Outline what kind of legal and structural reforms should be undertaken by government so that public institutions can overcome hindering laws and delays from civil servants and executives with a business as usual attitude. 4) Identify risks facing public institutions in participating directly in the implementation of the second five year development plan, and to recommend solutions for them. 5) Advise best methods of how to implement recommendations from the public institutions without jeopardizing the primary responsibility of the establishment of respective institutions.
On his part, the Minister for Finance and Planning, Hon. Dr. Philip Mpango also emphasized the importance of public institutions in reaching the nation’s goals.
“Public institutions are an important pillar in implementing this development plan because this public sector estate is a key player in improving social services, generating human resources with the proper expertise, building infrastructure, producing goods and providing services with good quality to contribute to government income and also foreign currency,” said Hon. Dr. Mpango.