A Year On: Magufuli’s Reforms And Tanzania’s Economic Outlook
By Christopher East — From Global Risk Insights
A few weeks ago the World Bank published their ‘2017 Ease of Doing Business Report’: Tanzania performed impressively in this year’s report, climbing seven places in the world ranking. This upward trajectory is largely due to the substantial reforms over the past year in four key areas: business licensing, land reforms, easy registration of businesses and people’s registration. Reports from inside the President’s office suggest that the President has been working closely with the private sector towards improving the business environment and speeding up economic development.
Morocco’s new bilateral trade agreement, signed in Dar es Salaam, gives credence to this optimistic outlook on Tanzania’s investment climate. The two countries signed 22 cooperation agreements, setting the foundations for win-win partnerships in the fields of finance, renewable energy, agriculture, fisheries, air transport, hydrocarbons, mines and also science and culture. There is no doubt that Morocco is on the foreign affairs offences in Africa as part of their campaign to regain their place in the African Union. Despite this, King Mohammed VI has been selective with whom he signs such agreements, signing only with the emerging economic powers of Rwanda, Ethiopia and Tanzania.
Magufuli the reformist
Much of this renewed confidence in Tanzania’s economic outlook is a likely result of John Magufuli’s reformist attitude toward Tanzania’s premiership. A year since his election into the Presidency he has been lauded for his can-do attitude and his fierce approach to clamping down on corruption and the misappropriation of state assets. Magufuli was termed ‘The Bulldozer’ during his time as Minister of Public works, taking a pro-poor stance to infrastructure and aggressively building transport linkages to mobilise and empower Tanzania’s population. As Magufuli puts an end to the pilfering of public money in the Tanzanian government, we are seeing the same steely determination that brought him success building roads to the premiership. Magufuli’s hard-line approach to corruption and indolence has led to the dismissal of 150 senior government officials, garnering widespread support of an electorate fatigued by rampant patronage politics. Such an approach is set to reverse Tanzania’s progression down the Transparency International World Corruption Index, currently 117th out of 175 countries. Two questions, however, remain: how sustainable is this uncompromising approach to the presidency, and will the electorate tire of the increasingly dominant political settlement?
Magufuli: A future despot?
The international community have labelled these administrative reforms as following a trajectory towards a dominant-developmental political settlement. The situation is not dissimilar to the political settlement in neighbouring Rwanda, as Magufuli is steering his party – the CCM – away from corrupt kleptocratic practices towards a developmental outlook, whilst simultaneously clamping down on dissent and any opposition to his reforms: in short, he is emphasising his control rather than the consent of the governed. Many political commentators in Tanzania and abroad have criticised his handling of the CCM’s opposition as restricting the political space, undermining competitive democratic politics; most notably, Magufuli’s handling of the allegedly illegitimate Zanzibari election last year which reran in March, in which he permitted the winner of the election, a CCM candidate, to form a government. Many Foreign Diplomats have chosen not to interact with the new Zanzibar government and the US Aid Agency cancelled a $470m project in Tanzania in protest. Furthermore, Magufuli has banned a number of opposition rallies and switched off live broadcasts of parliamentary sessions. In his year at the helm, Magufuli has made significant improvement in infrastructure and other tangible issues, yet has failed in his mandate of strengthening qualitative governance and developing a pluralistic democratic space.
Tanzania’s economic future
Patronage politics have governed Tanzania’s political settlement for the past 30 years. Magufuli has made substantial progress in kerbing public expenditure and reducing corrupt governmental practices, but Tanzania required shock treatment to rid itself of these entrenched practices. Magufuli has proved he is willing and able to take on the challenge: focusing on domestic resource mobilisation, promising to double the monthly revenue collection over the next five years, and promising to create more jobs through engaging with the private sector. Tanzania’s new trade agreements and climbing in the World Bank’s Ease of Doing Business Index exemplify his short term successes in achieving renewed investor confidence in the country.
There are still a number of questions, however, regarding the long-term success of Magufuli’s administration, and whether he will deliver on his pledge to accelerate economic growth in the country. The trajectory towards dominant-developmental politics, as seen with Kagame in Rwanda, could result in substantial economic revitalisation: Kagame’s two terms have resulted in a doubling of Rwanda’s per capita income. If this is Magufuli’s intended path, he must be wary about losing the support of his party and the electorate; his puritanical pursuit of clean politics and his infringement upon Tanzania’s democratic space have already caused controversy. Tanzania’s economy should be watched with anticipation. If Magufuli is able to navigate the tricky political waters, Tanzania stands to experience a dramatic escalation in economic growth.
Sign up for the AFKInsider newsletter — the most compelling business news you need to know from Africa and the African diaspora, delivered straight to your inbox.