EDITORIAL: Tanzania descends into authoritarianism
The most egregious act of government has been to claim $190bn from Barrick’s Acacia Mining in taxes, fines and interest, which is about 200 times the mine’s gold reserves
The brief arrest of two members of the international non-governmental organisation Committee to Protect Journalists (CPJ), Angela Quintal and Muthoki Mumo, in Tanzania last week serves as a depressing reminder of the gradual descent into authoritarianism of one of Africa’s most promising countries.
Quintal, the Africa programme co-ordinator, and Mumo, the sub-Saharan Africa representative of the CPJ, were released after a harrowing episode in which they were detained for no apparent reason, driven to a remote area of the economic capital Dar es Salaam and questioned by what were apparently state security operatives. The trip by the duo was not secret since the CPJ does not operate in a clandestine way. It was in fact sanctioned by the state-recognised Media Council of Tanzania.
It was primarily a networking and fact-finding mission to gauge media freedom in President John Magufuli’s Tanzania, and what they discovered first-hand reflects widespread media repression and an increasingly bizarre administration under the whip-hand of Magufuli, nicknamed “The Bulldozer”, whose personal paranoia is now a major feature of the administration.
As Magufuli’s popularity declines, so his peculiar economic interventions have increased. Only this month, Magufuli tried to force up the price of cashew nuts, a major crop in Tanzania.
As is now widely known, Magufuli began his presidency full of high hopes, vowing to fight corruption and curb government spending. But as the administration has become more aberrant, Magufuli’s popularity has begun to fall and the economy is showing signs of slowing from the blistering pace it set prior to Magufuli’s presidency. He is widely feared inside and outside of government, and the usual array of opposition politicians, members of the LGBT community and the critical media have been ruthlessly targeted.
As Magufuli’s popularity declines, so his peculiar economic interventions have increased. Only this month, Magufuli tried to force up the price of cashew nuts, a major crop in Tanzania. Nut buyers rejected the new state-declared price, which was much higher than the international price. Undeterred, Magufuli ordered the Tanzania People’s Defence Forces to buy the produce at almost twice the market rate. The effort was clearly a political ploy since the major nut-growing region, Mtwara, is an opposition stronghold and the intention was to increase the president’s popularity among nut growers in this region. However, to do so, Magufuli has acted in defiance of simple market economics typical of his benighted and archaic socialist ideas.
Magufuli’s most economically damaging economic intervention has been to change the mining laws, making the country effectively a no-go investment destination. In 2016, he introduced legislation that requires at least a 16% government free carry, increases royalties on metals exports from 4%-6%, allows the government to cancel or renegotiate gas and mineral contracts, and forbids companies from seeking international arbitration.
The most egregious act of government has been to claim $190bn from Barrick’s Acacia Mining in taxes, fines and interest, which is about 200 times the mine’s gold reserves. Magufuli is a former high-school chemistry teacher and, according to industry specialists, the claim is based on his own calculation of the value of gold plus other mineral content of the ore. Magufuli’s claim is that the total value of the ore ought to reflect the value of all its content, but in fact ore with additional mineral content is sold at a discount because special processes are necessary to remove the non-gold content.
The descent of Tanzania into authoritarianism is having destabilising effects on the country and the region. The pure irrationality of Magufuli’s policies is a sobering counterpoint to the attempts by many African countries to adopt workable, modern and rational economic solutions to the continent’s many pressing developmental issues.