Fiscal and Monetary Burden of Tanzania’s Corporate Bodies:The Case of Public Enterprises

The study is presented in two main sections. The first section tackles theoretical issues within the fiscal and monetary framework. The second section presents research findings on how public enterprises influence fiscal and monetary policy, In the case of Tanzania, since this influence has been more negative than positive, we therefore term it budgetary burden. Public enterprises (PEs) have played a dominant role in Tanzania's socio-economic development. However, these enterprises have contributed significantly to economic crises presently facing the country. Precisely, they have been a fiscal and monetary burden to the economy. The main objective of this study is to analyse and make some initial attempts in assessing the magnitude of the burden. To achieve this, it became necessary to collect data of macro-nature at various focal points, namely Ministry of Finance, Tanzania Audit Corporations and various Holding Corporations. These institutions do have consolidated, although rather scanty, data on most of the PEs. The analysis did indicate that the public enterprises have contributed significantly in suffocating the efforts of improving Tanzania's fiscal and monetary aggregates. Consequently, the major recommendation arising from this study is the need to redefine afresh the role of public and private sector in the national economy with the ultimate objective of commercialising and privatising the public enterprises.

The Accountability and Corporate Disclosure Practices in Tanzania

There is a general agreement that disclosure practices are not random. Yet, knowledge of the factors which they are associated with is far from perfect, particularly in the developing world where the literature in this area is sparse. Developing countries environments are significantly different from the market economies of the west. There is a general lack of effective enforcement system, active stock exchanges and appropriate accounting regulation and training schemes. In order to study corporate disclosure practices and the factors with which they are associated in Tanzania, a random sample of 58 profit-motivated companies was selected and their CARs obtained. The study focused on the 1986 CARs, although, due to data availability problems, CARs for the years 1985-1987 were examined. The four measures of the quality of corporate disclosure were examined. These are the extent of mandatory disclosures, the extent of voluntary disclosures, the timeliness of these disclosures and type of audit opinions. Two indexes were constructed in order to capture the extent of corporate disclosures. One was based on disclosure requirements as stipulated by the National Board of Accountants and Auditors (NBAA) and the Companies Ordinance. The other evolved from a literature review and was refined through interviews conducted in Tanzania. It contains the items considered desirable given the environment but are not prescribed requirements. The timeliness of disclosure was captured by the period between the end of accounting period and the signing of audit report in months. The five possible types of audit opinion were ranked from one (negative opinion) to five (clean opinion). It was observed that, in general, the quality of disclosure practices in Tanzania is unsatisfactory. On the average, the extent of mandatory disclosure is only 50.5%. The average reporting time is 8.1 months, well beyond the legal requirement of six months. It was observed, however, that most CARs receive clean audit reports. Using Spearman's rank order correlation test, Mann-Whitney test, Kruskal-Wallis test and chi2-test, it is revealed that: While the extent of mandatory information disclosure may be used as a proxy for the extent of voluntary information disclosure and vice versa, it is also necessary to examine the timeliness of disclosures and types of audit opinion if conclusions on quality of corporate disclosures are to be drawn. The four measure of quality of corporate information disclosures are associated with different corporate attributes. While types of audit opinion were found to be negatively associated to P/E ratio; timeliness of disclosures were associated jointly to P/T ratio and current ratio, and voluntary disclosures related to asset size and type of accounting firms providing audit services, it was not clear whether timeliness of disclosure is also related jointly to type of corporate governance or type of audit firms. It was also not clear whether the extent of mandatory disclosures is related jointly to type of corporate governance and type of audit firms or just to one of the two factors. The overall explanation of the observed unsatisfactory disclosure practices resulting from the findings of this study is the failure to stimulate demand for accounting information. While disclosure regulatory approach appropriate only to market economies was adopted in Tanzania, the conditions which make it meaningful were not found in Tanzania. Thus, for example, effective financial press, stock exchange and financial analysts are all lacking. More significantly, It was observed that participants in corporate governance in Tanzania do not base the decisions on accounting information

Non-market controls and the accountability of public enterprises in Tanzania

Published in cooperation with the Institute of Social Studie

The role of public enterprises in development in eastern Africa

The Papers presented here were prepared for a Conference on The Role of Public Enterprises in Development in Eastern Africa, held at the Institute for Development Studies from 4 - 7 November 1980. The purpose of the Conference was to make an assessment of the research done so farcin the field in Eastern Africa, to analyse and compare the role of public enterprises and their problem in the countries of Eastern Africa and to give the participating researches some orientation for their further research and bring activities. The Conference outlined background, Powers and Objectives of Male participation and focussed on the analysis of constructions of public enterprises to economic development. Other section of the Conference dealt with the control aspect and the autonomy of public enterprises and work analyses for an improved performance. The participants were mainly researches from Kenya, Uganda, Tanzania and Ethiopia, but also from local officials and managers from public enterprises working in Kenya

Air transport in Africa: A portrait of capacity and competition in various market segments

Sub-Saharan Africa's air transport, though low in overall volume when compared to other regions in the world, has experienced significant growth in the last decade, both in international and domestic traffic. The sector, in part because of its relatively small size, still faces the challenges of high concentration in services and lack of competition, with only a few dominant airlines providing international services within the continent. In addition, Africa faces challenges in safety oversight, as well as having many smaller non-viable state-owned carriers

Water operator partnerships as a model to achieve the Millenium Development Goals for water supply? Lessons from four cities in Mozambique

In the void left by the declining popularity of public-private partnerships, the concept of ‘water operator partnerships’ (WOPs) has increasingly been promoted as an alternative for improving water services provision in developing countries. This paper assesses the potential of such partnerships as a ‘model’ for contributing to the MDGs, by focusing on 4 water utilities in Mozambique. Although, the study found these partnerships to be successful, it is more sceptical about the potential for this type of water operator partnership to significantly contribute towards achieving the MDGs. The main reason for this is that the replicability of the partnership-model studied in Mozambique was found to be quite limited. The case presented in this article highlights 3 main lessons for water operator partnerships in the water services sector. First, the availability of investment funds is a crucial component of a partnership. Without access to such funds the impact of such a partnership is likely to be limited. Secondly, the level of commitment to the partnership needs to be high if it is to be successful. This commitment is likely to take shape in the form of both financial commitment as well as commitment of time and effort of the organisations involved. Thirdly, even if the partnership is a success, the question of how sustainable the achieved performance gains are remains a point of concern. All in all, although we acknowledge the success achieved by the studied partnership, the findings have made us hesitant about the potential for replicating this ‘model’ at a large scale.Keywords: partnerships, Millennium Development Goals, water supply, Mozambiqu

Negotiating Social Policies in Kenya: Aid, Ethnicity and Resource Struggles

Since independence, the Kenyan state claims to have pursued the principle of equal rights as an important part of its nation-building project. At the same time, Kenya’s population is differentiated economically and politically along ethnic lines with state resources benefiting mainly those communities close to the ruling elite. At the beginning of the 21st century, important political events took place that seemed to address these inequalities. Focusing on a ten-year period from 2000–2010, this thesis examines the nature of Kenyan state–society relations through the prisms of two social policies: free primary education and HIV/AIDS prevention and care. The thesis asks: what roles have the enactment of social policies and aid within decision-making arenas played in the configuration of the contemporary Kenyan state?; and how have ethnicities and local redistribution of resources shaped negotiations within the implementation arenas