The Consolidated Holding Corporation was established as NBC Holding Corporation necessitated by the government move to re-organise the National Bank of Commerce but later new tasks were added to the Corporation and its tenure extended.
As part of celebrations marking Tanzania Mainland’s 50th Independence Anniversary, MANGENGESA MDIMI conducted the following interview with the Acting Director General of Consolidated Holding Corporation (CHC), Mr Dome P. Malosha on the Corporation’s functions and challenges…
Question: What is the historical background to the Corporation’s establishment? Answer: The Corporation was established on 1st October 1997 as the NBC Holding Corporation (NBHC)
under the National Bank of Commerce (Re-organisation and Vesting of Assets and Liabilities) Act No. 23 of 1997 or Cap. 404 (R. E. 2002).
The move resulted from the Government decision to re-organise the then National Bank of Commerce. In year 2002 the Corporation was granted an extension of its tenure for another five years up to September 30, 2007 under a Parliamentary Resolution No. 20 of 2002 that was passed on 31st July, 2002 by virtue of Section 5 (1) of the establishing Act.
However, before this tenure elapsed, CHC experienced two other changes through Act No. 10 of 2007. In the first place it was vested with additional tasks that remained after the tenures of the Loans and Advances Realisation Trust (LART), Air Tanzania Holding Company (ATHCO) and SIMU 2000 Limited came to an end.
Following this important development, the Corporation’s life span was accordingly extended to June 30th 2011. In November 2007 all the remaining tasks of the Presidential Parastatal Sector Reform Commission (PSRC) were also vested to CHC when the Commission’s mandate expired on 31st December, 2007.
And when CHC’s tenure came to an end on 30th June 2011, the Parliament passed a resolution to extend its tenure for another three years up to June 30th 2014. The various amendments of the establishing law have also brought about major developments in the nature and scope of the Corporation’s operations, especially judging from the impact it had on its overall performance from year 1997 to 2011.
A notable feature in these changes is that the CHC has legally been entrusted with the task of undertaking monitoring and evaluation of all privatised public enterprises to determine their performance as per the respective divestiture agreements.
It is also worth noting here that in performing the tasks it inherited from the defunct Presidential Parastatal Reform Commission (PSRC), the Corporation has been exposed to more risks and challenges than before.
Q: The Corporation appears to have changed its original name, that is NBCHC to CHC. What happened?
A: Following the privatisation of the National Bank of Commerce (NBC 1997 Ltd), the Corporation was given the name of Consolidated Holding Corporation (CHC) through the Written Laws (Miscellaneous Amendments) Act No. 10 of 2001, in order to avoid confusion in the eyes of the public on the application of the word/name “NBC” as the same was being used by the bank.
Q: How much have you achieved in meeting the set objectives?
A: The Corporation has, to a greater extent, managed to perform its duties and responsibilities successfully. The achievements are mainly in debt collection relating to the ex-NBC and divestiture transactions; sale of landed properties as well as finalisation of about 1,496 cases out of 1,928 cases which the Corporation has been handling.
Also conducting monitoring and evaluation of 180 entities out of 330 privatised public entities. Another achievement refers to benefits accrued to the nation from privatisation of parastatals which include increased production of goods for local consumption and for the export market; creation of more employment opportunities within the entities themselves and in the economy as a whole; introduction of new and modern technologies in production and service delivery; and increased Government revenue through taxes paid by the privatised parastatals which, prior to privatisation, heavily depended on subsidies from the Government. CHC has also been making remittances to the Treasury since its inception.
Q: What are the challenges your Corporation has faced?
A: Despite the achievements we have realised over the years, the Corporation has faced several challenges which are being tackled on a case by case basis to ensure that they do not undermine the laid down objectives.
Some of the challenges include:
(i) Loan recovery: Some investors delaying to pay balances of the purchase prices of divested entities; some debts are not easily collectable because they are linked with court cases or do not have collaterals; other debts are tied to procurement of title deeds; ex-NBC debts are scattered all over the country, making the debt collection exercise difficult/ cumbersome and costly.
(ii) Liquidation: Endless claims for retrenchment/ retirement benefits from exemployees of either privatised or liquidated parastatals.
(iii) Litigation: Endless filing of court cases makes it difficult to discharge or reduce the number of pending cases at any given time.
(iv) Privatisation: Some enterprises are sensitive to privatise thus requiring more time and resources to handle them judiciously and effectively. Also Lack of public awareness on the general public about the reforms that are taking place in the country.
(v) Monitoring and Evaluation: Some investors hesitate to cooperate with CHC officers who are responsible for undertaking the monitoring and evaluation task; some investors are reluctant to provide information pertaining to the operations of entities divested to them.
Q: What measures have you taken to deal with these challenges?
A: We wish to assure you and the general public that the Corporation is determined to undertake its responsibilities effectively, timely and transparently for the overall benefit of the nation.
Some of the measures the Corporation has taken to deal with the challenges are as follows:
(i) Making strategic and thorough follows ups on divested entities in close collaboration with the respective sector Ministries; recommending to the Government to repossess divested parastatals where investors have proved beyond doubt that they are incapable of fulfilling the divestiture agreements.
(ii) Strengthening the Corporation’s Publicity Unit to ensure public awareness education is imparted to the people so that they can properly understand and appreciate the benefits of the on-going economic reform programme within the context of the nation’s socio-economic plans.
(iii) Aggressive follow ups on procurement of title deeds.
(iv) Strategically strengthening the Litigation Department through recruitment of legal experts who are diligent and experienced advocates.
(v) Fully involving all key stakeholders including the Government in all divesture
transactions to ensure accountability and transparency.
(vi) Building a strategic relationship with the respective investors with a view to educating them on the importance of the monitoring and evaluation exercise to their companies and the economy as a whole.
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