Why should public entities cultivate corporate culture

ARUSHA : PLANNING and Investment Minister Prof Kitila Mkumbo has championed for public entities to cultivate a strong corporate culture, including changing the mindset of their workers to realise the envisioned reforms.

Prof Mkumbo disclosed that business as usual attitude will continue to hinder the enterprises from recording good performance, thereby negatively impacting on the economy of the country and its people.

The minister made the call on Saturday during a three-day working session that kicked off yesterday in Arusha bringing together board chairs and Chief Executive Officers (CEO’s) of public agencies, institutions and other statutory corporations.

“Non-performing entities are a great hindrance to the development of the country. It is critical for such entities to undergo immediate transformation or be removed from the list of public entities,” said Prof Mkumbo.

As the government embarks on systemic transformation, he said the reforms need to be aligned with change of mindset of the people serving in the entities.

Studies indicate that state or public owned enterprises have pivotal role to play in contributing to the country’s economic growth and the development of a country in general.

According to the World Bank, public enterprises in the world possess assets with a value of 45 trillion US dollars (2018), equivalent to half of the global gross domestic product (GDP).

Another study conducted in 2015 in 40 countries excluding China, showed state enterprises employed 9.4 million in their totality, contributing 20 per cent of investments and five per cent of all jobs.

“The major reforms being undertaken by the government are very critical as they are in line with the current global trend,” he added.

In Tanzania, before the reforms, data showed that investments accumulated a value of 73.76tri/- accounting for over a third of the gross domestic product (GDP) of the country.

Again, public entities contribute 17 per cent of all jobs within the public service and three per cent of the national budget.

“The reforms aim at ensuring increased efficiency and productivity for the entities to be able to contribute more in increasing the volume, speed and quality of service delivery among the people.

He said research show there is a close link between private sector growth and efficient performance within the public sector.

He cited research which showed that public sector’s  efficiency  by only five  per cent could  contribute by between one and five per cent to the country’s  GDP growth.

Based on this, the minister asked the private sector not to worry as the reforms being championed are not aimed at stiffening competition but rather ensuring the State claims its rightful position in bringing major development to the country.

In executing this, the measures that will be instituted by the government will neither disrupt the market economy nor create an environment for favouring the public sector.

“Transformations in the public sector are a critical area in continuing to improve the business and investment environment in promoting the private sector in the country. Such is due to the account that a non-performing public sector leads to a non-performing private sector, thus instituting measures to turn around public entities is  critical,” he maintained.

He assured the board chairs and managements that the government will continue to closely watch the performance of the enterprises but will not lay its hands on them.

“Our responsibility is to put in place strong systems for coordinating and managing the institutions including ensuring  the boards of directors  consist of  people with required expertise, patriotic and with high integrity.

“And, most importantly, we want to see our boards run our organisations professionally coupled with corporate culture which will go in line with business policies and government vision,” noted the Minister.

For his part, Prime Minister Kassim Majaliwa extended appreciation to President Samia Suluhu Hassan for coming up and instituting major strategies which aim to bring development to Tanzanians.

Such strategies include allocating time to meet with various groups to give guidance.

“I urge all government authorities and executives to implement all directives issued by the President to increase productivity,” said Mr Majaliwa.

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