Turning Dira 2050 into measurable results through strong public investments

DAR ES SALAAM: TANZANIA’S long-term development direction under Dira 2050 presents an ambitious but clear destination and that is building a competitive, productive and inclusive economy capable of sustaining prosperity for its citizens.

The success of this Dira, however, will not depend on policy statements alone, but how effectively public institutions convert national priorities into economic outcomes that can be measured in growth, investment and income.

At the centre of this transformation are State-Owned Enterprises (SOEs), which operate strategic infrastructure, manage major public assets and provide services that shape the cost and ease of doing business.

Their performance influences macroeconomic stability, fiscal sustainability and investor confidence. For this reason, strengthening oversight and performance accountability of public investments has become a key national priority.

The Office of the Treasury Registrar (OTR), as the government’s custodian of public investments, currently oversees 308 entities. Of these, 252 are Public and Statutory Corporations (PSCs), while 56 are Minority Interest Companies.

Together, these institutions manage public investments valued at 92.3tri/- a portfolio that underscores the scale of responsibility entrusted to the OTR and the strategic importance of effective supervision.

The government’s economic direction emphasises maintaining stability, strengthening fiscal discipline, mobilising innovative financing and creating an enabling environment for private sector growth while expanding regional economic engagement. All these depend significantly on the efficiency of public enterprises.

When utilities operate reliably, transport networks move goods efficiently and financial institutions expand access to capital, businesses grow and investment flourishes. Conversely, when they fail, growth slows regardless of policy incentives, highlighting why the performance of SOEs is central to national development.

Teasury Registrar Nehemiah Mchechu has, on separate occasions, emphasised the critical role of SOEs in translating national priorities into results: “State-Owned Enterprises are no longer viewed simply as service providers; they are strategic economic drivers,” said Mr Mchechu.

ALSO READ: NEVER AGAIN: Five days of chaos, years of recovery, lesson well learnt

Their efficiency, he expounded, determines the cost of doing business, investment attractiveness and ultimately the country’s growth trajectory. The OTR continues to strengthen governance and monitoring frameworks to ensure SOEs operate commercially and sustainably while safeguarding public resources.

The approach is steadily shifting from compliance-based supervision to performancebased accountability, where public enterprises are expected not only to provide services but also to generate measurable economic value and contribute to national growth. Beyond asset management, public enterprises play a critical fiscal role.

Non-tax revenue, in the form of dividends and other contributions from SOEs, strengthens the national budget and reduces reliance on external borrowing. Improved performance therefore enhances not only service delivery, but also fiscal sustainability and macroeconomic resilie

nce. The OTR has set a target of collecting 2tri/- in non-tax revenue from its public entities and minority interest companies for the current financial year (2025/26). The amount targeted for collection exceeds the current fiscal year’s goal of 1.6tri/- that the government had set for the OTR.

To safeguard public assets valued at 92.3tri/-, the OTR is reinforcing board accountability, strengthening performance contracts for Chief Executives and institutionalising risk management and reporting systems across entities. This governance shift is designed to minimise inefficiencies, address underperformance early and ensure that strategic investments are protected through transparent oversight.

These measures are critical to achieving sustainable growth, as current projections indicate a Compound Annual Growth Rate (CAGR) of 6.2 per cent over the medium term (2023– 2028). However, achieving the Dira 2050 will require sustained long-term growth of approximately 10.31 per cent annually, the CAGR necessary to meet national targets.

Achieving the long-term growth target of 10.31 per cent annually requires a coordinated effort across key sectors that drive structural transformation. Energy and minerals form the backbone of industrialisation, providing reliable power to factories and generating foreign exchange through value-added exports.

At the same time, investments in railways, ports and roads are strengthening Tanzania’s position as a regional logistics gateway for landlocked neighbours in East and Central Africa, facilitating trade and expanding market access.

Tourism continues to offer significant foreign exchange potential, with room for sustainable growth, while forestry remains a leading source of nontax revenue within the agricultural portfolio, contributing to fiscal stability. Financial services are also expanding rapidly, improving access to credit, supporting enterprise development and formalising the economy.

Meanwhile, agriculture which employs more than 65 per cent of the population holds untapped potential, where productivity improvements and agro-processing can diversify exports and raise incomes.

Together, these sectors are not just contributors to growth individually; they interact synergistically, with reliable energy and transport infrastructure enabling tourism, agriculture and industry to flourish, while financial services support investments and entrepreneurship across all sectors.

ALSO READ: CRDB, HESLB boost digital skills, repayment

This integrated approach is essential for turning Dira 2050’s into measurable economic outcomes. Mr Mchechu noted that the effectiveness of these sectors is closely linked to the performance of public enterprises that operate the enabling infrastructure.

“Public investments must crowd in private investment. When SOEs operate efficiently, they reduce risk for businesses, attract capital and stimulate economic activity across multiple sectors,” he said.

Efficient public enterprises reduce transaction costs, stabilise supply chains and provide reliable infrastructure, all of which lower investment risk. In doing so, they catalyse private capital rather than compete with it, creating a multiplier effect that accelerates industrialisation and export growth.

As regional competition for investment intensifies, the performance of public enterprises increasingly determines national competitiveness. Logistics efficiency, energy reliability and financial sector depth influence how Tanzania compares within East and Central Africa as an investment destination.

Strong SOEs therefore strengthen the country’s strategic economic positioning in the region. With a portfolio of 308 entities and public assets worth 92.3tri/- under its oversight, the OTR recognises that disciplined governance and strong performance management are not administrative exercises, they are economic imperatives.

The objective is to ensure that each public shilling invested translates into productivity gains, stronger enterprises and higher national income.

Prof Kitila Mkumbo, Minister of State in the President’s Office (Planning and Investment), said recently that in doing so, public investments are expected to become self-sustaining engines of growth rather than fiscal obligations.

“Our focus is to make sure that public resources are deployed in ways that generate measurable economic impact, strengthen enterprises and support sustainable growth,” he underscored.

On June 10, 2025, at the State House in Dar es Salaam, Mr Mchechu handed a record 1.028tri/- cheque in dividends and contributions from public entities and minority government-owned companies to President Samia Suluhu Hassan, marking the first time collections reached the trillion-shilling mark and signalling the growing returns from improved portfolio performance.

This milestone demonstrates the significant potential of wellmanaged public investments. However, sustaining and expanding such gains requires deeper institutional reform and sharper strategic direction.

“Maximising returns will require deeper reforms such as private sector partnerships, stronger international positioning and sector-specific investment strategies,” asserted Prof Mkumbo.

If fully realised, this shift could mark a decisive turning point in leveraging public assets transforming them into stronger contributors to economic growth and national prosperity.

As Tanzania advances toward its Dira 2050, the role of SOEs is evolving from custodians of national assets into engines of development.

Through strengthened oversight, transparency and accountability, public enterprises are expected to translate long-term national aspirations into measurable progress, demonstrating that sustainable growth begins with institutions that perform.

● Prepared by the Office of the Treasury Registrar