Dar es Salaam. The government has issued a stern warning to underperforming public entities, saying they risk being abolished or merged if they do not 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 reporters after holding a closed-door meeting with the OTR management led by the Treasury Registrar, Mr Nehemiah Mchechu, Prof Mkumbo said it was unacceptable that some public enterprises continue to underdeliver dividends despite the substantial investments the government has made in them.
He said the government would grant the targeted institutions a specific timeframe to improve before taking the decision to merge or dissolve them where necessary.
“It is better to have a few commercial entities that generate meaningful dividends for the government,”Prof Mkumbo emphasized.
He was accompanied by 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, but only 91 are commercially active, while 217 are non-commercial.
Prof Mkumbo said the government expects Tanzanians to benefit from its 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—the highest amount ever recorded since the office was established in 1959.
However, the government believes there is still significant room for improvement.
For that reason, the government has set a target for OTR to collect Sh1.7 trillion in the 2025/26 financial year, while OTR has internally committed to aiming as high as Sh2 trillion, driven by ongoing reforms in public enterprises.
Prof Mkumbo said the government would further strengthen efficiency by ensuring that the appointment of executives and board members of public entities is conducted transparently and competitively.
“My task is to ensure we establish a robust Public Investment Act that will drive efficiency in public enterprises,” he said.
He expressed confidence that amendments to the bill would be completed swiftly, paving the way for its second reading in Parliament soon.
He added that the government’s broader goal is to transform the outlook, performance, and service delivery of public enterprises so they can offer quality services and stimulate investment.
For his part, Mr Mchechu said OTR is 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,” Mr Mchechu said.
He added that stronger oversight would increase productivity, improve the economy, and boost both tax and non-tax revenues—critical resources needed for the government to deliver public services.
