April 19, 2024

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Air Tanzania leads loss-making parastatals despite government investment

Air Tanzania Company Ltd (ATCL) extended losses by 61 percent during the last financial despite significant government investment aimed at reviving the state-run airline.

According to Controller and Auditor General (CAG) Charles Kichere, who presented the summary of audit reports for 2022/23 in Dodoma on Thursday, March 28, 2024, ATCL’s losses surged by 61 percent to Sh56.64 billion, compared to Sh35.2 billion in the previous year.

“The loss widened despite the fact that the company received government grants worth Sh31.55 billion to boost its operations,” said Mr Kichere who handed the annual audit reports to President Samia Suluhu Hassan at State House.

The government has been injecting money to revive the national carrier which business is linked to the tourism activities.

According to the Transport ministry’s annual budgets passed by Parliament from the 2016/17 financial year to date, the government has spent at least Sh3.63 trillion in reviving the airline during the last eight years.

The company which had only one operational plane in 2015, now boasts a fleet of 15 planes, the latest addition being a Boeing 737 MAX 9, which arrived in Dar es Salaam on Tuesday March 26, 2024.

Other planes are one Dash 8-Q300, five Dash 8-Q400’s, four Airbus A220-300’s, another Boeing 737 MAX 9, two Boeing 787-8 Dreamliners and one Boeing 767-300F freighter.

Other loss-making state entities mentioned by the CAG include the Tanzania Telecommunications Corporation (TTCL), Tanzania Railways Corporation (TRC), Tanzania Posts Corporation and Tanoil Investment Ltd.TTCL made a loss of Sh894 million but the loss reduced by 94 percent compared to Sh19.23 billion previously.

The corporation received Sh4.55 billion as grants from the government.

TRC recorded a loss of Sh100.70 billion but the loss also reduced by 47.32 percent compared to Sh190.01 billion recorded previously, according to Mr Kichere.

It also received a grant worth Sh32.81 billion for recurrent expenditure during the year.Tanoil recorded a loss of Sh76.56 billion which extended from Sh7.84 billion reported previously.

Mr Kichere said the company loss is associated with blockage of its oil after failing to pay the oil suppliers.

He also attributed the loss to high cost of oil storage which more than doubled to Sh12.9 billion.

The company also sold only 112 million litres of oil compared to 262 million litres previously.

Tanzania Posts Corporation recorded a loss of Sh1.34 billion during the 2022/23 financial year compared to a profit of Sh16.21 billion that was generated after selling its properties.

“The government should now ensure that the state entities are managed by professional and business-minded employees for efficiency. The government should also ensure it oversees its firms by appointing board members who are professionals in the respective sectors and business skills,” Mr Kichere said, adding that the corporations have managerial challenges.

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