Transforming Public Sector Corporations in Tanzania: A Capability-Based Framework for Addressing Persistent Governance, Financial, and Organizational Weaknesses
- AIOR Admin
- 55 minutes ago
- 2 min read
Josephat Lotto
College of Business Education
Public and Statutory Corporations (PSCs) remain important instruments for economic transformation, strategic investment, and public service delivery in developing economies. Governments establish PSCs to address market failures, provide essential services, support industrial development, and advance national economic objectives. However, despite growing interest in PSCs' governance, several gaps remain in existing literature. First, many studies focus primarily on ownership structures, privatization outcomes, and financial performance while paying limited attention to internal institutional capabilities. Second, existing performance assessments frequently identify weaknesses without developing systematic approaches for measuring recurring organizational constraints. Third, limited attention has been given to mechanisms that translate oversight findings into continuous organizational improvement. The study, therefore, addresses these gaps by developing the Public Sector Corporation Performance Weakness Index (PSC-PWI), an analytical framework designed to identify and measure recurring institutional weaknesses affecting PSCs' performance. The development of the index was done using the directed qualitative content analysis of official documentary evidence from Controller and Auditor General (CAG) audit reports and Treasury Registrar (TR) performance evaluation reports, covering the period 2019/20–2023/24. The study analyzed 30 purposively selected PSCs using a structured coding framework designed to identify recurring institutional weaknesses. The findings reveal 264 recurring weaknesses categorized into seven dimensions: governance and accountability, financial management, operational efficiency, strategic implementation, human capital capability, digital transformation, and risk management. Financial management weaknesses constitute the largest proportion of identified deficiencies (23.5%), followed by governance weaknesses (20.5%), operational inefficiencies (17.0%), strategic implementation challenges (14.4%), risk management weaknesses (11.4%), human capital limitations (8.0%), and digital transformation gaps (5.2%). To address this gap, the study proposes the Capability-Based Reform Model as an institutional mechanism capable of transforming oversight findings into practical reform interventions. The broader implication is that effective public ownership requires more than control and supervision. Governments must develop the institutional capability to support, improve, and transform the organizations they own. Strengthening PSCs’ performance, therefore, requires a shift from a compliance-based reform model toward a capability-based institutional development approach. The PSC-PWI and Capability-Based Reform Model developed in this study provide a practical pathway for achieving this transformation. Although developed within the Tanzanian context, the framework offers broader relevance for developing countries seeking to improve the performance, accountability, and sustainability of public corporations. Future research may extend this study by applying the PSC-PWI quantitatively across larger samples of public corporations, examining relationships between capability weaknesses and financial outcomes, and evaluating the long-term effectiveness of capability-based reform interventions.
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