Why government hopes public entities’ non-tax revenue will reach Sh1 trillion

“So essentially, the numbers have grown, and I believe by the end of this week, we will surpass 200. Our goal is to see whether we can reach Sh1 trillion,” said Treasury Registrar Nehemiah Mchechu during a meeting with media editors in Dar es Salaam on Monday.

He said the achievements recorded so far stem from allowing institutions the space to evaluate and improve themselves.

Underperforming entities were given time to reorganize before being held accountable.

“During this period, there were some adjustments. In certain instances, we had to push institutions so much that they resorted to cutting per diem allowances or even borrowing money just to pay dividends,” Mr Mchechu revealed.

To address this challenge, the government opted to discourage institutions from remitting dividends at the expense of their operations, only to later return seeking financial assistance.

“That is why we relaxed the process and encouraged institutions to conduct self-assessments. Those that were significantly underperforming were given time to reorganize. As a result, we now have 194 active institutions, and we expect this number to surpass 200 soon.”

Mr Mchechu noted that contributions from public institutions and enterprises have been inconsistent over the years, with numbers rising and falling unpredictably.

Between the 2021/22 and 2023/24 financial years, an average of 146 institutions equivalent to 59 percent of all public entities made consistent contributions to the Treasury.

Highlighting the impact of ongoing reforms, Mr Mchechu said that in the previous financial year, the Treasury collected Sh767 billion in total.

However, as of the same period this year even before Dividend Day collections had already reached Sh500 billion.

To meet the Sh1 trillion target, Mr Mchechu urged all institutions that have not yet submitted their dividends to do so before June 10, 2025 the official Dividend Day.

“All institutions that have not yet submitted dividends to the government must do so this week so that by Dividend Day, no entity is in default.”

He added that although the average annual growth rate of dividend contributions has been about 50 percent, the number of companies paying dividends remains relatively low.

In the 2023/24 financial year, only 17 out of 56 companies, approximately 31 percent paid dividends.

On reforms and institutional performance, Mr Mchechu underscored the importance of restructuring public institutions as a key pillar of national development.

“For the government to progress, these institutions must evolve; they are the custodians of our national resources,” he said.

Mr Mchechu emphasised the need for mind-set change across institutions

“Whether we’re talking about 194 institutions, 236, or even 252 depending on the classification there must be a fundamental shift in thinking. These assets have been entrusted to us for the benefit of the people.”

As part of the transformation process, approximately 57 institutions have been granted autonomy to operate independently in line with the goals for which they were established aiming to improve operational efficiency.

Leadership development has also been a core focus of the reform agenda.

According to Mr Mchechu, 111 chief executives of public institutions this year participated in leadership induction programmes designed to strengthen governance and improve strategic decision-making.

“Complementing this effort, the use of Key Performance Indicators (KPIs) has helped evaluate the performance of boards and management across government institutions, promoting greater accountability and results-based management.”

Mr Mchechu added that one of the ongoing reforms focuses on improving governance through a competitive selection process for board members.

“Building the capacity of board members once appointed ensures they have the necessary competence, skills, and understanding of their responsibilities is essential for performance.”

Mr Mchechu also revealed that the OTR is developing a 25-year strategic plan aligned with the government’s long-term development vision.

“This plan will outline opportunities for investment growth, strategic investment approaches, and a clear alignment with the government’s long-term direction and objectives.”