The Potentials and Challenges of Outsourcing Public Services in Developing Countries: Evidences from a Tanzanian Public Sector Organization

Outsourcing has become a common feature of public service management in many part of world. This approach is being used by public organizations to strengthen their core competencies to ensure cost-effective management of resources. Besides the assumed potential benefits, the outsourcing can also bring a number of challenges. The purpose of this study is to assess the actual experiences of outsourcing of services in a public sector organization with the aim of outlining the benefits, challenges and lessons for future outsourcing initiatives. The study focuses on Urban Water Supply and Sanitation Authority (UWASA) unit in Tanga (Tanzania). Forty four employees of the UWASA were interviewed to record their perception about the benefits and challenges of using outsourcing methods in service delivery. The findings indicate the potential benefits of the outsourcing in terms of costs reduction, improved efficiency and greater accountability standards. The major challenges noted in outsourcing included negative attitude of staff, poor monitoring and evaluation, non-cooperation by staff and interference by community. It is hoped that the findings will be useful for further research in this subject area and also for the policy making