Magufuli: Successful Defender of Sovereign Wealth in Tanzania

Tanzania’s John Magufuli has easily become one of Africa’s most well liked Presidents because of his action oriented approach to leadership. There are many positive changes taking place in Tanzania that are worth noting. Are Tanzanians better today than they were 3 years ago?

YES, and here is why:

1. Wealth Creator

The Tanzanian GDP has been growing at 7% showing confidence in President Magufuli’s economic leadership. President Magufuli’s vision went beyond education as a means to development narrative and instead focused on the biggest avenue for wealth creation. Mining and Telecoms account for 4% of Tanzania’s GDP and Magufuli has mandated that the companies that operate in Tanzania list on the Tanzanian Stock Exchange. This will allow Tanzanians to share in the profits. Most foreign investors ship their profits overseas and do not benefit ordinary Tanzanians because they do not spend the money in Tanzania.

Stock market investing is important because it gives ordinary Tanzanians access to ownership of companies. Most wealthy Americans made their money on the US stock market.

2. Thought Leader:

The fight against corruption was the brainchild of Dr. Magufuli. He has high personal standards and his passion against corruption is commendable and he has been doing it for several years even before he was President. He has been an action oriented leader from the time he entered public service and he raised the standard and developed the reputation of getting work done during his time as Minister of Works.

3. Defender of Tanzanian Wealth

Ever since he became President, he has worked to improve the country’s tax system so that Tanzania can reduce its dependency on aid and debt which rob Africans from autonomy to make their own decisions. Magufuli has informed foreign investors doing business in Tanzania that their contracts will be re-evaluated to ensure that the terms line up with Tanzanian interests.

China for example mandates that all businesses have 51% Chinese ownership and this has created new wealth for the Chinese and approximately 750 million Chinese have been lifted out of poverty. In addition, Magufuli raised mining royalties from 4-6% to defend African interests. To put this in context Donald Trump raised royalties for the aerospace industry by 98%.

4. Leadership in Accountability

President Magufuli has managed the tax payer fund effectively by auditing the Tanzanian payroll and purging ghost workers. In addition, Magufuli fired 10,000 unqualified civil servants who had forged certificates or credentials and saved tax payer funds.

5. Corruption Buster

The model that Magufuli used is now being adopted by other African countries to fight corruption.  Several foreign companies have been busted by custom officials trying to expropriate minerals and not paying taxes. Tax evasion alone costs Tanzania billions of dollars and impedes development. Under Magufuli’s leadership, Tanzania has collected 50% more taxes from foreign tax evaders and increased the government’s revenue base.

6. Foreign Direct Investment Myth buster

The role of foreign investment in the development of African economies has been overly exaggerated by those who want to push this narrative for their own gain. In the history of the world there is NO country that has achieved economic prowess from foreign investment. Most foreign firms in Africa do not pay taxes so their economic contribution is just in creating low paying jobs. Foreign investors want to exploit Africans but have no issues paying taxes to Asian emerging markets because they value Asian and not Africans.

Whether Dr. John Magufuli will be the best President in Tanzania’s history is a question for the scholars. However, his results driven approach to leadership in the past three years has been tremendously beneficial to his country. Despite the negative stories pedaled by western funded NGOs, it is clear that President Magufuli is making a positive contribution in Tanzania.

Sources of Statistics- World Bank; Reuters UK