45 Magu­fuli’s pinch

The Africa Report - - CONTENTS -

Etched in the minds of the clean­ers at Dar es Salaam In­ter­na­tional Air­port is a photo of Tan­za­nia's Pres­i­dent John Magu­fuli sit­ting in the econ­omy class sec­tion of an air­plane. His money-sav­ing mea­sures have in­spired a new gen­er­a­tion of fru­gal cit­i­zens. At the on­set of ev­ery task, they ask them­selves: What would Magu­fuli do? Th­ese days, ev­ery­one in Dar es Salaam is try­ing to save a penny. From the traf­fic cop stop­ping cars from us­ing round­abouts (con­sid­ered a waste of petrol) to wait­ers serv­ing two drinks at a time (it makes for less walk­ing) the ef­fi­ciency drive can be seen every­where. But Magu­fuli's rep­u­ta­tion as a heroic anti-cor­rup­tion cru­sader took a turn for the sin­is­ter af­ter an as­sas­si­na­tion at­tempt on his great­est critic, op­po­si­tion law­maker Tundu Lissu, on 7 Septem­ber. Lissu had mocked Magu­fuli for bungling his plan to re­vive Air Tan­za­nia, the na­tional car­rier. He had also called Magu­fuli “a petty dic­ta­tor”, which did not sit well with the man nick­named the ‘Bull­dozer'. Magu­fuli's fo­cus on Air Tan­za­nia had mys­ti­fied the coun­try. He said he wanted to boost tourism and start di­rect flights to the US. But with dozens of in­ter­na­tional flights ev­ery day, Dar es Salaam is al­ready well con­nected to many ma­jor cities. And the process of get­ting clear­ance to fly di­rectly to the US is a long and com­pli­cated one. All along the city's shaded ter­races, hushed con­ver­sa­tions about Magu­fuli's real mo­tives in of­fice can be heard. He is do­ing away with pres­i­den­tial term lim­its. He will de­clare him­self pres­i­dent for life. He is learn­ing dic­ta­to­rial habits from his best friend, Rwanda's Pres­i­dent Paul Kagame. He has been threat­ened by multi­na­tional com­pa­nies in­tent on re­vers­ing his con­tro­ver­sial changes to the min­ing code. He has a squad of com­man­dos pro­tect­ing him from in­ter­na­tional hitmen. Be­ing astride a fast-grow­ing econ­omy in a re­gion seen as an eco­nomic bright spot can bring com­pli­ca­tions. Tan­za­nia is ranked as the con­ti­nent's ninth-most at­trac­tive in­vest­ment des­ti­na­tion in this year's African Eco­nomic Out­look. Trade and in­dus­try min­is­ter Charles Mwi­jage said in May that Tan­za­nia reg­is­tered 393 projects worth a com­bined to­tal of $2.4bn in the first 18 months of Magu­fuli's pres­i­dency. But all that could be about to change. The busi­ness com­mu­nity and top of­fi­cials in the gov­ern­ing Chama Cha Mapin­duzi party are wor­ried that for­eign di­rect in­vest­ment could stall as Magu­fuli's brash crack­down scares off for­eign cap­i­tal. At the swim­ming pools and ten­nis courts of Dar es Salaam, for­eign in­vestors are spooked. They whis­per of staff de­por­ta­tions and air­port de­ten­tions. But it is Magu­fuli' s slap­ping of Lon­don-listed gold pro­ducer Aca­cia Min­ing with a $190bn tax bill, the high­est since Chad asked Exxonmo­bil to pay $74bn, that is the talk of the town. Af­ter Aca­cia re­fused to pay that stag­ger­ing bill in July, Magu­fuli slapped a ban on min­eral ship­ments. Aca­cia has seen a build-up of ap­prox­i­mately $265m worth of gold that it can­not ship due to the ban. The firm also has been forced to scale down op­er­a­tions. South African pro­ducer Pe­tra Di­a­monds is also in fi­nan­cial trou­ble be­cause of Magu­fuli's crack­down on for­eign min­ers. Pe­tra sus­pended its op­er­a­tions in the coun­try af­ter its staff were de­tained upon ar­rival at the air­port and the gov­ern­ment seized a ship­ment of its di­a­monds. Party in­sid­ers worry that for­eign in­vestors' un­easi­ness in the min­ing sec­tor could seep into the coun­try's nascent gas sec­tor. The gov­ern­ment hopes to part­ner with Shell, Exxonmo­bil, Sta­toil, Pav­il­ion En­ergy, BG Group and Ophir En­ergy to build a $30bn liq­ue­fied nat­u­ral gas plant in Lindi. Even Aliko Dan­gote, the rich­est man on the con­ti­nent, is wor­ried about Magu­fuli's crack­down. Dan­gote was forced to sus­pend op­er­a­tions at his $650m ce­ment plant in the coun­try amid reg­u­la­tory chal­lenges. “[Tan­za­nia's gov­ern­ment has] scared quite a lot of in­vestors, and scar­ing in­vestors is not a good thing to do,” he told a con­fer­ence in Lon­don. “Once an in­vestor com­plains, the rest will run away. They don't even want to hear the de­tails.”

The busi­ness com­mu­nity and top of­fi­cials in the gov­ern­ing party worry that Magu­fuli’s brash crack­down will scare off for­eign cap­i­tal

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