Luster Wears off Tanzanian President’s Anti-Corruption Drive

Dar es Salam, Capital Markets in Africa: Tanzanian President John Magufuli’s quick action to stem corruption and government waste won praise from so many graft-weary East Africans that it triggered the internet meme #WhatWouldMagufuliDo. Now, there are growing concerns that the man nicknamed “bulldozer” is going too far.

This year, the government has banned three newspapers for reasons including “inflammatory” reporting and ordered the closure of two radio stations for allegedly broadcasting seditious content. In June, police outlawed all protests as the main opposition planned rallies against what it called Magufuli’s “dictatorship,” the same month that the state jailed a 40-year-old man for insulting the president.

The pace at which Magufuli is instituting regulatory reforms and seeking to boost tax revenue is also raising uncertainties among investors who are struggling to speak to the government and understand what it’s trying to do on a range of issues, according to Roddy Barclay, an analyst at London-based research consultancy Africa Practice.

“Magufuli’s shine, based mostly on his corruption crusade, is definitely coming off,” Jared Jeffery, an analyst at South Africa-based NKC African Economics, said in an e-mailed note.

Bulldozing Change
Magufuli took charge of Africa’s third-biggest gold producer in November with pledges to hasten development of the East African nation’s nascent natural-gas industry, increase revenue collection and diversify the mostly agrarian economy. The nation holds natural gas reserves of about 57 trillion cubic feet. Under his predecessor, Jakaya Kikwete, economic growth averaged 7 percent a year between 2010 and 2015 and the country largely avoided the political controversies suffered by regional neighbors, including the regional powerhouse, Kenya. 

That political stability may be threatened by an opposition growing increasingly critical of Magufuli. Chadema, as the main opposition group is known, threatened a “Day of Defiance” on Sept. 1 to protest against measures it describes as “high-handed.” The party postponed the protest by a month, saying it would wait for the outcome of talks initiated by religious leaders to convince the president to yield more political space for the opposition.

The presidency dismissed the opposition’s criticism of Magufuli and said the Magufuli is simply trying to instill more discipline in the country’s labor force.

‘Go to Work’
“The president is saying Tanzanians should go to work,” Gerson Msigwa, the president’s spokesman, said by phone on Sept. 5. “We can’t stand here conducting politics all the time without working.”

The stand-off between Magufuli and Chadema could derail the economy if the tensions deteriorate, according to Moses Kulaba, executive-director at Governance and Economic Policy Center, a research group based in Dar es Salaam-based, the commercial capital. Growth slowed to 5.5 percent in the first quarter, compared with 5.7 percent a year ago, according to Tanzania’s National Bureau of Statistics.

“They should try to see if there is a way of pursuing other means to resolve the situation,” Kulaba said. “You don’t want to create an impression that there’s also political uncertainty because that increases your political risk. If the situation continues as it is, the government will be forced to back down.”

Magufuli’s aggressive push to register immediate results with his economic reforms also poses risks for private businesses, Barclay at africapractice said in an Aug. 30 research note. In June, the government unveiled a range of new taxes in the oil and gas, telecommunications and financial services industries to support a planned 31 percent increase in spending.

At the same time, decision-making is being centralized within the president’s office and the influence Magufuli exerts over the way his administration functions has created discord, said Barclay. That means that some policies and strategic decisions are being driven by a political agenda, he said.

“There is a clear risk that short-term gains for government could come at the cost of long-term investment,” Barclay said. “And with government officials across the spectrum under enormous pressure to deliver results and increase revenue generation, conversations which were previously being held along technical lines are now increasingly being driven by a political agenda.”

Source: Bloomberg Business News