Underperforming Public Entities In Tanzania Risk Merger Or Dissolution As Government Targets Higher Dividends

The government has warned that non-performing public entities may be merged or dissolved if they fail to improve their operations and dividend contribution.

The warning was issued on December 5, 2025, in Dar es Salaam by the Minister of State in the President’s Office – Planning and Investment, Prof Kitila Mkumbo, during his visit to the Office of the Treasury Registrar (OTR).

OTR oversees the government’s shareholding in public institutions and companies.

The Minister said some public enterprises continue to deliver low returns despite the government’s investments in them and will therefore be given a set timeframe to enhance performance.

Prof Mkumbo stated that only public institutions capable of generating dividends for the government would be maintained.

He was accompanied by Deputy Minister for Planning and Investment, Dr Pius Chaya, and the ministry’s Permanent Secretary, Dr Tausi Kida.

According to OTR, the government currently holds shares in 308 institutions and companies. Of these, 91 are commercially active, while 217 operate as non-commercial entities.

The Minister said the government expects citizens to benefit from its investment in public enterprises amounting to TZS 92.3 trillion.

In the 2024/25 financial year, OTR collected TZS 1.028 trillion in dividends from public institutions and minority-owned companies, marking the highest level of dividend collection since OTR was established.

However, the government has set a target of TZS 1.7 trillion in dividend collection for the 2025/26 financial year. OTR has committed to working towards TZS 2 trillion driven by ongoing reforms.

Prof Mkumbo said enhancing efficiency includes ensuring transparent and competitive processes in appointing executives and board members of public entities.

He noted that a stronger Public Investment Act will support improved performance in the sector and confirmed that amendments to the bill will be fast-tracked for the second reading in Parliament.

He added that the objective is to improve performance and service delivery within public enterprises to stimulate investment and ensure quality services for citizens.