Tanzania: Magufuli undermines investor confidence

East Africa

Published on Wednesday, 15 March 2017 Back to articles

Earlier this month, whilst on a tour of the Tanzanian towns Lindi and Mtwara, President John Magufuli’s administration undermined investor confidence in Tanzania’s strategically important mining and cement production industries.

Magufuli promulgated a ban on the export of copper/gold concentrate at a public meeting on 2 March. It is difficult to identify the main reason for the ban, but East Africa Politics & Security believes it may be to put pressure on Acacia Mining in the context of the ongoing tax disputes between the Tanzanian government and the London listed gold miner. Forcing through the state’s industrialisation agenda is also a possibility.

During the same trip, President Magufuli ordered the detention of an Indian contractor, Rajendra Kumar, who is allegedly responsible for the delays in completing a village water supply project. In a video clip published by the State House’s Communications Office, a visibly angry and frustrated Magufuli strode through the site followed by silent officials and cowed contractors.

Having called for the seizure of his passport — to be held until the project’s completion — Magufuli then ordered the Regional Commissioner (RC) to detain the contractor. The RCs have sweeping powers of detention although it is very unusual for a foreigner to be detained. The legal grounds for seizing the passport are, at best, doubtful. However, a statement from the State House confirmed the order to be directed at one Rajendra Kumar and ‘his assistants’.

Such outbursts are not unusual with Magufuli and have led some to question his emotional and mental stability. It does illustrate his relationship with senior officials, from whom Magufuli expects complete loyalty.

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