Why UTT fails to pay dividends to Tanzania government

Wednesday July 11 2018

Minister for Finance and Planning, Dr. Philip

Minister for Finance and Planning, Dr. Philip Mpango speaks at the role of state owned enterprises in implementing Industrialization Agenda meeting in Dar es Salaam yesterday. PHOTO|SAID KHAMIS 

By Gadiosa Lamtey @gadiosa2 glamtey@tz.nationmedia.com

Dar es Salaam. Two state-owned enterprises have defended themselves against their failure to pay dividends to the government, citing a few structural weaknesses within their organisations and some agreements with the government.

Yesterday, the Finance and Planning Minister Philip Mpango warned UTT- AMIS and Self Microfinance that they could be nullified for failure to issue payment of dividend to the government as demanded by the laws. But in defending the UTT- AMIS, the firm’s director for Marketing and Public Relations, Mr Daudi Mmbaga, said in 2016 they issued Sh90 million, noting however that last year they did not issue dividend because they had no board in place.

“It is this body that has the powers to do so….We don’t have problem in giving dividend to the government because it’s according to the law. However, we’ve received the directive from the minister and we will work on it,” he said.

The head of Long Recovery department, Mr Lucus Mlelwa, said the main reason for them not to issue the dividend was that the government has directed them to use the loan interest to boost the capital.

He said the institution was formed purposely to provide loans to people in rural areas with an interest rate of 11 per cent. “The government instructed us to use the profit to expand the capital but after this directive we will sit down and see how we can issue the dividend,” he said.

Mr Mlelwa said since 2015 to end of last financial year, Sh50 billion was loaned to various people in rural areas.

He said in this financial year 2018/18 the institution targeted to issue loan of more than 28 billion.

Speaking yesterday when he visited the on-going 42nd Dar es Salaam International Trade Fair (DITF) which opened on June 28 and is scheduled to close on July 13, Dr Mpango said the government was in need of money so as to implement development projects, hence when some institutions failed to fulfil their legal obligations of paying dividend to the government, they were hurting the country’s development.