The Controller and Auditor General (CAG), Charles Kichere, presenting the 2023/24 financial year report at the State House in Dar es Salaam on March 27, 2025, revealed that audits conducted in 12 out of 217 parastatals uncovered inefficient expenditures amounting to TZS 371.42 billion.
CAG Kichere stated that these financial resources were used on activities that did not add value to the respective public institutions. He urged the government to address these inefficiencies.
“These expenditures arose from interest and penalties due to delayed tax payments, pension contributions, and statutory deductions, delayed payments to suppliers and contractors, and salary payments to employees who had been suspended for a long time without approval from the Secretary-General of Public Service,” said Kichere.
Additionally, CAG reported that these institutions made unauthorized payments amounting to TZS 6.65 billion, contrary to regulations. These included payments to retirees and employees leaving service, allowances and salaries for acting officers without approval, and contract payments exceeding the actual work done.
“The government should strengthen financial controls and payment processes to ensure expenditures align with the value of services provided and recover funds spent on unjustified expenses,” Kichere emphasized.
Losses in Key Public Corporations
Regarding Air Tanzania Company Limited (ATCL), CAG reported that the airline incurred a loss of TZS 91.8 billion, a 62 percent increase from TZS 56.6 billion the previous year. The major reasons cited were high aircraft maintenance costs and engine failures, which left Airbus planes grounded for extended periods while awaiting engine repairs.
Similarly, Tanzania Railway Corporation (TRC) suffered a loss of TZS 224 billion compared to TZS 102 billion the previous year. The key factors behind this were reduced transportation revenue due to a shortage of locomotives and railcars, as well as heavy rains that caused track closures for four months.
On a positive note, the National Health Insurance Fund (NHIF) showed financial improvement, recording a profit of TZS 75.51 billion compared to a loss of TZS 200 billion in the previous two years. However, CAG noted concerns over the increasing number of rejected hospital claims, including claims from Muhimbili National Hospital amounting to approximately TZS 11 billion.
Other corporations that made a profit, totaling 31 in number, include the Tanzania Petroleum Development Corporation (TPDC), which recorded a profit of 248.75 billion shillings, the National Housing Corporation (NHC) with 242.9 billion shillings, and the Tanzania Ports Authority (TPA) with 140.48 billion shillings.
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National Debt Situation
Regarding the government’s debt status, CAG Kichere revealed that as of June 30, 2024, the national debt stood at TZS 97.35 trillion, up from TZS 82.25 trillion in the 2022/23 financial year, an increase of TZS 15.1 trillion, equivalent to 18.36 percent. This included domestic debt of TZS 31.95 trillion and external debt of TZS 65.40 trillion.
However, he assured that the debt remains sustainable based on internationally accepted economic indicators.
“The key indicators show that the net present value of external debt stands at 23.6 percent of GDP, well below the 40 percent threshold. The total debt is at 41.1 percent of GDP, below the 55% limit. Debt service to export revenue is at 127.5 percent, under the 180 percent ceiling, and debt service to government revenue is at 14.5 percent, below the 18 percent limit,” Kichere explained.
Overall, CAG Kichere stated that out of the 1,485 audits conducted during the financial year, 1,301 audit opinions were issued. Among them, 1,295 were unqualified (clean) opinions, representing 99.5 percent, five were qualified which is 0.4 percent, one was adverse which is 0.1 percent, and no opinion was disclaimed. He noted that this reflects improvements in financial reporting and compliance with international accounting standards.
Upon receiving the reports, President Samia Suluhu Hassan acknowledged that the CAG report largely indicates that the government has effectively ensured the proper use of public funds. She committed to implementing the recommendations provided.
“The audit conducted by [CAG] gives us an overview of the outcomes of government efforts to strengthen public institutions. Various measures are being taken to enhance these institutions so they can manage government resources effectively while adhering to the established financial regulations,” she noted.
One Response
It is like playing the same song again and again. The pathetic CAG report keeps repeating every year without any steps being taken. At least JPM was showing anger. Let us wait and see if this time Mama is going to act