Mchechu raises revenue ambition with Sh2trn target from state assets

DAR ES SALAAM: TANZANIA’S push to extract greater value from public investments has entered a new phase, with the Office of the Treasury Registrar (OTR) setting a Sh2trn non-tax revenue target for the 2026/27 financial year.

The ambitious target, which is above the government’s assigned projection of Sh1.79trn, comes as authorities seek to improve returns from state-owned companies and institutions while reducing pressure on the national budget.

OTR, which manages government interests in 308 public institutions and companies, says the higher target will depend on stronger performance across the public investment portfolio, particularly through increased dividends, improved efficiency and better financial management.

Treasury Registrar Nehemiah Mchechu announced the target during the Second OTR Workers’ Council meeting in Kibaha, where he said the institution must raise its performance level to match growing expectations from the government and citizens.

“To achieve our Sh2trn target for the 2026/27 financial year, we must intensify our efforts and significantly ramp up our performance,” said Mr Mchechu.

The target follows a strong financial year for OTR, which collected Sh1.327trn in non-tax revenue during 2025/26, representing a 30 per cent increase from Sh1.028trn recorded in the previous year.

Dividends from government investments were the main source of income, contributing Sh800.5bn while contributions from non-commercial public institutions accounted for Sh406bn.

Other income streams, including investment returns and other payments associated with government ownership, generated Sh121.5bn.

The latest figures underline the growing importance of public assets as a source of government revenue. However, the challenge facing OTR is not only increasing collections but also ensuring that institutions under its watch become more productive and financially sustainable.

The government currently holds investments valued at about Sh92.3trn, making the performance of state-owned institutions a key factor in Tanzania’s broader economic strategy.

Mr Mchechu said the priority now was to ensure those investments deliver visible economic benefits and contribute more significantly to national development.

“We must ensure that OTR becomes an institution with the capacity and readiness to take on greater responsibility in managing public investments and contributing to the implementation of Vision 2050,” he said.

He added that OTR must strengthen oversight, improve institutional performance, and ensure public resources are managed efficiently.

According to OTR, the move is part of President Samia Suluhu Hassan’s broader agenda to increase the contribution of non-tax revenue to government income.

The government wants non-tax revenue to account for 10 per cent of total state revenue by 2030, up from the current average of about three per cent.

Achieving that goal will require public institutions to become less dependent on government support and improve their ability to generate income from the assets they manage.

“The implementation of this commitment depends on the contribution of every one of us,” Mr Mchechu said.

The new target places renewed attention on the performance of state-owned companies and institutions, many of which have historically depended on government support despite controlling significant assets.

President Samia has repeatedly challenged public institutions to demonstrate measurable results from resources entrusted to them.

When she received Sh1.327trn in dividends and contributions from OTR at the end of June, the President said public institutions must justify their ownership of state assets through improved production, increased value creation, and stronger financial performance.

“Every institution entrusted with public assets must account for itself through tangible results, demonstrating what it has produced, the value it has created, the revenue it has generated, and the extent to which it has reduced its reliance on government funding,” President Samia said.

She cautioned that strong performance in some institutions should not mask deficiencies in others, insisting that every entity managing public resources must clearly demonstrate its economic contribution.

To support its revenue ambitions, OTR is implementing its 2026/27–2030/31 Strategic Plan, which focuses on improving governance, investment management, human resource capacity, and institutional effectiveness.

OTR Director of Planning, Research and Development Emanuel Luvanda said the new strategy would centre on strengthening performance monitoring, mobilising resources, and enhancing the management of government investments.

“This strategic plan prioritises governance, leadership, performance management, resource mobilisation, and investment oversight to ensure OTR effectively delivers on its mandate,” he said.

The plan is expected to establish a clear framework for improving OTR’s supervision of public institutions and measuring their contribution to national development.

OTR Director of Administration and Human Resource Management Chacha Marigiri said the institution would continue investing in staff development to enhance professional capacity and workplace performance.

“We remain committed to fostering a supportive environment for our employees and strengthening their skills through ongoing training and professional development,” Mr Marigiri said.

He emphasised that building a competent workforce is essential for meeting OTR’s expanding responsibilities while warning that poor performance and negligence would not be tolerated.

With government investments running into trillions of shillings, OTR’s new target goes beyond revenue collection.

It signals a shift in the government’s approach to public assets, moving them from reliance on state support towards generating sustainable returns.

State-owned institutions are now expected to improve efficiency, compete effectively, and demonstrate economic value from public ownership.