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Facing imminent redundancies and administrative change, at least two
commercial parastatals censured for operating under losses have blamed
their poor performance on a lack of investment capital.
In separate interviews conducted by The Guardian management at both
Tanzania Telecommunication Company Limited (TTCL) and Tanzania and Zambia
Railway Authority (TAZARA) said they are determined to improve their
performance but they need capital to do so.
TTCL’s Public Relations Manager Nicodemus Mushi said a major reason behind
the company’s inefficiency is lack of capital; “we fail to invest in the
expansion of communication infrastructure among other things,” he said.
Mushi went on to note that the lack of funds has also made it difficult for
the company to repair old infrastructure and invest in new technology such
as introducing new products in the market like mobile phones and mobile
banking.
He noted that with 1557 employees countrywide, the firm has been operating
‘out of pocket’ despite its minimal profit.
However Mushi admitted that TTCL has been permitted by the government to
use its assets to seek loans from financial institutions to improve its
operations.
“We are going to use this opportunity well to ensure that the funds
obtained are invested in areas that will help boost the company’s
performance and cope with our market competitors,” he said and seized the
opportunity to announce that TTCL internet services will soon have 4G
speed.
Sharing similar concerns, Tanzania and Zambia Railway Authority (TAZARA)
Regional General Manager Fuad Abdallah said his company is failing to
attain its goals due to a lack of funds to reinvest in the increase of
locomotive engines and wagons.
He admitted to operating at a loss citing current operational costs at
Tazara stand at 43bn/- per annum compared to the company’s income per year
which is only 12bn/-.
According to him, losses at Tazara have ‘historical reasons’ and that,
“...the situation can be improved if the government will disburse USD 450
million to support operations.”
“Unless the government disburses the funds, nothing can be done,” he said
citing a need of at least 75 more locomotive engines estimated to cost USD
260 million.
“With these engines, the company can transport 1.3 million tonnes of cargo
per year compared to less than 100,000 being transported now,” he said and
admitted that the company has accumulated huge debts but fell short of
specifying any figures.
In this unfolding saga, on Monday, President John Magufuli banned subsidies
for commercial parastatals and limited the board meetings they are allowed
to have annually. He also banned MPs’ allowances when they visit state-
owned firms.
The Head of State also directed all public parastatals to end the endemic
losses they currently incur and their chronic dependency on subsidies.
The President also ordered them to conduct statutory auditing every year
and to ensure proper management of funds.
Speaking at a conference that brought together the commercial parastatals,
CEO’s and board chairs in, the Finance Ministry’s Treasury Registrar,
Lawrence Mafuru said the President wants to ensure that all the loopholes
that lead to loss of public funds are plugged.
Under the theme: ‘Strengthening the oversight of public institutions and
statutory corporations in Tanzania,’ the conference aimed at reminding the
management at the parastatal of their roles and to emphasize good
governance, accountability and performance management.
He further said the number of parastatal board meetings should no longer
exceed four per annum and announced scrap of board allowances.
He said public institutions and corporations have been a big burden to the
government contributing to the rise of national debt every year.
“It is not fair for the corporations to depend on the government even to
pay salaries and statutory dues of its workers while they should have been
paying themselves,’ he said.
SOURCE: THE GUARDIAN
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