I followed with keen interest the deliberations of the chairmen and chief executive officers of state-owned enterprises (SOEs) at last week’s forum in Arusha. The forum’s underlying theme was to visualise how SOEs could advance Dira 2050. The central idea was that SOEs should move beyond their mandates and become high-performing contributors to national economic transformation.
Tanzania has made substantial investments in SOEs and other public enterprises. The value of government investment in public institutions and companies increased from approximately TZS 67.95 trillion in 2020/21 to TZS 92.28 trillion in 2025, an increase of 35.8%. Over the same period, dividends and other contributions to the government increased from TZS 637 billion in 2020/21 to TZS 1.327 trillion in 2025/26, an increase of 108.3%. These figures suggest that SOEs have the potential to become powerful instruments for achieving the ambitions of Dira 2050. However, to fulfil this mandate, they must meet at least five requirements.
The first requirement is to transform SOEs from predominantly administrative institutions into commercially disciplined enterprises. Dira 2050 itself calls for commercially oriented SOEs that operate transparently, profitably and autonomously, while working collaboratively with the private sector. Government ownership should not mean exemption from commercial discipline.
Second, SOEs should link their performance directly to the strategic priorities of Dira 2050. Thus, TRC, ATCL and other enterprises in the transport sector should measure reductions in logistics costs and improvements in connectivity. TANESCO, TPDC and others in the energy sector should measure their contribution to reliable and affordable power, while TADB, TIB and other institutions in the financial sector should measure their financing of productive sectors. In this way, the Office of the Treasury Registrar (OTR) would assess SOEs not only by the dividends they pay to the government but also by the wider economic value they create.
Third, SOEs should become catalysts for private-sector development rather than competitors with private businesses. Dira 2050 explicitly envisages a clearer division of investment and business activities between SOEs and the private sector, with greater collaboration between the two. SOEs should therefore use public capital to develop infrastructure and markets that enable thousands of private enterprises to invest, produce and create jobs.
Fourth, the OTR should adopt a better performance assessment system. An annual SOE Economic Efficiency Index (SEEI) could assess financial efficiency, fiscal contribution, economic multiplier effects, sustainability, governance and productivity. Boards and chief executive officers should be held accountable for measurable results, while persistent underperformance should trigger restructuring, strategic partnerships or, where appropriate, divestiture.
Finally, SOEs should operate with greater autonomy, transparency and accountability. Audited financial statements, performance contracts, procurement information, investment returns and key performance indicators should be publicly available. This would strengthen public confidence and help the government determine where scarce public capital generates the greatest developmental returns.
Elly Manjale is an economic, business and management consultant based in Arusha who writes on economic, business, social and political issues.
