FIVE certificates issued by the Controller and Auditor General (CAG) were adverse and one certificate was qualified, the watchdog says in its performance audit report for the 2023/2024 financial year.

CAG Charles Kichere yesterday presented the report to President Samia Suluhu Hassan at the State House in Dar es Salaam, affirming that despite a number of challenges many public institutions showed significant improvement in financial management and presentation.

This indicates improvement in the public service but losses were cited across several public institutions operating commercially, he said, acknowledging government efforts to improve the performance of profit-making institutions.

He appealed for adherence to good governance practices, as out of the 1,301 audit certificates (opinions) issued 1,295 certificates were unqualified, representing 99.5 percent, while the Tanzania Railways Corporation (TRC) recorded a loss of 224bn/- for fiscal 2023/2024, a sharp increase from the previous year’s loss of 102bn/-.

The report attributed the loss to a decline in transportation revenue, caused by a shortage of train locomotives and carriages, as well as heavy rainfall that led to the closure of railway lines for upwards of four months.

TRC received a government subsidy of 29bn/-, which helped reduce the loss as without this subsidy it would have chalked up 253bn/- in losses, he elaborated, affirming that the report did not account for any revenue from the standard gauge railway (SGR), as the data covers the period until June 30, 2024 where SGR services had yet to commence.

He recommended that TRC improve its operational efficiency to boost revenue and develop a comprehensive strategy to acquire the necessary locomotives and carriages to meet transport demands effectively.

Air Tanzania Co. Ltd (ATCL) recorded a loss of 91.8bn/- for the 2023/2024 financial year, a 62 percent increase from the previous year’s loss of 56.6bn/-, he stated, explaining the loss was primarily due to high aircraft maintenance costs and prolonged downtime due to engine issues.

This grounded Airbus aircraft for extended periods, he stated, noting that ATCL did, however, receive a government subsidy of 99.8bn/-, which helped mitigate the loss. “Without this subsidy, the airline’s loss would have reached 191.6bn/-,’ the report intoned.

“ATCL needs to work closely with the government to conduct a thorough study into the most cost-effective operational strategies for the airline, taking into account both financial and economic factors to enhance efficiency,” he urged.

The Tanzania Telecommunications Corporation Ltd (TTCL) reported a loss of 27.78bn/- for the 2023/2024 financial year, an increase from the previous year’s loss of 4.3bn/-, attributed to increased costs following the corporation’s taking over the national fibre optic network and national data centre.

TTCL collected 24bn/- from the network, but this revenue was redirected into the government’s general fund to repay the fibre optic debt, while the funds would have cut TTCL losses by 86 percent, in the least, he stated.

He recommended that the Treasury cover the national fibre optic debt as is done with other public sector debts, to allow TTCL to operate more efficiently, similarly citing a loss with the Tanzania Posts Corporation (TPC).

TPC incurred a loss of 23.63bn/-, a significant increase from the previous year’s loss of 1.34bn/-, on account of a 20 percent decline in revenue and a 46 percent rise in costs.

The corporation did receive a government subsidy of 3.36bn/-, which helped to reduce the loss as without it the loss would have amounted to 26.69bn/-, he stated

Given the financial difficulties of state-owned enterprises and the rising national debt, the CAG recommended that urgent measures be taken to improve efficiency and financial health of public commercial entities.

A robust fiscal policy is needed to ensure long-term debt sustainability and success of state owned companies, he said, also pointing at four public institutions that received qualified certificates. These are Keko Pharmaceuticals producing a variety of medicines and medical supplies, the Tanzania Tea Board, the National Sugar Institute and the postal body.