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Review pacts of privatized assets

9th November 2012
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Editorial Cartoon

Recently President Jakaya Kikwete ordered beneficiaries of the privatised Basotu Wheat farms in Hanang district, Manyara Region to return to government portions of land they obtained but which they have failed to develop.

He was referring to big chunks of the arable land that once supplied almost all wheat needed by the nation, almost eliminating the need to import the food item.

The president directed the Manyara regional Commissioner to take up the matter with fellow regional leaders and submit recommendations to the government.

That is after noting that some of those who acquired the land were now earning rent on it, instead of investing resources in its bid to raise output.

This is not the first time that concern has been raised over how the privatised assets were being utilised, be they the parastatal companies producing goods and services and huge farmlands scattered.

In Dodoma, where the Parliament is in session, the issue has cropped up again after Salum Barwany, legislator for Lindi-Urban asked for the government’s assessment after implementation of the privatisation policy.

We now sadly learn that at least 64 out of 170 privatised institutions have never been operational since they were privatised.

This is a substantial number of economic assets, which if revived, could have made a huge impact on the country’s economic activity.

Lest we forget, the objective of the privatisation programme also known as Parastatal Sector Reform Programme was meant to infuse new money and technology into the entities to enable them to continue contributing to the economy in terms of goods and services, employment and revenues to the government.

As observed on many occasions, no comprehensive study has been given on the impact of these entities after some of them were privatised.

As raised in the House on Wednesday, MPs want to know what challenges were encountered in the privatisation, measures taken to address them, as well as action to be taken against those who failed to operate the privatised firms.

We learn that two ministries directly involved in the process, namely the Ministry of Agriculture, Food Security and Cooperatives and Industries and Trade are only now in the process of drawing up reports on the privatised firms seeking action against those who have violated the agreed terms of acquiring the assets.

However as observed by the Deputy Finance minister Janeth Mbene only 46 out of the 170 privatised firms observed the agreements and were running profitably.

There are weaknesses which have resulted in the situation. First of all as pointed out the whole process was not clearly thought out, let alone its execution being carried out efficiently.

Deputy Minister Mbene pointed out for example that other privatisation

contracts did not make it clear that there will be repossession should the new owner fail to stick to the terms.

Sometime back, we pointed out that one of the biggest snags that overshadowed the exercise was the lack of a strong oversight mechanism to ensure that the firms and individuals who acquired the entities strictly observed the terms and conditions.

We believe the issue needs urgent action to ensure that the assets are turned into productive ventures for the benefit of the economy.

SOURCE: THE GUARDIAN
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