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Tanzania targets self-reliant, profitable public entities by 2050

Tanzania Sets Ambitious Goal for Self-Reliant and Profitable Public Entities by 2050

Dar es Salaam, Tanzania – In a bold move to transform its economic landscape, the Tanzanian government has unveiled a comprehensive strategy aimed at making all public entities self-reliant and profitable by the year 2050. This initiative, outlined in the recently released National Development Vision 2050, seeks to overhaul the operations of state-owned enterprises, reducing their dependence on government subsidies and positioning them as key drivers of national growth. The plan reflects a broader ambition to foster a middle-income economy characterized by efficiency, innovation, and sustainability, aligning with Tanzania's long-term aspirations for prosperity and self-sufficiency.

At the heart of this strategy is the recognition that many public entities, often referred to as parastatals, have historically struggled with financial viability. These organizations span critical sectors such as energy, transportation, agriculture, and telecommunications, and have frequently relied on budgetary allocations from the central government to cover operational deficits. According to government officials, this dependency has not only strained public finances but also hindered the entities' ability to innovate and compete in a globalized market. The push towards self-reliance is seen as essential for alleviating fiscal pressures and enabling these entities to contribute positively to the national treasury through profits and dividends.

Prime Minister Kassim Majaliwa, speaking at a recent stakeholders' forum in Dodoma, emphasized the urgency of this transformation. "By 2050, we envision a Tanzania where our public entities are not burdens but beacons of economic strength," he stated. "These organizations must evolve from being subsidy-dependent to becoming profitable ventures that generate revenue, create jobs, and drive industrial development. This is not just a policy goal; it's a national imperative for sustainable progress." Majaliwa highlighted that the government intends to implement a phased approach, starting with immediate reforms in governance, financial management, and operational efficiency.

The roadmap to 2050 is divided into several key phases. In the short term, from now until 2030, the focus will be on diagnostic assessments and restructuring. This includes conducting thorough audits of all public entities to identify inefficiencies, such as overstaffing, outdated technology, and poor revenue collection mechanisms. For instance, entities like the Tanzania Electric Supply Company (Tanesco) and the Tanzania Ports Authority (TPA) will undergo performance reviews to pinpoint areas where losses are most acute. The government plans to introduce performance-based incentives for management and staff, tying salaries and bonuses to profitability metrics.

By the mid-2030s, the strategy shifts towards capacity building and investment. This phase involves partnerships with private sector players, both domestic and international, to inject capital and expertise into these entities. Public-private partnerships (PPPs) will be encouraged, allowing for shared risks and rewards. For example, in the energy sector, Tanesco could collaborate with renewable energy firms to expand solar and wind projects, reducing reliance on imported fossil fuels and cutting costs. Similarly, the agricultural parastatals, such as the National Food Reserve Agency, might adopt modern farming techniques and value-addition processes to turn staple crops into exportable commodities, thereby boosting revenues.

A critical component of the plan is the emphasis on good governance and anti-corruption measures. Past scandals in public entities have eroded public trust and led to significant financial leakages. To address this, the government is committing to stricter oversight through bodies like the Prevention and Combating of Corruption Bureau (PCCB). Transparent procurement processes, digital tracking of finances, and regular independent audits will become mandatory. "Corruption has been a cancer eating away at our public institutions," noted Finance Minister Dr. Mwigulu Nchemba during a parliamentary session. "By enforcing accountability, we can ensure that every shilling invested yields returns for the Tanzanian people."

The vision extends beyond mere profitability to encompass social and environmental goals. Self-reliant public entities are expected to play a pivotal role in achieving the Sustainable Development Goals (SDGs), particularly in areas like poverty reduction and climate action. For instance, profitable transport entities could invest in eco-friendly infrastructure, such as electrified railways, reducing carbon emissions while improving connectivity across the country. In education and health sectors, entities like the National Health Insurance Fund could expand coverage through efficient revenue models, ensuring broader access to services without overburdening the state budget.

Economists and industry experts have largely welcomed the initiative, though they caution about potential challenges. Dr. Amani Karume, an economist at the University of Dar es Salaam, pointed out that achieving self-reliance will require substantial upfront investments. "Tanzania's public entities operate in a competitive environment with global players," he explained. "To become profitable, they need access to affordable financing, skilled labor, and supportive policies like tax incentives." Karume also stressed the importance of workforce development, suggesting vocational training programs to equip employees with modern skills in digital technologies and management.

One of the flagship examples in the plan is the revival of the Air Tanzania Company Limited (ATCL). Once plagued by losses and operational inefficiencies, ATCL has shown signs of turnaround through fleet expansion and route diversification. The government aims to replicate this model across other entities, using ATCL as a case study for how strategic investments can lead to profitability. By 2050, ATCL is projected to not only cover its costs but also contribute dividends to the national coffers, funding other development projects.

Challenges abound, however. Tanzania's economy is still grappling with external shocks, including fluctuating commodity prices, climate change impacts on agriculture, and geopolitical tensions affecting trade. Public entities in rural areas, such as those managing water and irrigation, face additional hurdles like inadequate infrastructure and low revenue bases. To mitigate these, the government is exploring innovative financing mechanisms, including green bonds and diaspora remittances, to fund the transition.

The plan also integrates with regional integration efforts, such as the East African Community (EAC) and the African Continental Free Trade Area (AfCFTA). Profitable public entities could enhance Tanzania's competitiveness in these markets, exporting goods and services while attracting foreign direct investment. For example, a self-reliant Tanzania Petroleum Development Corporation (TPDC) could leverage the country's natural gas reserves to supply energy to neighboring countries, generating foreign exchange earnings.

Public participation is another cornerstone of the strategy. The government plans to engage citizens through town hall meetings and digital platforms to gather feedback on reforms. This inclusive approach aims to build ownership and ensure that the benefits of profitable entities trickle down to ordinary Tanzanians, such as through job creation and improved service delivery.

Looking ahead, the success of this initiative could serve as a model for other African nations facing similar challenges with state-owned enterprises. By 2050, if realized, Tanzania's public entities could transform from fiscal drains into engines of growth, contributing to a GDP that is robust, diversified, and resilient. As Prime Minister Majaliwa aptly put it, "This is our journey from dependency to destiny – a self-reliant Tanzania where public institutions empower the nation."

The road to 2050 will undoubtedly test the government's resolve, but with concerted efforts in policy implementation, stakeholder collaboration, and adaptive strategies, the vision of profitable, self-reliant public entities appears within reach. This transformation promises not only economic dividends but also a stronger, more unified national identity built on efficiency and innovation. As Tanzania marches towards this milestone, the world will be watching to see how this East African powerhouse redefines the role of public enterprises in the 21st century.

Read the Full The Citizen Article at:
[ https://www.thecitizen.co.tz/tanzania/news/national/tanzania-targets-self-reliant-profitable-public-entities-by-2050-5122932 ]