Corporate governance in tanzania

Abstract

Interests in corporate governance have been stimulated by a number of factors, among which include the collapse of major corporations such as the Bank of Credit and Commerce International (BCCI), the Maxwell Empire, Ferranti, Coloroll, British & Commonwealth Holdings in the UK; Enron, WorldCom and other major corporations in the US in 2002 as well as the Asian economic crisis. In Tanzania, corporate governance practices have been debated in the context of state ownership as well as corporate scandals such as EPA, MEREMETA, DOWANS and RICHMOND from 2000 to 2008. These have raised the profile of corporate governance both nationally and internationally. The chapter aims at exploring corporate governance in Tanzania. The study employs cross-sectional literature review to explore corporate governance current status both in the public and the private sector. The findings reveal that in Tanzania there is corruption (embezzlement, nepotism) managerial incompetence, political interference and government subsidisation of failing enterprises. Despite the fact that, the government has gone through several reforms to establish an effective system of corporate governance. The development of Tanzanian's own national code of corporate governance, CSMA, and bank corporate governance guidelines marked an important milestone in the commitment towards sorting out and rescuing the situation. By accumulating knowledge of, and recommending continuous improvements in corporate governance, this study hopefully will be of interest in the attempt to create awareness amongst Practitioners, Researchers, Academics, Politcians, Investors and the nation at large which in turn will help to improve the country's competitiveness in attracting foreign investments, as well as encouraging local entrepreneurs to invest.