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‘A certain president Magufuli’

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Africa’s natural resources have been the bedrock of the continent’s economy and continue to represent a significant development opportunity for her people. In terms of natural resources, it is the world’s richest continent with about 50% of the world’s gold, most of the world’s diamonds and chromium, 90% of the cobalt, 40% of the world’s potential hydroelectric power, 65% of the manganese, millions of acres of untilled arable farmland, as well as other natural resources like salt, uranium, copper, bauxite, silver, petroleum and cocoa beans, woods and tropical fruits.

Despite this vast resource, the bulk of Africans live in unnecessary frustration, hopelessness and poverty, die of preventable disease, or run to the West to gain appreciation! A World Bank study in 2013 identified Africa as the world’s poorest inhabited continent.

The trouble with Africa is simply a failure of leadership. Africans have the capacity to end poverty: what really then is lacking is the will to do so. And that will is largely locked in the hands of our leaders. Africa needs transformational leaders who have the will to bring about change: positive change! Aside the need for transformational leaders, Africans also need to create and empower civil societies that hold leadership accountable.

Citizens must have the power to put pressure on leadership and shape the leaders that best represent their interest. I see traits of such transformational leadership in the recently elected Tanzanian president, John Pombe Joseph Magufuli. Since entering office in November 2015, he has embarked on a number of initiatives and cost-cutting moves designed to stem corruption and unnecessary spending in Tanzania: a country with tremendous potential but one in which the average income is $79 a month (World Bank, 2014).

It may be early days yet and maybe too short a time to start rejoicing but the few reforms he has been able to make in Tanzania already are impressive by African standards, to say the least. Someone has already even coined a verb: to MAGUFULIFY which means “to render or declare action faster and cheaper; to deprive (public officials) of their capacity to enjoy life on taxpayers’ money; to terrorize lazy and corrupt individuals in the society.”

The conspicuous and gluttonous consumption, at the expense of taxpayers, displayed by most African public officials is disgusting. Many public officials convert public funds to private use.

Many of them find it difficult to separate personal money from public funds and hence their reckless extravagance at public expense. All these happen in the face of growing dilapidated public infrastructure, poverty of the people and annoyingly their repeated calls for their citizens to bear with austerity measures, when they themselves continue with their wasteful spending.

In most African countries, public officials spend whopping sums of money (mostly in billions of US Dollars) on foreign and domestic travel in just one year. And one wonders how our foreign donors see us when we keep going abroad for foreign direct investments! In Tanzania, the Controller of Budget’s report for the financial year 2014/2015 shows that the National Assembly and the Senate spent Sh4.14 billion (~US$ 1,894,050) on domestic and foreign travel.

This translates to roughly Sh9.95 million (~US$ 4,552) per member on foreign and domestic travel. An opportunity cost analysis by Nation Newsplex and the Institute of Economic Affairs reveals that the total amount is enough to buy 16 radiotherapy machines (at about US$ 118,950 each) and increase by seven times the number of cancer patients that would have access to radiotherapy treatment in the country.

In Zimbabwe recently, Mugabe celebrated his 92nd birthday with a lavish party and huge cost, all estimated to cost US$800,000 in the drought stricken Masvingo Province; where 75% of staple maize crop failed because of a drought.

The drought has left 3 million people in need and prompted the declaration of a state of disaster in most rural areas in the country. In my opinion, the money for this party could have been used to import maize to avert the impending starvation. In South Africa, President Zuma has been facing mounting pressure to step down after a series of scandals including his use of Euro20.5 million (~US$ 15 million) to upgrade his private home in a povertystricken rural area by installing a swimming pool, chicken run and amphitheatre….all at the expense of the tax payer.

He has since offered to pay back, but on what terms? In Ghana, some popular cases of wasteful spending are on Savannah Acceleration Development Authority (SADA), Ministers and Heads of Governmental Agencies’ importation of luxury cars especially Toyota Land Cruisers (V8) for their official duties and the most recent GHC3.16 million branding of buses; all using the tax payer’s money, while a tax payer at a public hospital dies because of lack of oxygen and another tax payer dies because she has a critical medical condition that requires emergency surgery but the surgery can’t happen any earlier because of infrastructural challenges….the only running Intensive Care Unit in the entire hospital has only four beds and that limits the number of ‘ICU’ required surgeries that the hospital can perform at any time!

So let’s go back to President Magufuli of Tanzania…………Who is he? John Pombe Joseph Magufuli was born on 29th October 1959 and assumed office as President of Tanzania, on 5th November 2015. He stood as the candidate of the ruling Chama Cha Mapinduzi (CCM) party.

He was first elected as a Member of Parliament in 1995, served in the Cabinet of Tanzania as Deputy Minister of Works from 1995 to 2000, Minister of Works from 2000 to 2006, Minister of Lands and Human Settlement from 2006 to 2008, Minister of Livestock and Fisheries from 2008 to 2010, and as Minister of Works for a second time from 2010 to 2015.

During his government post as works minister, he was nicknamed the ‘Bulldozer’. As he began his term as President, Magufuli displayed unusual zeal for austerity and impatience with corruption and waste. Saving money is just part of the 56-yearold president’s agenda. The former teacher and chemist is also battling corruption and trying to improve services in Tanzania.

He knows where his country’s priorities lie and understands that wastage of public money (especially by a poor country) is the height of stupidity and impunity. The president’s love of austerity has even inspired a hash tag: #WhatWouldMagufuliDo, that is dedicated to cost-saving and anti-corruption measures. Here are some of the things he has done already within his first 100 days of assuming office:

– He cancelled Independence Day celebrations, traditionally a time for the government to spend big on a public display of nationalism. Instead the time was spent on street-cleaning to improve sanitation and arrest the spread of a cholera outbreak. The money saved was to go toward streetcleaning services. He asked all citizens to pick up their tools and clean their backyards.

– He downsized by more than 90 percent the budget for the opulent state dinner that usually marks the opening of parliament and ordered the money saved to be spent on hospital beds and road works. This was after his first official visit to the Muhimbili Hospital, and seeing the horrible state it was in.

This saved the country over Sh200 million and was used to pay for beds for people lying on the floor and sharing beds. A few days’ later 300 beds were delivered. He dismissed the governing board and got a new team in place, and within days the broken MRI was fixed. He also pared down his inauguration party from US$100,000 to US$7,000 and sent the extra money to the hospital.

– Three days into his term, Magufuli announced a ban on all foreign travel by public officials. They have been instructed to instead make regular visits to rural areas to learn and help solve problems facing everyday Tanzanians. All tasks that required officials to travel abroad would instead be done by high commissioners and ambassadors who are already in place. The country could save up to Tsh32 billion (US$51.1 million)

– He banned the purchase of first and business class air tickets by public officials, although the president, his deputy and the prime minister are exempt.

– He ordered that government meetings and workshops be held in government buildings rather than expensive hotels

– He cut a bloated delegation of 50 people set to tour Commonwealth countries to just four.

– He publicly issued a serious warning to the people he will select as ministers that he would not tolerate corrupt and bureaucratic government officials and that the ministers would have to work tirelessly to serve Tanzanians along with him.

– On 10 December 2015, more than a month after taking office, he announced his cabinet, composed of 19 ministries. It had 11 fewer ministries than the previous government; some ministries were merged to save money.

– Shortly after assuming leadership, he plugged revenue loss loopholes at Tanzania Ports Authority (TPA) and Tanzania Revenue Authority (TRA) where several high ranking officials, including the Tanzania Revenue Authority’s chief, were suspended and others taken to court to answer economic sabotage charges. Dozens of other officials from several public institutions have also been suspended pending investigations over misuse of funds allocated.

– When he had to travel 600km to Dodoma, from Dar, to officially open parliament last week, he didn’t order a private jet – instead, he chose to drive.

– At the National Assembly in Dodoma he clearly sent out the message that it will not be business as usual under his leadership.

– He promised to cut public spending, fight corruption and enhance accountability in public service. He said it is time for Tanzanians to walk the talk.

– Magufuli reportedly told parliamentary leaders that the people of Tanzania want him to solve their problems and not make speeches.

President Magufuli has so far shown a no nonsense approach in taming corruption, laziness and the business-as-usual syndrome among public officials. Indeed, he has left many in Tanzania and beyond impressed.

People are beginning to ask, “If Magufuli can do it in Tanzania, then what’s wrong with our politicians?” But what are his chances for success? It remains to be seen if the wonder will last the proverbial ‘nine days’. But reformers have come and gone in Tanzania before. The opposition party has already coined a phrase in Swahili for the presidential reforms: “Nguvu ya soda” meaning “the power of soda”. Opponents are betting that Magufuli’s reforming spirit will fizzle out like an open bottle of soda in the hot African sun.

Critics say the president’s actions are a mere publicity stunt in an attempt to convince Tanzanians that he is all about work. But others still believe his actions are in keeping with the promises he made to boost the economy, create jobs, root out corruption and ensure public sector institutions work to improve the living conditions of citizens. Magufuli’s role in Tanzania will be talked about and debated by all levels of politics, society and business.

Tanzania is widely viewed as the lead contender for East Africa’s next great economy. And due to its large gas reserves, mineral resources and major port projects, it can possibly become one of the leading African nations in the next decade.

Magufuli’s influence will be felt, and one thing is for sure: Some will like it and others will loathe it. In nations such as Uganda, Zambia and Kenya the impact will be felt in their upcoming elections (Uganda and Zambia in 2016 and Kenya in 2017).

Incoming politicians will likely seek to channel the Magufuli vibe and promise to initiate acts of reform and cut back spending. JOHN Pombe Magufuli may have been a compromise candidate, but less than three months after taking over as Tanzania’s president; his radical reforms have the region in awe.

Comparisons are being drawn to the enigmatic Rwandan president Paul Kagame, whose country is seen as a hope of East Africa, calling the latest actions by Magufuli the “Rwandanisation of Tanzania”. President Paul Kagame of Rwanda is also driving change and making things happen in Rwanda.

He is described by the International Telecommunications Union as the “Digital President”, and has invested over $100 million in broadband internet with over 50% of the population using mobile phones and also has a ZERO tolerance for corruption.

AFRICA NEEDS MORE OF SUCH LEADERS! It is clear that what Africa needs is dynamic, creative, focused and disciplined leadership. Countries can and should be run like business organizations with all that goes with responsibility, aims, strategies and envisaged outcomes if they are to have any positive impacts on their citizens.

All the major revolutions, including those in France, Russian, and Cuba, took place because there was a complacent, insensitive, self-absorbed elitist engaged in wasteful spending and vanity projects while the majority of the population lived in poverty. If public officials do not learn lessons from history, they themselves may become mere footnotes in future history books.

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Tanzania

Tanzania’s economy to grow by 6.8% in 2019

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The World Bank suggests Gross Domestic Product (GDP) growth in Tanzania to likely slowdown to 6.6% for the year 2018 from a 7.1 per cent expansion in 2017.

This year 2019, the Bank estimates that Tanzania’s economy will grow by 6.8 per cent and rise to 7.0 per cent in 2020.

But the government expects Tanzania’s economy to grow by 7.2 per cent in 2018 and accelerate to 7.3 per cent in 2019, despite a slowdown in credit to the private sector and rising bad loans in the country’s banking sector.

The state-run National Bureau of Statistics (NBS) said in December that Tanzania’s GDP grew by 7.0 per cent in the first half of 2018 from a 6.7 per cent rise in the same period a year-ago, while the country’s inflation rate dropped to a 10-year low in November, helped by slower rises in food prices.

National Bureau of Statistics – Tanzania

“In fast-growing countries, such as Rwanda and Tanzania, the (economic) expansion will be supported by public investment in infrastructure and strong agricultural growth,” said the World Bank in it 264-page report.

“Inflation is expected to pick up across the (Sub-Saharan Africa) region in 2019, reflecting the pass-through of currency depreciations during 2018 and domestic price pressures among metals exporters and non-resource-intensive countries … price pressures are likely to intensify in Kenya, Tanzania and Uganda.”

Tanzania’s annual headline inflation rate rose marginally to 3.3 per cent in December from 3.0 per cent in November, the lowest inflation in a decade.

The International Monetary Fund (IMF) warned last month that a credit squeeze coupled with a slowdown in government spending could dampen prospects for faster economic growth in Tanzania.

The lender, which warned that nearly half of Tanzania’s 45 banks are vulnerable to adverse shocks and risk insolvency, forecast the economy by 6.8 per cent this year.

The government plans to raise spending by 2.4 per cent in the 2018/19 fiscal year with the fiscal deficit expected to increase on the back of higher infrastructure spending.

The fiscal deficit is seen reaching 3.2 per cent of GDP in 2018/19 fiscal year (July-June), up from around 2.1 per cent in 2017/2018, according to data from the Ministry of Finance and Planning.

Elsewhere, the growth of the global economy is expected to decelerate to 2.9 per cent this year compared with the three percent in 2018, the World Bank said in the report, citing elevated trade tensions and international trade moderation.

A slump in the global economy will continue in the coming year, with 2020 growth estimated at 2.8 per cent, according to the report.

“Risks to the regional outlook are tilted to the downside. On the external front, slower-than projected growth in China and Euro Area, which have strong trade and investment links with Sub-Saharan Africa, would adversely affect the region through lower export demand and investment,” the World Bank said.

“Moreover, Sub-Saharan African metals producers would likely be among the hardest hit by escalating trade tensions between China and the United States, as metals prices would fall faster than other commodity prices as a result of weakening demand from China.”

Sharp currency declines would make the servicing of foreign currency-denominated debt, already a rising concern in the sub-Saharan African region, more challenging, the Bank said.

Overall, real GDP growth is estimated 6.6% in 2018, down from 7.1% in 2017. The services sector was the main contributor to GDP (39.3%). Private investment was the main demand-side contributor (63.9%). The external sector stymied economic growth as the current account deficit increased (despite the real depreciation of the Tanzanian shilling), due to a higher volume of imports in 2018 than in 2017. The increase is due largely to increased imports of transport equipment, building and construction materials, industrial raw materials, and petroleum products for large public investment projects, such as the Standard Gauge Railway. The import bill also increased as a result of the rise in the price of key commodities, such as crude oil.

The fiscal deficit increased to an estimated 3.9% of GDP in 2018, due to increased capital spending on infrastructure projects. Public debt increased to an estimated 39.3% of GDP in 2018 from 38.2% in 2017. External debt accounted for about 74.9% of total public debt in 2018. The risk of debt distress remains low because public external debt, at 34.5% of GDP, is mostly concessional.

Monetary policy was more accommodative in 2018 than in 2017. This increased domestic liquidity and reduced lending rates, leading to greater private credit supply. Due to improved food supply, inflation eased to an estimated 3.5% in 2018.

Tailwinds and headwinds

The medium-term outlook is positive, with growth projected at 6.8% in both 2019 and 7.0 in 2020, supported by large infrastructure spending. Headline inflation is projected to marginally increase to 5.2% in 2019 and 5.1% in 2020 due to increased government spending.

But the positive outlook faces several downside risks: growing private sector concerns about economic policy uncertainty and increased domestic arrears that could derail the government’s fiscal consolidation and harm the private sector.

Key economic development challenges include slow progress towards inclusive growth, infrastructure bottlenecks, and vulnerability to climate change. Poverty and income inequality remain high despite high economic growth. Infrastructure bottlenecks are most notable in the transport and energy sectors. Reliance on rain-fed agriculture has exposed farmers to income shocks. And inefficient public enterprises present a fiscal risk. One of the development challenges on the social front is youth unemployment, which increased to 7.3% in 2016, compared with 5.7% in 2012.

Key opportunities include peace and political stability, abundant natural resources, a strategic geographic location, and immense development potential for tourism. The Export Zone Processing Agency established in 2008 to accelerate manufacturing exports and help the country achieve structural transformation has helped attract close to $1 billion in foreign direct investment and revive the manufacturing sector into one of the fastest growing in Africa.

 

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