Tanzania mulls fund to ease state entities’ capital woes

Dar es Salaam. The government plans to set up an investment fund in a fresh bid to address lack of capital among public institutions whose current requirements stand at Sh1.1 trillion.

This was revealed yesterday by Treasury registrar Nehemiah Mchechu during his meeting with chairpersons and heads of various government and public institutions, as well as government agencies.

He said the fund to be established within a year would be of paramount importance in raising money required for investing in various areas.

Controller and Auditor General (CAG) Charles Kichere revealed in his report released a few days ago that the operations of 16 government entities rely on loans because they have low capital compared to their actual needs.

“We are committed to addressing the financial challenge that public institutions are grappling with. Presently, some Sh1.1 trillion is required to keep things moving,” said Mr Mchechu.

In three years, he added, a total of Sh3 trillion will be required to keep the public institutions going.

However, he urged chairpersons and heads of public and government institutions and agencies to invest the money wisely.

“If we have a good sense of what we are investing, return on investment will be high and dividend to the government will be promising,” asserted Mr Mchechu.

The number of government entities and agencies, and public institutions that issued dividends to the government decreased to 150 in the 2021/22 Financial Year compared to the preceding year’s 218.

However, not all numbers were negative and this could be attested to the value of dividend under the period of review increasing from Sh637.66 billion to Sh 850.28 billion.

Despite the increase in dividend, the fact that the number of those who issued the same dwindled during the last financial year, Mr Mchechu expressed his anger with a downward trend in terms of the number of contributors to the government coffer.

“Some institutions are not contributing, this is unacceptable. You need to be proactive. You don’t need to be pushed (to pay a dividend),” said Mr Mchechu.

He said going forward, the country needed strong institutions that will be at the centre when it comes to helping the government amid unexpected disasters.

In a bid to scale up efficiency of public institutions he also urged their board chairmen and heads to have an appealing strategic and business plan.

He also directed them to have succession planning so that institutions could have right leaders in place should a change happen.

The participants of yesterday’s meeting with the Treasury Registrar commended the government’s plan on card to transform public institutions.

Tanzania Civil Aviation Authority (TCAA) director general Hamza Johari said, “I commend the government’s great strategy and vision that are meant to take us (government and public institutions) to the next level.”

However, he said, for the dream to come true, there should be a comprehensive strategy in place that will take on board all potential stakeholders from the top.

“The strategy should touch all decision makers if we are to achieve what we want to achieve,” said a soft-spoken Johari.

Tanzania Commercial Bank (TCB) board chair Edmund Mndolwa said if public and government institutions were to perform better, political interference should stop.

Dr Mndolwa called for a seminar that will bring together boards of directors’ chairmen, heads of institutions and what he called “bosses” from various ministries.

“We all need to know the demarcation of our responsibilities,” he asserted.

Air Tanzania Company Limited (ATCL) managing director and Chief Executive Officer Ladislaus Matindi echoed Dr Mndolwa’s sentiments.

“If we want to do business, let’s do business. Nothing else (that is likely to have adverse effects) is needed in between,” said Mr Matindi.

He said it was high time the country borrowed a leaf from Ethiopia, Turkey and United Arab Emirates (UAE)’s modals; they used to have strong national flag air carriers---Ethiopian Airlines, Turkish Airlines and Emirates respectively.

Occupational Safety and Health Authority (Osha) board chairperson, Dr Adelhelm Meru said for the public and government institutions to increase their efficiency, they should be well staffed.

“Financial resources alone will not do. We need investment in human capital,” urged Dr Meru.

Representing the ATCL board chair, Mr John Njawa, who is the board member, said for the government's good strategy to be fruitful, there should be political sustainability.

“In Africa we have been facing a problem of unpredictability due to the fact that new leaders have been coming with new changes and burying the initiatives of their predecessors,” said Mr Njawa.

“That is why investors view Africa as not a sustainable place for a long-term investment.”