COMMENT
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MAGUFULI’S WAY,
OR THE HIGHWAY
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egative perceptions about a country are likely to
deter investment, especially if it involves a long-term
commitment like building a new mine. Recent bad
publicity about Tanzania and its president, John Magufuli,
has created perceptions of yet another anti-business basket
case, power drunk on the admiration of his people.
Soon after his election in November 2015, Magufuli had the
investor community eating out of his hands. His no-nonsense,
straight talking manner and vows to rid the country of
corruption made him the new ‘African messiah’. But the love
affair between business and John Joseph Magufuli was stillborn.
The president delivered on his promises and really started
clamping down on corruption, which caught most by surprise. It
wasn’t just the usual populist rhetoric by a desperate politician.
Magufuli meant business. His purge included not only crooked
government officials, but he took straight aim at those that
sung his praises so loudly at the beginning of his tenure yet
kept previous corrupt regimes in power for so long. Doing
business in Tanzania was never going to be the same, and it hurt
those that had become part of the patrimonial system – most
importantly business.
Those that are not, have already left Tanzania; are in the process
of doing so, or are fighting legal battles to stay out of prison.
The economy has taken a hit as a result, but the cleansing
process has flushed out the fly-by-nights and those not
committed to building a prosperous Tanzania. Dar es Salaam is
a vibrant and fast-growing city, and, with the help of Chinese
contractors, Tanzania’s infrastructure is getting a facelift. A new
railroad system will soon connect the cities of Dodoma and Dar
es Salaam, and the Julius Nyerere International Airport boasts
a new, world-class terminal. Mining is a long-term play, and in
Tanzania, for at least the next six years, the Magufuli way is the
only way.
Leon
Suddenly, Magufuli was enemy number one and analysts
warned about investing in Tanzania. Sure, Magufuli is not as
business-friendly as we would like him to be, but at least he’s
consistent. In the short term his economics will
hurt those who historically depended on the
goodwill of a corrupt system. In the long
term, however, the Magufuli way is
bound to reap rewards. Tanzania
offers huge opportunities which
are often overlooked as a result
of negative perceptions.
I’ve just returned from a trip to Tanzania, and on the ground,
the political and economic situation is a lot different from that
portrayed in the media. Magufuli is popular amongst his people,
and the business fraternity not implicated in corrupt dealings, is
positive about the impacts of his reforms.
www. africanmining.co.za
African Mining Publication
African Mining
African Mining October 2019
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