Financial performance of public corporations: A case of District development corporations (DDCs).

Abstract

There is widespread interest in Tanzania on the subject of public
corporations. Politicians, academicians, managers and the general public
have all questioned the performance of public corporations. That is u.uciei -
standable. For within an unprecedentedly brief historical period, about
eleven years after the Arusha Declaration in 1967, over fifty percent of the
economy has been under the ownership and control of the state. Parastatals,
public corporations or enterprises are used interchangeably in this study to
mean, €¢"production and commercial organisations owned by the Government or
with majority Government participation, run on profit basis, and whose
accounts are not integrated into the budgets." In Tanzania they have penetrated
each and every sector of the economy - agriculture, manufacturing, and
commerce.

The extent and scope of public corporations in Tanzania show the important
place they occupy in the economic development of the country. The urgency and
necessity of economic development in the Third World Countries in general, and
Tanzania in particular, demand that the corporations need not only to fulfill
their roles and objectives, but also to minimise costs with the aim of creating
and increasing surplus. It is the purpose of this study to evaluate the
performance of District Development Corporations (DDCs) in their efforts to
realise the above. In an attempt to attain the purpose of the study, questionnaires,
interviews and >survey of secondary data provide for the methodology.
Section A is devoted to a general overview of public corporations with
references to other Third.World Countries. Their roles, extent and scope, and
the reasons behind their formation are discussed. The section also discusses
the necessity of 'good1 performance on the part of the corporations in relation to
surplus creation owing to its important contribution towards economic development
through investment. In concluding the section, the hypothesis that "Poor
performance of DDCs is due to lack of adherence to sound financial policies is
developed.