PRESIDENT SAMIA SAYS THERE WILL BE NO MERCY ON LOSS MAKING PUBLIC ENTITIES

BY GRACE MACHA IN ARUSHA 

President Samia Suluhu Hassan warned on Saturday that exit doors were open for loss making state entities under the coming reforms 

The new reforms will see some parastatals, in particular, capitalized with resources, merged with others or scrapped altogether.

The Office of the Treasury Registrar (OTR) will be elevated to an  authority with powers to ensure the state entities operate productively.

President Hassan,who was opening a forum of the public institutions' CEOs, said the government was not interested in closing down some of them for the sake of it unless very necessary. 

However, her government was equally not ready to continue to support those which continue to drain the public resources through making losses perennially.

There could also be some public institutions,  which may be shown the door after they have outlived their usefulness and, therefore, are no longer relevant to the economy or government structure.

The public bodies- parastatals, executive agencies under different ministries and the higher learning institutions - account for 17 percent of the jobs in the public sector.

She challenged the boards of the public institutions they headed to ensure that they operated productively and profitably. 

The state will fully support those which operate at a profit that would enable them to pay dividends and other mandatory contributions.

The parastatals which are not directly involved in revenue generating business will have to deliver impactful services expected of them efficiently.

The government, she said, has invested a whopping Sh. 73 trillion, a significant portion of the country's annual budget, the 248 public enterprises.

President told the CEOs that she would not like to see some parastatal organizations continue to get regular subsidies from the Treasury.

Under the new reforms, the parastatals would be encouraged to sell their shares to the public "so as to reduce dependency on the central government".

In Africa, the system has worked perfectly well in Ethiopia and Egypt and that it should be embraced in Tanzania to make the parastatals financially stable. 

President Hassan was addressing nearly 1,000 CEOs and other officials from about 250 state entities at the Arusha International Conference Centre (AICC).

She, however, defended some parastatal organizations, partly attributing their dismal performance to political interference. 

She cited the conservation agencies saying despite having significant financial resources, their heads are often forced to part with cash by some senior state officials.

"Conservation agencies generate billions of shillings. But they have expensive boards (of directors) and have to pay dividends", she said.

She ordered that from now on the coffers of the conservation agencies should no longer serve as cash cows for ministry officials or other public figures

The minister of State in the President's Office (Planning and Investment) Kitila Mkumbo said the public entities will remain a key sector of the economy and that they should be supported.

"Ailing public enterprises is a hindrance to national development. Such enterprises (parastatals) should either be revived or scrapped", he pointed out. 

Prof Mkumbo said the government's turn to engage the public sector in economic growth should not be seen as compromising with similar support to the private sector.

"The government is not interfering with the competitiveness of the private sector in the market. The two sides should complement each other in business development and investments", he said.

The minister noted before a fully-packed Simba Hall at the AICC that repeated outcries for reforms of some parastatals was a necessity rather than a wishful thinking. 

He said some state institutions have failed to discharge their duties such that they have lost the public trust, especially from the business community.

He cited a case at the Dar es Salaam port where an importer failed to clear his container of goods for over a month due to red tape.

According to Prof Mkumbo, the operations of the port have sucked in about 30 public bodies and seven ministries, often caught in a labyrinth of bureaucracy.

He stressed that although the ministries are tasked to monitor the performance of their respective parastatals, they should allow full autonomy to the boards and managements to run them without interference.

The Treasury Registrar Nehemiah Mchechu told CEOs of 248 public sector entities at the three day forum to get ready for reforms which are already underway.

The government has majority shares on about a half of the entities represented at the forum. He said the government has lesser shares in some of them.

"Under the reforms, we want to make some of the parastatals fully autonomous and 100 percent self reliant", Mr. Mchechu pointed out.

Business oriented or revenue generating government entities so that they can perform even better to avoid being a liability to the government.

However, the ACT Wazalendo leader Zuberi Zitto stressed that most of the parastatal organizations should be reformed no matter how they perform "to look afresh". 

He called on the government to enact new laws on the parastatals instead of merely making amendments to the existing laws.