President John Magufuli’s ultimatum to 187 state companies

President John Magufuli receives a symbolic cheque for Sh7.21 billion from CRDB Bank board chairman Ally Laay (right) and chief executive Abdulmajid Nsekela in Dodoma yesterday when 79 state-owned entities and institutions in which the government has a stake handed over to Dr Magufuli a total of Sh1.05 trilion in shares of profits and revenues. PHOTO | CORRESPONDENT

Dar es Salaam. President John Magufuli yesterday issued a two-month ultimatum to 187 state-owned companies and institutions to deliver dividends and revenue shares or else their managements will be sacked.

Dr Magufuli made the remarks after receiving a total of Sh1.05 trillion from 79 firms and institutions in Dodoma, up from Sh842.13 billion handed over last year.

However, the Head of State described what was presented yesterday as “peanuts”, considering the government’s investment in various institutions and executive agencies.

He said the government had so far invested Sh59.6 trillion in 266 firms which are either wholly owned by the State or in which it has a stake, but only 79 contributed to the central government’s coffers in 2018/19.

“I commend and congratulate the 79 institutions which have managed to contribute today. The honeymoon is over for the remaining 187. They too should do so in the next 60 days. The chief executives and boards of entities that won’t be able to do so should consider themselves jobless after the ultimatum elapses,” said Dr Magufuli after awarding recognition certificates to the top contributors, including Tanzania Ports Authority (Sh169 billion), Gaming Board of Tanzania (Sh95 billion) and Tanzania Communications Regulatory Authority (Sh85.85 billion).

The government also received dividends from companies in which it owns shares, including NMB Bank (Sh10.49 billion), CRDB Bank (Sh7 billion), Puma Energy (Sh11 billion) and Tanzania International Petroleum Reserves Limited (Sh2.5 billion).

The government enacted miscellaneous amendments through the Finance Act, 2011 requiring public agencies to remit 15 per cent of their gross revenues to the Treasury.

The contribution of executive agencies and state firms to the Treasury has since increased from Sh161.04 billion to Sh1.05 trillion currently.

The government has also employed some measures aimed at controlling expenditure and curbing theft of funds in public institutions.

They include the introduction of an electronic payment platform for state-owned entities.

The government is also negotiating with investors in privatised firms from which it thinks it is not getting its fair share of profits.

Treasury Registrar Athumani Mbuttuka said 15 state firms had been merged into eight as part of measures to control expenditure, adding that the State had increased its shareholding in some companies, including UDART, from 49 per cent to 85 per cent.

“We are still discussing with other companies to rise our shareholding, but it is too early to name them,” he said.

Mr Mbuttuka added that the Treasury had recovered assets ranging from plots, plantations to houses that were in the possession of individuals.

Finance and Planning minister Philip Mpango said close to 70 per cent of the current Budget depends on domestic resources, which include tax and non-tax revenue.

According to him, half of the non-tax revenue estimated at Sh3.2 trillion is supposed to come from dividends and revenue sharing from public institutions, agencies and companies in which the government has a stake.

“This reminds us that our economy will be built by Tanzanians themselves. The revenue we get is the reason the government closely monitors the performance of these entities so that they can bring in more revenue to the government,” said Dr Mpango.