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For anyone keen on Tanzania’s development trajectory, 17 July 2025 will remain a historic day as Her Excellency Dr Samia Suluhu Hassan officially launched the Tanzania Development Vision 2050 (Dira 2050). It was a momentous occasion, marking only the second time in the country’s history that a national development vision had been launched. The first Vision was launched in 2000 by the late President Benjamin Mkapa, and its implementation is expected to end in June 2026.
Dira 2050 has five guiding principles, four broad goals, and eighteen specific targets. The framework of the Vision is built on the foundations of good governance, peace, security, and stability. It further outlines three key pillars that will be core enablers of implementation and five catalytic drivers to support smooth execution. Dira 2050 also recognises the importance of transformative sectors in driving economic transformation. The sectors were selected and prioritised based on their potential to create jobs, boost exports, drive structural transformation, and contribute to local and global markets. The overarching targets are a US$1 trillion economy by 2050, GDP per capita of at least US$7,000, and the total eradication of extreme poverty. These targets are audacious but achievable.
The first pillar, Strong, Inclusive and Competitive Economy, has six attributes, namely: macroeconomic stability and predictability; enhanced fiscal sustainability; innovative and diversified financing; an enabling business environment and investment climate; a robust private sector; and strategic regional and global engagement.
While this article does not attempt to unpack the entire Vision, it focuses on the fourth specific aspiration within the fifth attribute, “a robust private sector”: “Commercially oriented SOEs that operate transparently, profitably, and autonomously, while attracting diverse investment and working synergistically with the private sector to drive economic progress.”
Tanzania has approximately 253 registered state-owned enterprises (SOEs), of which 35 are commercial entities and 218 focus on service provision, operating across sectors including power, water, transportation, and finance. SOEs are managed by the Office of the Treasury Registrar (OTR) and relevant ministries responsible for policy implementation. Some of the key SOEs include Tanzania Electric Supply Company (TANESCO), Tanzania Ports Authority (TPA), National Housing Corporation (NHC), Air Tanzania Company Limited (ATCL), and Tanzania Petroleum Development Corporation (TPDC).
In September 2022, OTR issued several circulars to SOEs, providing directives on key aspects of governance to transform how SOEs are governed. Subsequently, notable efforts have been undertaken to elevate governance practices, but areas still require immediate improvement—especially given that Dira 2050 envisages SOEs playing a critical role in implementation due to their strategic nature. Meaningful transformation of SOEs must start with governance.
Board appointments
There must be a rigorous and transparent process for identifying and appointing board members. Informed by the organisation’s objectives and strategy, the appointing authority should identify the required competencies and subject merit-based nominees to an objective, competitive, and independent interview process. Beyond traditional skills such as accounting/auditing, risk management, and general business leadership, emerging capabilities (for example, digital/IT) are increasingly critical. It is not uncommon for organisations to commit to digital transformation while having no board member with an IT background. Sector-specific experience and knowledge cannot be overemphasised in building an effective board. Navigating today’s complex business world requires a diversity of skills and competencies. Furthermore, to strengthen governance and maintain institutional memory, staggered board terms should be considered as opposed to the current practice where all board members are appointed and conclude their tenures on the same day.
Performance management and autonomy
Once the right individuals have been appointed, the parent ministry—jointly with the Office of the Treasury Registrar—must agree on specific key performance indicators (KPIs) covering immediate, short-term, and long-term horizons. The KPIs must reflect the organisation’s strategy, the Dira 2050 implementation framework, and ministerial policies. All key stakeholders should discuss and align on KPIs and expectations. To preserve organisational autonomy, once alignment is reached there should be no direct supervision or day-to-day monitoring by the parent ministry. The government, through the parent ministry, should establish and maintain an appropriate communication protocol with the SOE’s board, typically through the chair. Clarity of reporting lines and responsibilities should be emphasised to minimise the existing overlap of directives between the OTR and the parent ministry. It is also best practice to involve the board in critical decisions such as the hiring and removal of the CEO, the pursuit of alternative sources of financing, and crafting an ESG strategy for the organisation.
Board remuneration
Board remuneration should be competitive and commensurate with the significance and demands of the role. While public service is expected to be a key motivation for serving on SOE boards, many SOEs are complex and face myriad issues, requiring substantial time and attention from directors. Inadequate remuneration may adversely affect individual board members’ commitment. An independent survey on board remuneration—locally and within the region—covering both public and private entities should be conducted, and the results used as the basis for establishing a remuneration policy for SOE boards that fosters the entity’s medium- and long-term interests. This can also attract and motivate professionals with the requisite skills and experience to join SOE boards.
Board evaluation and stability
OTR should strengthen the existing board evaluation process and ensure it is conducted effectively. The process must be transparent, with the consequences of underperformance clearly spelt out. The rigour and frequency of evaluations should be improved and, where remedial actions have been agreed, implementation should be closely monitored. Outside the established evaluation cycle, appointing authorities should refrain from making board changes to minimise disruption to strategy execution. Frequent and unwarranted changes are likely to derail the organisation’s progress towards agreed milestones.
In conclusion, to enhance competitiveness, SOEs should be subject to the same rules and regulations as private enterprises. They should compete on a level playing field and avoid distorting competition. SOEs should observe high standards of transparency, accountability, and integrity, and adhere to disclosure and reporting standards comparable to listed companies, including publishing financial results and other material information. The journey to a US$1 trillion economy must start on the right footing across all areas.
