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Govt reiterates plan to axe, merge underperforming public corporations

THE government has reiterated its intention to axe underperforming public corporations which are making losses as well as merging those performing similar responsibilities in efforts to heighten performance.
Minister of State, President's Office (Planning and Investment), Prof Kitila Mkumbo

DODOMA: THE government has reiterated its intention to axe underperforming public corporations which are making losses as well as merging those performing similar responsibilities in efforts to heighten performance.

The decision follows an advice offered by Members of Parliament (MPs) when debating the report tabled by the Parliamentary Investment Committee (PIC) in regard to the Controller and Auditor General (CAG) reports for the year ending June 2023.

Presenting the PIC report on Tuesday, the committee chairperson, Augustine Hole suggested that the government through the Treasury Registrar should hold responsible Managements and Boards of some State-Owned Public Entities (SOPEs) which are not contributing to the state coffers as per the requirement of the law.

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During a week-long debate on the report, legislators seconded the decision by the committee as they suggested that the SOPEs which were running on losses should be completely disbanded in order to remain with a few ones that can perform to the government’s expectations.

On Thursday, when responding to MPs concerns in the House on Thursday, the Minister of State, President’s Office (Planning and Investment), Prof Kitila Mkumbo bowed to an advice by the legislators to dissolve underperforming parastatals.

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He said that currently, the government had already drafted a Bill that will be tabled in the House. If the Bill sails through, some entities will die a natural death, with its staff being transferred to other state corporations.
Until yesterday, there were a total of 309 public institutions in the country, according to the minister.

Prof Mkumbo said the decision to merge or dissolve underperforming entities comes a few months after the government formed a team of experts to conduct an in-depth analysis of the performance of public organizations, identify practical challenges, and recommend measures to increase the productivity of the country’s development.

“There are entities that will be completely dissolved because they are making losses while those whose responsibilities are outdated or are similar to other corporations will be merged in our efforts to increase efficiency and boost performance,’’ noted the minister.

In Parliament yesterday however, Prof Mkumbo hinted that not all entities can make profit because there are others like Air Tanzania Company Limited (ATCL) which are still creating a base for business to flourish.

Others, he said, were those parastatals which ought to offer services to people for example research and Training, while others were just regulatory bodies that do not make any profit.

“Other entities are just working to facilitate investment in the country, therefore, they cannot afford to provide dividends to the treasury, instead, they can only offer contributions to the state coffers,’’ he said.

According to the minister, out of 309 public corporations, only 33 are capable of providing divided but out of 33 only nine of them were able to provide dividends.

He was quick to point out however that measures by the ministry were in place to ensure that all parastatals were abiding by the requirements of the law.