NAIROBI (Reuters) – When Tanzanian President John Magufuli criss-crossed the country on the campaign trail ahead of Wednesday’s elections, he touted the billions of dollars his government has spent on a new hydropower dam, a railway and a revived national airline.
“Effective leadership must plan and prepare well,” he told a rally in northern Tanzania last week, reeling off figures on how government revenues had nearly doubled, helping fund the railway and dam.
Magufuli is standing for a second term in the elections, which will also vote in a new parliament. He promises voters his projects will turbocharge growth in East Africa’s third largest economy, even as the private sector complains it is being made to pay too high a bill.
The 60-year-old president’s nickname – “The Bulldozer” – is testimony both to his fondness for massive public works and his reputation for pushing through policies despite opposition.
Both make him popular with many Tanzanians, despite international wariness over his handling of the coronavirus pandemic – he had some colourful criticism of testing then unilaterally declared COVID-19 over. Independent media and political opponents also say they are facing an escalating crackdown. The government denies there is such a crackdown.
Magufuli’s investments and his refusal to shut down Tanzania’s economy this year have buoyed his already strong chances of winning a second five-year term.
His two main challengers, veteran opposition leader Tundu Lissu and former foreign minister Bernard Membe, could split the opposition vote with 12 other candidates. The election commission disqualified dozens of opposition parliamentary candidates.
Some iteration of the ruling party has held power since independence in 1961.
State-led projects have fueled average growth of just below 7% over the past five years, official figures say, propelling Tanzania to lower middle income status this year. Under Magufuli, construction has become the main driver.
The government projects economic growth this year will be 5.5% despite COVID-19 battering tourism in places like Zanzibar. The World Bank predicts only 2.5%.
Jens Reinke, the International Monetary Fund’s representative in Tanzania, told Reuters he “is cautiously optimistic” the mega-projects will contribute to sustainable growth, but risks remain.
Some voters in the nation of 58 million are less skeptical. Gardener Jackson Mwase, 35, praised Magufuli for improving Dar es Salaam’s infrastructure.
“However, some colleagues don’t have money because there are no jobs,” he told Reuters. “The upcoming government should increase salaries.”
Magufuli has promised to raise wages if he is elected.
PRIVATE SECTOR WOES
As public construction booms, Magufuli’s effort to wring more revenue from the private sector has alienated investors.
Mining reforms passed in 2017 stipulating a 16% government stake in projects make it hard for companies to secure financing. The government had a long fight with Acacia Mining over alleged under-reporting of revenues. Barrick Gold, which took over Acacia last year, ended up paying $300 million to settle the dispute.
“It is extremely difficult for us to get … investment,” a mining executive told Reuters on condition of anonymity to avoid antagonising officials. “There is quite a large percentage that the government is demanding.”
Last year Tanzania displaced Venezuela as the world’s least attractive mining jurisdiction, according to the Fraser Institute’s 2019 investment attractiveness index.
Between 2015 and 2018 foreign direct investment dropped by a third, from $1.5 billion to $1.0 billion, the World Bank said.
“Moody’s expects policy unpredictability and a generally adverse business environment to hamper investment,” ratings agency Moody’s said in August. “This will hinder Tanzania’s capacity to sustain high GDP growth.”
Aidan Eyakuze, executive director of civil-society body Twaweza East Africa, described Magufuli’s economic policies as highly centralised “muscular nationalism”.
“I just wonder whether foreign investors will be a bit shy about the prospect of such assertive management of their assets,” he said on Thursday during an online panel about the elections.
(Editing by Katharine Houreld and Frances Kerry)
