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Tanzania reviews privatised companies
Posted Saturday, January 16 2016 at 12:55
In Summary
- Now the government is seeking to update the investor shareholding structure, post-privatisation status, rehabilitation process, production capacity including processing, manufacturing or service delivery level, job creation through permanent employment and outsourced services.
- The reports are also expected to provide clear picture of profitability performance including net profits after taxes, wages, interest payments and contribution to the national economy through tax payments, dividend payments to the government where applicable and statutory contributions to pension funds.
- The government says it uncovered breaches of agreement in 49 of the privatised entities after conducting monitoring, evaluation, and scrutiny of the individual sale agreements of 177 entities.
Tanzania has issued a 30-day notice to owners of divested businesses to submit reports showing their performance, profitability and taxation status.
Registrar for the Treasury Lawrence Mafuru said the government had asked purchasers and outright owners of privatised public entities to submit the reports to his office for reassessment of the viability of the said companies.
In a notice sent to the affected companies, Mr Mafuru said that site visits and review of sale agreements had unearthed defaults on the part of purchasers.
Now the government is seeking to update the investor shareholding structure, post-privatisation status, rehabilitation process, production capacity including processing, manufacturing or service delivery level, job creation through permanent employment and outsourced services.
The reports are also expected to provide clear picture of profitability performance including net profits after taxes, wages, interest payments and contribution to the national economy through tax payments, dividend payments to the government where applicable and statutory contributions to pension funds.
Breach of agreement
Other issues the reports will clarify are salary structures as per the statutory minimum wage, benefits provided to employees over and above statutory requirements; corporate social responsibility (CSR) for the target communities and last, the key factors that have contributed to the growth or failure of the said entity in the reporting period.
The government says it uncovered breaches of agreement in 49 of the privatised entities after conducting monitoring, evaluation, and scrutiny of the individual sale agreements of 177 entities. According to Mr Mafuru, other discrepancies discovered included default in payment of purchase price (and interest) and change of use of the properties without the consent of the Treasury Registrar.
Among the 49 privatised entities in question are Mang'ula Mechanical and Machine Tools Ltd, Ubungo Spinning Mill, Keko Pharmaceutical Industries, Tanzania Pharmaceutical Industries Ltd, Biashara Consumer Services Company Ltd, and Iringa Wood Pole Treatment Plant.
Others are Ubungo Garments Ltd, the Tanzania Shoe Company Ltd, the Newala Cashewnut Processing Factory, Mtwara Cashewnut Processing Factory and Masasi Cashewnut Processing Factory.
After a review of the reports, the Treasury Office will present its findings to the Parliamentary Parastatal Organisations Committee.
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