11 March 2014

Tanzania: Thumbs Up for UDA

THE government has strongly warned privatised parastatal organisations that have failed to meet their contractual obligations and the expected delivery standards.

The warning was sounded by the Deputy Minister for Transport, Dr Charles Tizeba, in Dar es Salaam over the weekend at a function, where he witnessed acquisition of 175 buses by Usafiri Dar es Salaam (UDA) Company.

UDA was among 400-plus firms then owned by the government following its decision in February 1967, to put all the strategic commercial activities of the economy under state control.

The move saw the establishment of numerous parastatal enterprises in all sectors of the economy, ranging from agriculture, finance, manufacturing, construction, tourism to transport. However, some two decades later, it turned out to be impossible for the government to manage heavy investments in parastatals without difficulties, both financial and managerial.

The heavy reliance of the parastatals on the exchequer caused a lot of concern and pressure on the need for change of policy. And in early 1992, the government initiated structural reforms that witnessed massive privatisation.

It was, however, underscored that the privatisation programme must maintain earlier goals of delivering services, including financial, transport and construction to the public.

In the words of Dr Tizeba, it is indeed encouraging to note that private firms like Simon Group, the current operators of UDA are functioning well. The company has plans to increase its fleet of buses of different types to 3,000 in the near future, where its target is to have at least 1,000 vehicles by the end of this year.

This apparently sounds to be a very tall order or overly ambitious programme for a Tanzanian firm, but so far there are signs that things are on track.

It is hoped that such firms will continue getting due support from the public, government and other relevant institutions to make it successful in the country and beyond.

The unfolding story at UDA should be taken as the beginning of major successes by former parastatals, which in 1970s and 1980s dominated many sectors of the economy, created a lot of wealth and provided jobs to thousands of people.

Important progress has so far been made in the banking and insurance industry and many others following deep involvement of the private sector.

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