Magufuli’s latest edict? Pay up or get out

Dar es Salaam. Public entities that fail to pay ‘dividends’ to government should be deregistered – or their management should step aside.

This is the crux of President John Magufuli’s latest order to Tanzania’s treasury registrar.

In a Monday (July 23) morning speech at a public sector earnings conference in Dar es Salaam, the President said it is “unacceptable” that only 43 public entities had made payments to the government when “90 public institutions and companies are required by law to pay dividends.”

The edict comes despite a 586.9 per cent increase in public institutes’ payouts to the government in 2017/18 compared to fiscal year 2013/14.

Over the last year, government took in Sh736.36 billion in dividends from 43 public firms. In the 2013/14 period, total inflows were just Sh107.2 billion.

Nonetheless, President Magufuli believes these gains do not reflect the total payout owed to the government.  “Despite this positive trend,” he said, “government is not getting the dividends it deserves.”

According to the President, government has invested Sh49.05 trillion in public entities. That investment, he said “does not correlate with what we (government) have received in return.”

“We need money to implement various development projects and social services. The only sources for government are tax and non-tax streams, including dividends,” said President Magufuli.

Earlier, Treasury Registrar Athumani Mbuttuka had attributed low dividend payout to mismanagement and failed cost controls.

“Over half of public entities cannot pay dividends despite (this) being mandated by law.”

“This is not a good sign,” said Mr Mbuttuka. “Either they step up, or we will not spare them.”

To that end, government will be empowering Mr Mbuttuka’s office with a larger budget and a sanctioned hiring spree, according to Finance and Planning Minister Philip Mpango.

This should improve Treasury’s ability to monitor public firms, he said.

Additionally, government will figure out a way for public entities in the same verticals to share core technology, said Dr Mpango, which should lower their operating costs.

For those firms that haven’t paid their dues, time is running out.

They risk legal action, according to Dr Mpango, and their managers need to “assess themselves before severe measures are taken.”

Of those that paid their dues, three received special mentions from the Finance boss.

Tanzania Communications Regulatory Authority (TCRA), with a payout of Sh59.86 billion against a Sh30.69 billion target tops the ranks.

Hot on its heels are Ngorongoro Conservation Area (NCA) with a payout of Sh22.35 billion against a Sh13.4 billion target, and Tanzania National Parks Authority (Tanapa), which paid out Sh34.74 billion against a Sh30.69 billion target.