Mchambuzi
JF-Expert Member
- Aug 24, 2007
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The president, nicknamed “the Bulldozer”, has delighted Tanzanians with an anti-corruption drive and public displays of austerity. Within weeks of taking office last November he had banned all but the most urgent foreign travel for government officials. He spent Tanzania’s Independence Day picking up litter by hand. He has fired officials suspected of incompetence or dishonesty and purged 10,000 “ghost workers” from the public payroll. However, he has a worrying tendency not to think things through.
Take, for example, his efforts to extract more tax from people using the port at Dar es Salaam, a gateway for the region. He has enforced VAT on the costs of moving goods that arrive at the port overland to neighbouring countries such as Zambia and Malawi. Shipping firms have immediately switched routes and now unload in Kenya, Mozambique or South Africa, leaving a once bustling harbour almost empty.
Mr Magufuli remains popular with ordinary Tanzanians. Twitter users at #WhatWouldMagufuliDo celebrate his thriftiness by suggesting amusing things he might approve of, such as wearing a curtain instead of buying new clothes and heating showers with a candle. The president has mended fences with neighbours, too. In April Uganda decided that a $4 billion oil pipeline would go through Tanzania, scrapping a previous agreement with Kenya. A month later Rwanda decided to build a railway to Dar es Salaam instead of the Kenyan port of Mombasa.
However, some Tanzanians, especially businessfolk, are having doubts about Mr Magufuli’s flair for the dramatic. When he thinks a public official has misbehaved he fires him on the spot, rather than following due process. More important is that he shows little interest in wider reforms aimed at spurring economic growth. If anything he seems to be making it tougher to invest in a country that already scores dismally on the World Bank’s ease of doing business index, where it is ranked 139th out of 189. “What Africa needs is strong institutions, not strong men or women,” says Zitto Kabwe, an opposition leader.
Surprisingly Tanzania even makes it hard for honest companies to pay their taxes (there it ranks 150th). Little wonder many less scrupulous ones don’t bother: last year fewer than 500 companies contributed an astonishing 43% of government revenues. Many others paid nothing.
Instead of addressing these deeper structural issues Mr Magufuli has continued to live up to his nickname of “Bulldozer”: one foreign firm was given seven days to settle a $5m bill, says its boss. The country’s revenue authority then took the money directly from its bank account. By contrast, the government is painfully slow to pay its own bills: it still owes the same company $30m. Acacia Mining, a gold producer, is owed $98m in VAT rebates—effectively an interest-free loan to the government. “The country has become totally uninvestable,” says a bigwig at a private-equity firm with holdings across Africa. “You pay your taxes for five years and have the returns to prove it and then some guy arrives with his own calculation and says you haven’t paid your tax.”
Mr Magufuli’s zeal may be admired, but his party, which has ruled Tanzania since independence, is thuggish and undemocratic: it suppressed dissent during the elections last year and then cancelled a vote held in Zanzibar after the opposition probably won it. Frustrated, America suspended $472m of aid. The Bulldozer merely harrumphed that Tanzania would soon no longer need aid and told the revenue authority to squeeze even harder.
Source: http://www.economist.com/news/middle-east-and-africa/21699470-president-who-looks-good-governs-impulsively-government-gesture
