Why public entities need a new performance yardstick
DAR ES SALAAM: THE government’s decision to broaden the way public institutions are assessed is both timely and necessary. As the value of state investments continues to grow, measuring performance through dividends alone is no longer sufficient.
Public institutions exist not only to generate revenue, but also to provide essential services, support economic activity, create opportunities and safeguard public resources.
The figures presented at the 2026 Chairpersons and Chief Executives Officers of Public Institutions Forum in Arusha demonstrate the scale of the responsibility involved.
Government investments in public institutions and companies rose from 67.95tri/- in 2020/21 to 92.28 tri/- in 2024/25, while non-tax revenue increased from 637.7bn/- to 1.327tri/- over the same period.
Such growth is encouraging, but it also raises an important question: what is the country receiving in return for these substantial investments?
Treasury Registrar Nehemiah Mchechu is, therefore, right to call for a broader performance framework covering productivity, service quality, efficient use of resources, financial resilience, innovation, technology adoption and competitiveness.
These indicators can provide a more complete picture of whether public entities are fulfilling their responsibilities.
A public institution that pays substantial dividends but provides poor services, wastes resources or fails to modernise cannot necessarily be described as high-performing.
Conversely, an institution whose wider economic and social contribution is substantial may not always be adequately assessed by the amount of money it transfers to the Treasury.
The challenge, however, will be ensuring that the broader yardstick does not become an excuse for weak financial discipline.
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Dividends, profitability and financial sustainability remain important indicators, particularly where public entities operate commercially.
What is needed is a balanced system that measures both financial performance and public value. Parliament’s call for greater efficiency, accountability and measurable results should therefore be taken seriously. Increased investment must translate into tangible benefits for citizens.
This is particularly important as Tanzania seeks to implement Dira 2050 and mobilise 477tri/- under the Fourth Five-Year Development Plan, with the private sector expected to provide 70 per cent of investment. Public sector on the other hand is required to contribute the remaining 30 per cent.
In such a scenario, the public institutions must help create the infrastructure, services and business environment necessary for that investment to succeed. The real test of public investment should ultimately be whether it strengthens the economy, improves services and expands opportunities for Tanzanians.
A broader performance yardstick, backed by transparent targets and regular public reporting, can help ensure that state institutions deliver on that responsibility.
