Currently, the president and ministers fill the vacancies through handpicking people of their own choice, a system blamed for unaccountability and inefficiency in public offices.Finance and Economic Affairs Minister William Mgimwa said in Dar es Salaam that the government wants to reverse the system and fill the top posts in SoEs through merit based candidature to increase efficiency and productivity of public firms.
“We are heading toward merit based recruitment of top officials in public enterprises,” Dr Mgimwa told the ‘Daily News’ on the sidelines of a Corporate Governance in SoEs forum.The forum, organized by the Institute of African Leadership for Sustainable Development (Uongozi Institute) aimed at sharing experiences that encourage debate among leaders from government, the private sector and civil society.
The minister said that improving the performance of SoEs through a sound governance practices will greatly improve economic and social well-being of the country.He said: “The underperformance of SoEs results in poor returns on government capital and sometimes costs the government in terms of subsidies paid from the treasury’s coffers.”
Dr Mgimwa said that the main challenge the government faces is balancing between its responsibility to exercise ownership to achieve vision and profitability without influencing SoE management.A South Africa’s Corporate Lawyer and Lecturer, Ms Thina Siwendu, told the forum that most African SoEs and public enterprises work without clear objective and strategies while they have multiple lines of accountability and reporting.
“Decision making becomes hostage to politics of the day… (while) accountability is diffused in confused roles,” Ms Siwendu, a founding partner and CEO of Siwendu and Partners Inc, said.As a result, SoEs and PEs are plunged into lack of responsibility and responsive leadership amid misallocation and loss of public funds and ultimately the institutions sink into ineffectiveness.
The forum comes at a time a number of SoEs in the country are inefficient, lack of transparency, incompetence and corruption.Due to failure to deliver, state enterprises like Tanzania Electric Supply Company, Tanzania Port Authority and Tanzania Bureau of Statistics have their CEOs suspended to pave way for investigations on allegations of corruption and incompetence.
Since the country adapted the market economy about two decades ago, there has been a number of suggestions to improve the effectiveness and competencies of the SoEs and PEs.Stakeholders are pushing for common law and regulations on running the SoEs and PEs instead of leaving the parastatals to have independent policies, regulations and guidelines.