Gone too early, the 61-year old Tanzanian President John Magufuli has died of heart disease, according to a government statement although speculation is rife that he could have succumbed to Covid 19, which he stubbornly ignored.
Ms Salaam, Samia Suluhu Hassan, the country’s Vice President, will be sworn in as the new President within 24 hours and should serve the remainder of Magufuli’s five-year term which he began last year.
Magufuli was last seen in public on 27 February, but Prime Minister Kassim Majaliwa insisted last week that the president was “healthy and working hard”.
The first vice president of Tanzania’s Zanzibar Island, Seif Sharif Hamad, also died mid last month, weeks after being hospitalized with COVID-19.
When Covid-19 arrived in Tanzania, Magufuli called on people to go to churches and mosques to pray. “Coronavirus, which is a devil, cannot survive in the body of Christ… It will burn instantly,” he said.
Main opposition leader Tundu Lissu, shot 16 times in a 2017 assassination attempt and exiled in Belgium, described Magufuli’s death as “poetic justice”, insisting his sources said he had succumbed to COVID-19.
Magufuli was declared president on his 56th birthday in October 2015. He was re-elected last October, for a second and last term of office.
He was an enigma and well loved by Tanzanians despite massive criticism.
Last year’s Tanzania’s election, for which about 29 million people out of about 60 million were registered to vote on the mainland and 560,000 in Zanzibar, took place largely without external monitors.
Most international media were unable to gain accreditation to cover voting on the mainland, and major social media networks were blocked, accessible only through virtual private networks (VPN).
Tanzania Elections Watch, a regional group of eminent people, expressed concerns about the credibility and conduct of the election, noting deadly violence on the eve of the vote in Zanzibar, massive disruption in internet and text messaging services, and the reported arrests of candidates on Election Day.
Magufuli’s main challenger, the Chadema party candidate Tundu Lissu, declared the results “illegitimate” and after elections he fled into exile.
Magufuli’s Chama Cha Mapinduzi (CCM) party has been in power since independence in 1961, but rights groups have decried a slide into “autocracy” over the past five years marked by the repression of the opposition.
Controversial
Magufuli’s combative approach to international business, aggressive domestic policies and unusual response to coronavirus have made him one of the most high-profile and controversial presidents on the continent.
While Magufuli’s battle against corruption is applauded by many – his tough approach earned him the nickname “The Bulldozer” – his efforts have been framed by critics as a way to persecute political opponents.
Since Magufuli came to power, opponents allege that he disregarded the rule of law and subverted the judiciary by forcing legislation through parliament and using draconian statutes to harass and imprison opponents.
A local journalist, who wished to remain anonymous, was imprisoned for 13 days for running an unlicensed blog after the authorities imposed a $900 registration fee on all bloggers in 2018. “I wasn’t even critical of the government,” he says.
The concern for the private sector is that Magufuli’s ability to enact laws and evade normal checks and balances is forging an unpredictable actor that can vilify certain sectors and impose his will on individual companies.
Not sorry for East Africa
Tanzania’s political environment – and Magufuli’s unapologetic stances on controversial issues – are also straining relations with its regional partners in the East African Community (EAC), creating problems for EAC businesses in trade, transport and logistics.
When Magufuli first came to power it seemed he had found a powerful ally in Rwanda’s President Paul Kagame, taking his first international trip to stay at his counterpart’s village retreat. The two leaders agreed to co-finance and build a railway from Tanzania’s northwestern town of Isaka to the Rwandan capital of Kigali, connecting the port of Dar es Salaam with the hinterland.
But the relationship soured due to Magufuli’s support for Burundi’s late president Pierre Nkurunziza and other disagreements, delaying the project and the possibility of boosting Tanzania’s main port.
After Tanzania failed to introduce strong Covid-19 measures, neighbouring Zambia and Kenya, fearing overlapping transmission, closed their borders with the country in May. Kenya then banned direct flights arriving from Tanzania, and Tanzania retaliated by banning Kenyan carriers from its airspace.
The deterioration in relations has impacted Tanzania’s exporters and traders, who are desperate for diplomacy and a return to normality.
But the Tanzanian leader was equally open to doing business with the other East African member states. Tanzania and Burundi have agreed to construct a joint nickel processing plant.
In September last year, Uganda’s President Yoweri Museveni and his Tanzanian counterpart signed a deal that will see the two countries build a 1,445km, $3.5bn crude oil pipeline.
The pipeline, which will be the first of its kind in East Africa, will connect Uganda’s oil-rich Hoima region with the Indian Ocean through the Tanga port in Tanzania. About 80 percent of the pipeline will go through Tanzania.
Uganda chose the Tanzania route to the sea, abandoning the plan to build an oil pipeline jointly with Kenya mainly due to concerns of land compensation costs in Kenya.
In another major infrastructure deal Tanzania signed an agreement to link its new railway line to Burundi and the DRC, while a similar deal with Rwanda is said to be in its final stages.
In May 2018, Rwanda and Tanzania agreed to redesign their joint railway plan, which will start at the Isaka dry port and end in Kigali, to use electric powered trains.
The Isaka-Kigali line will cost $2.5bn, with Tanzania paying $1.3bn and Rwanda $1.2bn. Rwanda will then incur additional costs to extend it to Rubavu and Bugesera, where it is constructing its largest international airport.
Nonetheless, the broad perception of Tanzania’s business sector is that Magufuli made some important government reforms on corruption and easing some business regulations while pursuing policies that secure Tanzania’s national interests.
Magufuli’s blunt approach – which includes a willingness to intervene in domestic markets attracted strong domestic support but spooked some foreign investors and drawn condemnation from Tanzania’s East African partners.
Foreign direct investment (FDI) fell by 43% in the year after Magufuli entered office in October 2015, but Tanzanian GDP continued to grow at an average of around 6% a year, backed by a strong performance in sectors including light manufacturing, mining, agriculture and logistics.
Some believe that the president’s campaign against corruption, although understandably popular with ordinary voters, has restricted liquidity. With the state the largest employer in the market, any blockage to illicit channels necessarily affects the individual wealth of Tanzanians and their ability to spend.
The president’s supporters in the business community argue that the lack of confidence in Tanzania’s economy is misplaced. They say that negative political headlines, a controversial coronavirus response and well-documented tension with multinational firms have led to an international reputation lacking nuance.
Despite economic reforms that weigh on the private sector, including the crackdown on corruption and tax rises, many business people in Tanzania voted for Magufuli.
Magufuli’s first term was marked by a strained relationship with business, with several incidents sending shockwaves through the investment community.
Magufuli had a combative attitude to the natural resources sector.
In 2017, Acacia Mining, Tanzania’s largest gold-miner, was slapped with a $190bn retrospective tax bill for failing to pay royalties on alleged undeclared exports. Canada’s Barrick Gold – which gained full control of Acacia Mining in 2019 – agreed to settle the dispute by paying the Tanzanian government $300m and ceding 16% ownership of its three mines in the country.
Barrick agreed to create a joint venture with the government, Twiga Minerals, to manage the company’s assets and to oversee a 50/50 economic benefit sharing deal, but outstanding issues are still being worked out, according to Barrick.
Despite its controversy, the Barrick saga set the stage for how Magufuli would engage with foreign companies in Tanzania.
He overturned two agreements with China negotiated by his predecessor Jakaya Kikwete, arguing that they were not good deals for Tanzania. Commenting on a $10bn development to build East Africa’s biggest port in Bagamoyo, 50km north of Dar es Salaam, Magufuli said only a “madman” would accept the terms.
While the aggressive approach has stunted investment in key sectors and projects, Tanzanians applaud Magufuli’s uncompromising attitude, in which he paints himself as a regional champion against neo-colonial interests. His tough approach finds unlikely allies in the country’s private sector.
Indeed, Magufuli may be more pragmatic than observers think. Although it still remained below the $1.5bn recorded in 2015, FDI had risen to $1.1bn in 2020. And along with reaching a deal in the mining sector, Magufuli’s government has made concessions to companies looking to develop Tanzania’s offshore gas industry. Estimated reserves stand at around 58 trillion cubic feet – just under half of the estimated potential in neighbouring Mozambique.
In 2017, the government introduced legislation for the extractive sector that raised taxes, established arbitration in Tanzania and deemed that “unconscionable” contracts could be unilaterally renegotiated by the government. These laws delayed any possible deal between gas companies Shell and Equinor and the government, further prolonging development.
However, the government has quietly rescinded some of its earlier demands, says Thomas Scurfield, Africa economic analyst at the Natural Resource Governance Institute.
“Early this year the government started to introduce an arbitration act that essentially allows international arbitration with an international body to take place, so long as arbitration is physically taking place in Tanzania,” he says.
This may help to move forward the $30bn project, which has been floundering since 2014. Still, with low gas prices and unfavourable regulation, analysts do not expect the project to come online for several years – delaying an important foreign currency earner for Tanzania.
Magufuli demanded for an accountable state—play by the rules. A zero-tolerance policy on corruption in Tanzania has made engagement with the local authorities much easier.
Taxes have been removed in key sectors to encourage industrialization, and the business community argues that the government has introduced positive reforms and made efforts to shed the less successful parts of its statist DNA.
For instance, an association of cashew nut producers persuaded the government to remove excise duties and VAT on vacuum bags used to package nuts within six months.
Jumanne Mtambalike, CEO of Sahara Ventures, an accelerator and tech-consultancy based in Dar es Salaam, believes that Tanzania’s inability to broadcast its positives is a major reason why the country fails to attract foreign investment.
The failure to communicate Tanzania’s strengths is partly a product of the Magufuli administration, which too often showed an active disregard for its international reputation.
While journalists writing a negative story about Magufuli in Swahili risk jail time, the same story in English – which is less widely spoken – will arouse limited attention.
The president prioritized his reputation among a support base of mostly lower income citizens in rural areas.
Magufuli’s seeming carelessness towards his international reputation returned to the fore during the coronavirus pandemic.
Unlike many other African countries, Tanzania downplayed the pandemic’s impact and avoided lengthy lockdowns.
When Magufuli declared Tanzania “Covid-19 free” in June, he made no effort to rectify a torrent of negative press, even though some claim his statement was taken out of context. His bizarre claim that Covid-19 tests were inaccurate due to a goat, papaya and paw paw testing positive in a lab was allegedly a joke made in Swahili – but was perceived as a serious statement elsewhere.
Such gaffes have obscured real progress made in Tanzania, some say. Local businesses point to Tanzania’s recent graduation to lower-middle income status as defined by the World Bank.
The country also moved up three places in the World Bank’s Ease of Doing Business Ranking in 2020, although it still came 141st out of 190 countries. The difficult business environment is one of the main reasons that Tanzania’s economy has been gradually dwarfed by that of neighbouring Kenya, which occupied 56th spot in the Ease of Doing Business Ranking.
Despite its bountiful natural resources, its location in a strategic position for facilitating trade to the rest of East and Central Africa and its larger population, Tanzania has not kept up with its more liberal neighbour. In 2019 Tanzania’s GDP was $63.2bn, almost a third smaller than Kenya’s $95.5bn.
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