Underperforming Public Institutions to Be Dissolved or Merged.

 


The Government has issued a stern warning to underperforming public institutions and agencies, saying they risk being dissolved or merged if they fail to take concrete measures to improve their performance.


The warning was issued 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 holding a closed-door meeting with the OTR management led by Treasury Registrar Nehemiah Mchechu, Prof. Mkumbo said it is unacceptable that some public entities fail to provide adequate dividends despite the Government’s substantial investments.


He said the Government will set a specific grace period for affected institutions to reform, after which it will make decisions to merge or dissolve them where necessary.


“It is better to have fewer commercial public entities that provide meaningful dividends to the Government,” emphasized Prof. Mkumbo, who was accompanied by Deputy Minister for Planning and Investment, Dr. Pius Stephen Chaya, and the Ministry’s Permanent Secretary, Dr. Tausi Kida.


According to the OTR, the Government owns shares in 308 institutions and companies — only 91 of which are commercially active, while 217 are not.


Prof. Mkumbo said the Government wants to ensure that citizens benefit from its investment of TSh 92.3 trillion in public enterprises.


During the 2024/25 financial year, the OTR collected TSh 1.028 trillion in dividends from public institutions and companies in which the Government holds minority shares — a record high since the office was established in 1959.


However, the Government believes there is still significant room for improvement.


In line with this, the Government has set a target for the OTR to collect TSh 1.7 trillion in the 2025/26 financial year, while the office itself has set an internal target of up to TSh 2 trillion through ongoing reforms in public enterprises.


Prof. Mkumbo noted that the Government is committed to further improving efficiency by ensuring that the recruitment of executives and board members of public institutions is conducted transparently and competitively.


“My task is to ensure we have a sound Public Investment Law that will drive efficiency in public enterprises,” he said.


He expressed confidence that the proposed amendments to the Bill will be concluded swiftly and tabled for the second reading in Parliament soon.


He added that the Government’s objective is to transform the structure, efficiency, and performance of public enterprises to enhance service delivery and stimulate investment.


For his part, Treasury Registrar Nehemiah Mchechu said the OTR is committed to strengthening public institutions to enhance efficiency in service delivery and investment.


“Effective oversight of the performance of public institutions and enterprises is a catalyst for reforms in this sector,” said Mchechu.


He added that stronger oversight will increase productivity, strengthen the economy, and boost both tax and non-tax revenues — which are essential for enabling the Government to carry out its responsibilities.

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