Government Issues Ultimatum to Underperforming Public Entities: Merge or Dissolve

Dar es Salaam – The government has issued a stern warning to underperforming public entities, cautioning that they risk being merged or dissolved should they fail to take urgent steps to improve their performance.

The warning was delivered on Friday, December 5, 2025, 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) in Dar es Salaam.

Speaking to journalists after a closed-door meeting with OTR management, led by Treasury Registrar Nehemiah Mchechu, Prof Mkumbo said it was unacceptable that several public enterprises continued to deliver minimal dividends despite substantial government investment.

The institutions identified as lagging would be given a specific timeframe to improve, after which the government would decide whether to merge or dissolve them.

"It is better to have fewer commercial entities that generate meaningful dividends for the government," Prof Mkumbo stressed.

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

According to OTR, the government holds shares in 308 institutions and companies. Out of this number, 91 operate commercially, while 217 are non-commercial.

Prof Mkumbo reiterated that Tanzanians must benefit from the government’s Sh92.3 trillion investment in public enterprises.

In the 2024/25 financial year, OTR collected Sh1.028 trillion in dividends from public institutions and minority-owned companies, marking the highest amount since the office was established in 1959.

However, the government maintains that the sector still holds significant untapped potential.

As part of ongoing reforms, the government has set a dividend collection target of Sh1.7 trillion for the 2025/26 financial year, while OTR has internally set a more ambitious target of Sh2 trillion.

Prof Mkumbo also pledged to enhance efficiency by ensuring that appointments of executives and board members of public entities are conducted transparently and through competitive processes.

"My task is to ensure that we establish a robust Public Investment Act that will drive efficiency in public enterprises," he said.

The government aims to transform the performance, image, and service delivery of public enterprises so they can provide quality services and stimulate investment.

Treasury Registrar Mchechu said OTR remained committed to strengthening the performance of public enterprises to boost efficiency in service delivery and investment.

"Effective supervision of public institutions and enterprises is key to reforming this sector," Mchechu noted.

He added that stronger oversight would increase productivity, strengthen the economy, and boost both tax and non-tax revenues—critical resources for the government to deliver essential public services.