KAMPALA – In just five years, Magufuli has cemented his legacy, clearly demonstrating that indeed with steadfast leadership, it is possible to sustainably transform a country. From the onset, Magufuli knew that fixing government inefficiencies, cutting back on wasteful expenditure, and widening the tax would avail the country sufficient resources needed to bolster the economy.
Shortly after taking office in late 2015, he canceled the symbolic Independence Day fete and directed all the funds budgeted for the event to be used to widen a part of a highway at Ubungo that was notorious for gridlocks in the main city of Dar es Salaam. This action saw Twitter awash with praise of the man and emergency of the hashtag #WhatWouldMagufuliDo?
Citizens across Africa started mocking their governments and leaders to perhaps emulate the actions that Magufuli was taking to stop wasteful spending.
In just five years of his leadership, Magufuli’s ambitious social and economic projects largely financed by domestic resources, elevated Tanzania to lower-middle-income status in 2019, four years after he took office with Gross National Per Capita – a measure of economic activity or how much is produced in the country growing from $1,020 to $1,080 between 2018 and 2019 and above the $1,036 threshold for lower middle income. He widened the tax base and instituted measures to ensure tax compliance across Micro, Small, and Medium, businesses firmly keeping the Debt to Gross Domestic Product ratio under 40 percent, the lowest in the East African region.
In his first week in office in November 2015, Magufuli halted all foreign trips for public servants and put approval of these trips in his office or head of civil service. This move helped save the country $430m between November 2015 to November 2016 according to a central bank report in early 2017.
Such resources are what the country has used to provide free education, enhance remuneration for teachers and other public servants.
With minerals in Tanzania contributing about 4 percent to the Gross Domestic Product, Magufuli quickly turned his guns to the minerals industry. First, by firing the mining minister and chief of the state-run mineral audit agency following an investigation that revealed that Acacia mining – one of the country’s largest mineral export company was under-declaring the mineral exports. The company [Acacia] was later slapped with a $190m tax bill for historic income tax spanning 17 years. Even though Acacia ended up paying $300m to the Tanzanian government to settle all disputes, the purge on the mineral sector was the beginning of sweeping reforms. The National assembly later passed three bills that effectively overhauled Tanzania’s mining policy regime. The reforms included an increase in the royalty rate on gold from 4 to 6 percent, a government stake of 16 percent share in mining companies without compensation, and local content regulation requiring at least at-least 20 percent of the mining company operating in Tanzania owned by Tanzanian citizens.
These reforms have indeed paid off and pushed the mineral sector contribution to GDP 2018/19 to 5 percent from about 4 percent in 2016/17.
In 2015 Magufuli’s government abolished fees for public secondary schools, which led to a surge in enrolment and increased the transition from Primary to secondary education which only stood at 52 percent before free secondary schooling.
There are many achievements that Magufuli realized during his five-year term including the resumption of the national carrier, expansion of the airport, power distribution, improvement in public transport among others.
Although critics have accused him of high-handedness and suffocation of media freedoms, his achievements have laid a firm foundation for the country’s lasting economic transformation and if sustained, Tanzania is set for take-off. He goes to rest leaving behind a legacy that will last forever and a very strong message that indeed you can do so much just in five years with solid leadership and your country at heart.
Nathan Were is an access to Finance Specialist.