RED LIGHTS FLASH­ING

Three years ago this week, John Magu­fuli came to power in Tan­za­nia amid much fan­fare. He’s done much in the way of re­form — but the slow creep to­wards au­toc­racy is con­cern­ing

Financial Mail - - FEATURE - Alexan­der Matthews John Magu­fuli

Af­ter John Magu­fuli be­came Tan­za­nia’s fifth pres­i­dent in No­vem­ber 2015, it soon be­came clear that this was a man de­ter­mined to gov­ern dif­fer­ently. Within weeks of his in­au­gu­ra­tion, he had can­celled In­de­pen­dence

Day cel­e­bra­tions, us­ing the bud­geted funds to fight cholera and call­ing on cit­i­zens to join him in a coun­try­wide clean-up in­stead.

En­thralled by the rare sight of an African pres­i­dent lead­ing by ex­am­ple, the Twit­ter­sphere buzzed with pho­tographs of Magu­fuli sweep­ing the streets. As a new broom de­ter­mined to clean up a scle­rotic, in­ef­fi­cient and cor­rupt gov­ern­ment, he made sur­prise vis­its to hos­pi­tals, the fi­nance min­istry and else­where, fir­ing cor­rupt and un­der­per­form­ing civil ser­vants and min­is­ters. In 2016 he re­moved 16,000 “ghost” em­ploy­ees from the pub­lic sec­tor pay­roll; last year, Al Jazeera re­ported on a fur­ther 10,000 fired for lack­ing ad­e­quate qual­i­fi­ca­tions.

A crack­down on tax eva­sion and a shake-up of the rev­enue ser­vice re­sulted in 1.3-tril­lion Tan­za­nian shillings (about R8.3bn) in un­paid taxes col­lected in just two months at the be­gin­ning of his ten­ure. When he un­veiled his cabi­net, it fea­tured just 34 min­is­ters and deputy min­is­ters; Jakaya Kik­wete, his pre­de­ces­sor, had 60. Travel perks for min­is­ters have been cut, and ex­ec­u­tives’ salaries at paras­tatals slashed.

Magu­fuli put his money where his mouth is too: last Oc­to­ber he re­vealed that his salary is a mere Tsh9m (about R57,000) a month — re­port­edly a third of Kik­wete’s and markedly lower than that of many other African pres­i­dents (Cyril Ramaphosa, for ex­am­ple, earns just over R300,000 a month).

Magu­fuli’s re­formist zeal ex­tends be­yond gov­ern­ment: he has shown he wants to fun­da­men­tally re­make the econ­omy too, es­pe­cially its min­ing sec­tor. Though it con­trib­utes about 5% to GDP, min­ing is re­spon­si­ble for a third of Tan­za­nia’s ex­port rev­enue. In July 2017, Magu­fuli signed off on leg­is­la­tion that re­quires gov­ern­ment own­er­ship of at least 16% in min­ing com­pa­nies, in­creases roy­al­ties

What it means: Magu­fuli’s push for re­form has cor­re­spond­ed­with the shut­ting­down of civil and po­lit­i­cal space

on met­als ex­ports from 4% to 6% and im­poses an ad­di­tional 1% clear­ing fee. The law also al­lows the gov­ern­ment to can­cel or rene­go­ti­ate gas and min­eral con­tracts, and for­bids com­pa­nies from seek­ing in­ter­na­tional ar­bi­tra­tion. Last year, ex­ports of gold and cop­per con­cen­trates were also banned in a bid to force min­ing com­pa­nies to build a lo­cal smelter.

Though there is con­sen­sus that min­ing com­pa­nies have pre­vi­ously had too sweet a deal in Tan­za­nia and that the coun­try de­serves a greater share of its min­eral wealth, there are signs that Magu­fuli is go­ing too far.

In 2016, pres­i­den­tial com­mit­tees de­ter­mined that Aca­cia Min­ing owes the gov­ern­ment $190bn in taxes, fines and in­ter­est — even though the com­pany, the coun­try’s largest miner, has gold re­serves roughly worth just $10bn.

Aca­cia’s largest share­holder, Canad­abased Bar­rick Gold, has been ne­go­ti­at­ing with the gov­ern­ment on its be­half. In Oc­to­ber 2017, it of­fered a one-off pay­ment of $300m, a 16% share in Aca­cia’s three gold-

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