We’re not venturing into state capitalism, says Mpango

Dodoma. The government has clarified that it does not plan to introduce ‘state capitalism’, but its current measures are aimed at bringing sanity to the way businesses are run.

The minister for Finance and Planning, Dr Philip Mpango, said here yesterday that people tend to misinterpret official calls by the government for State institutions to consider dealing with public firms.

“We’re in no way trying to promote state capitalism. Since we made a decision to shift from that form of managing the economy to a market one, we have no intention of returning to the past system,” Dr Mpango said during an event where he received a total of Sh10 billion in dividend from three companies in which the government has states.

The three firms--TPB Bank, Puma Energy Tanzania and Tanzania International Petroleum Reserves Limited (Tiper)--issued Sh1.032 billion, Sh7 billion and Sh2 billion respectively as dividend to the government from their 2016 profits.

Since the fifth phase administration came to power after the 2015 general election, there has been several statements from some senior government officials, calling upon public institutions -- or at least companies where the government has shares -- to do business amongst themselves as a way of maximising returns and increasing government tax revenue and dividend.

However, Dr Mpango said yesterday that the statement only seeks to remind the private sector to be clean whenever they deal with the government. “When we say market economy, we’re not referring to haphazard operations. We do not want to go to a private company where we will be charged something on top the actual amount. This is what we actually mean,” said Dr Mpango. The government owns 86.17 per cent stake in TPB Bank and 50 per cent in Tiper and in Puma Energy Tanzania.

This is the first time that TPB Bank has issued out dividend since Tanzania’s oldest bank was established. “For a long time, TPB Bank has been making losses but after making the necessary modifications, we started making profits in 2011 but we decided to reinvest all the profits that we registered since then. This year, we thought it wise to share the profits with shareholders,” said the TPB board chairperson, Prof Lettice Rutashobya.