Tanzania plans to cut state funding for public firms
A 25-year roadmap aims to make public corporations financially self-reliant, reducing dependence on government subsidies.
Tanzania is launching a 25-year plan to make its public institutions financially independent. The Office of the Treasury Registrar (OTR) will coordinate reforms to decrease reliance on government subsidies for public and statutory corporations (PSCs). Commercial entities are expected to fund their own operations, while those providing essential services will receive appropriate support.
President Samia Suluhu Hassan has urged public institutions to improve performance and reduce their need for routine government support, particularly those receiving subsidies without delivering results. Chief Secretary Ambassador Dr Moses Kusiluka stressed the need for better revenue collection and expenditure control. An analysis of 227 PSCs shows that government subventions are the primary financing source for most, with Treasury support increasing by an average of about 15 per cent annually over three financial years.
Nearly 82 per cent of these institutions depend on government financing, with fewer than one in five operating on a self-sustaining basis. The reform framework distinguishes between recurrent and development funding, acknowledging that investments in infrastructure like water treatment plants or transport may not generate immediate revenue. The goal is to encourage stronger management and cost efficiency.
Why it mattersPublic institutions in Tanzania will need to improve their financial management and revenue generation to reduce dependence on government funding.