Tanzania Leader Appoints Tax Specialist Central Bank Chief

DAR ES SALAAM (Capital Markets in Africa) – Tanzanian President John Magufuli named Florens Luoga, a tax-law expert, as the new head of the central bank as the East African nation’s leader seeks to overhaul the country’s natural-resources industry.

In July, Magufuli appointed Luoga as chairman of the Tanzania Revenue Authority board. He’s been a deputy vice chancellor at the University of Dar es Salaam since 2014, according to the academic institution’s website.

“We had a gap in the taxation law,” Magufuli said Monday in comments on national Tanzania Broadcasting Corp. “And that’s why we were being played with a lot. He is an expert on taxation law. So those who invest and try to open accounts elsewhere will be stopped.”

Magufuli is trying to ensure the government gets a greater share of revenue from its raw materials and help finance his plan to industrialize sub-Saharan Africa’s sixth-biggest economy. Last week, Barrick Gold Corp. said its African unit would pay $300 million to the government and share future “economic benefits” of mining operations equally with Tanzania.

Magufuli said that while Luoga is not an economist, he’d be helped by deputies well versed with economic policy. The holder of a doctorate in law from Warwick University, according to the University of Dar es Salaam website, is replacing Governor Benno Ndulu, whose two-term tenure ends in January.

Deputy Governor Bernard Kibesse, who’s responsible for financial stability at the bank, has a doctorate in financial engineering and macroeconomics, according to the bank’s website, while Yamungu Kayandabila, who heads economic and financial policies, holds an economics doctorate.

“Tradition is that the central bank governor is an economist and Prof. Luoga is a lawyer,” said Honest Prosper Ngowi, an economics professor at Mzumbe University in Dar es Salaam. “But now he will need a lot of support in economic issues from those under him.”

Tanzania’s shilling fell 0.5 percent to 2,245.30 shillings against the dollar by 2:03 p.m., to its lowest in nine months.

Source: Bloomberg Business News