Govt sets aside 1.2tri/- to rescue ailing firms

ARUSHA : PLANS of rescuing ailing parastatals could well be on course after the government set aside 1.2tri/- for the cause.

The Treasury Registrar Nehemia Mchechu on Sunday announced that the government has set aside such an amount to rescue state corporations which were struggling to remain afloat.

According to Mr Mchechu, the government, through the office of the Treasury Registrar established the special fund of bailing out the ailing firms, which is also in line with the government’s quest of reforming them.

“Lack of capital among many parastatals is crippling their operations, hence the need of setting aside the 1.2 tri/-,” explained Mr Mchechu, in his presentation on the sidelines of the ongoing Chief Executive Officers’ (CEOs) and Heads of Institutions Forum.

According to Mr Msechu, the move will see the ailing parastatals withstand competition from the private sector.

This comes a day after President Samia Suluhu Hassan challenged CEOs and Institutional Heads to run the state corporations and agencies as public entreprises, from government entreprises.

The president insisted that the move will allow Tanzanians to buy shares from the government agencies and institutions, in a bid of keeping them afloat.

Speaking here on Saturday, Dr Samia expressed concern on the sorry state of some of the state-run corporations, saying some where cash-strapped, with some on the verge of being delisted.

“We wish to see these parastatals operating on profit and contribute dividends to the government,” the President said.

However, it will not be an easy walk in the park for the parastatals to borrow from the TR’s office, according to Mr Msechu.

“There are certain criteria that we will consider and will look into before we approve any money requested by the firms,” he stated.

In the same vein, the Treasury Registrar challenged CEOs heading the state firms not to hesitate to walk into banks to borrow money, however saying that only those with viable business plans, may get a slice of the 1.2tri/-.

Mr Msechu was quick to caution the CEOs and Institutional Heads that his office will not only scrutinise their business plans, but also their performances before they head to the banks.

Mr Msechu further revealed that the Office of the Treasury Registrar has embarked on major reforms, which also include amendment of its Act and name change.

“This entails at mindset change among our CEOs and Institutional Heads, that business is no longer as usual,” he added.

In June this year, Dr Samia issued a stern warning to underperforming government parastatals, stating that they could face deregistration.

President Samia indicated that the government is currently assessing the performance of state-run corporations.

This comes as the government has invested more than 70tri/- in its State entities.

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