President Samia Suluhu has revealed one of the reasons that the Public Investment bill has stalled in parliament is the debate on the creation of a public investment fund which the bill has proposed.
“Another issue that has caused debates in the government is the creation of something called the Sovereign Wealth Fund, but in the law concerning the Registrar of the Treasury, we have given it a different name. There are many aspects that are not well understood, so those of us overseeing the law, including the Minister, the Registrar of the Treasury, and others, need to provide a clear explanation to make it understandable,” directed President Samia.
The bill was first read in parliament in November 2023 but it has not progressed forward. Article 21 of the Public Investment Bill outlines the creation of the Public Investment Fund, with its main sources of funding being dividends or the sale of government shares in parastatals and companies.
Additional sources of funding include profits from the fund’s business activities, contributions and donations from private individuals and institutions, and other revenue streams.
The bill stipulates that the fund will be managed by an Executive Director, but all investment decisions will be made by a Steering Committee comprising nine members. These members include the Chief Secretary, the Permanent Secretary of the Ministry of Finance, the Permanent Secretary of the Ministry responsible for investment, the Attorney General, the Permanent Secretary of the ministry responsible for parliamentary affairs, policy, and coordination, the Secretary of the Planning Commission, and three members with investment experience.
One of the arguments against the fund was the fear that the treasury registrar would have excessive power and the fund would be almost no different from the treasury, a fear that President Samia allays.
“Some people wonder why a second fund is being established; why another treasury fund is being created. They say this fund will give significant power to the Registrar of the Treasury, making them almost untouchable,” continued President Samia.
She added: “Many countries around the world have a sovereign wealth fund. The money is not just for us living today; it is for future generations. We are building a foundation and capital for them. Even if we use it now, it will be used with the understanding that it is an investment and that investment will pay off and grow this fund for the benefit of future generations.”
The idea of creation of sovereign wealth fund has been floated around in Tanzania especially around extractive sector, with several stakeholders such as Hakirasilimali arguing that the country should set fund for minerals, as they are resources that are quickly depleted. With new investment in the gas sector the country also sought to create wealth fund around gas revenues.
President Samia has directed the Ministry to research further and explore having a separate legislation for the Sovereign Wealth Fund.
“It is about building the country’s future capital, which is why it is called a Sovereign Wealth Fund. So, if this requires its law. It can be mentioned in the Registrar of the Treasury’s law, but it should have its separate law. We should go ahead and establish this fund and start contributing to it,” argued President Samia.
“If there are countries that have done this successfully, go study them, invite them to come and give us a lecture, to tell us how they are doing it and how they are using it. But it is very important to have something lik
