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| Dr Mgimwa. |
The government plans to stop appointing chairpersons and chief
executive officers of state owned enterprises (SoEs) to allow competent
individuals battle for the posts.
Currently, the president and ministers fill the vacancies through
handpicking people of their own choice, a system blamed for
unaccountability and inefficiency in public offices.
“We are heading toward merit based recruitment of top officials in
public enterprises,” Dr Mgimwa told the ‘Daily News’ on the sidelines of
a Corporate Governance in SoEs forum.
The forum, organized by the
Institute of African Leadership for Sustainable Development (Uongozi
Institute) aimed at sharing experiences that encourage debate among
leaders from government, the private sector and civil society.
The minister said that improving the performance of SoEs through a
sound governance practices will greatly improve economic and social
well-being of the country.
He said: “The underperformance of SoEs results
in poor returns on government capital and sometimes costs the
government in terms of subsidies paid from the treasury’s coffers.”
Dr Mgimwa said that the main challenge the government faces is
balancing between its responsibility to exercise ownership to achieve
vision and profitability without influencing SoE management.
A South
Africa’s Corporate Lawyer and Lecturer, Ms Thina Siwendu, told the forum
that most African SoEs and public enterprises work without clear
objective and strategies while they have multiple lines of
accountability and reporting.
“Decision making becomes hostage to politics of the day… (while)
accountability is diffused in confused roles,” Ms Siwendu, a founding
partner and CEO of Siwendu and Partners Inc, said.
As a result, SoEs and
PEs are plunged into lack of responsibility and responsive leadership
amid misallocation and loss of public funds and ultimately the
institutions sink into ineffectiveness.
The forum comes at a time a number of SoEs in the country are
inefficient, lack of transparency, incompetence and corruption.
Due to
failure to deliver, state enterprises like Tanzania Electric Supply
Company, Tanzania Port Authority and Tanzania Bureau of Statistics have
their CEOs suspended to pave way for investigations on allegations of
corruption and incompetence.
Since the country adapted the market economy about two decades ago,
there has been a number of suggestions to improve the effectiveness and
competencies of the SoEs and PEs.
Stakeholders are pushing for common law
and regulations on running the SoEs and PEs instead of leaving the
parastatals to have independent policies, regulations and guidelines.
Source: The Daily News,http://www.dailynews.co.tz, reported by Abduel Elinaza
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