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

Abstract

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.