Tanzania's ruling party candidate John Magufuli wins Tanzania Presidency with gas to tax reform vow

John Magufuli, Tanzania’s President-Elect

Tanzania’s ruling party candidate, John Magufuli, won a presidential election in Africa’s third-biggest gold producer with pledges to hasten development of the country’s nascent natural-gas industry and reforms to boost tax revenue.

Magufuli, 55, defeated his closest rival, former Prime Minister Edward Lowassa, by a margin of 58.4 percent to 39.9 percent in the Oct. 25 election, National Electoral Commission Chairman Damian Lubuva told reporters Thursday in the commercial hub, Dar es Salaam.

The newly elected president, who is to be sworn in on Nov. 5, will soon announce measures to accelerate development in the nation’s gas industry, campaign director January Makamba said in an interview.

Tanzania is looking to diversify its $49 billion, mostly agrarian economy, into production of the fuel, with an estimated 55 trillion cubic feet of reserves that are the biggest in East Africa after Mozambique. Statoil ASA, based in Stavanger, Norway, and the U.K.’s BG Group Plc may build the nation’s first liquefied natural gas plant at an estimated cost of $15 billion.

“What is going to happen immediately is to remove all the impediments that have been stopping the gas development like land and location issues, so that the companies are given an opportunity to make the final investment decision,” Makamba, who is also Tanzania’s deputy communication minister, said in an interview in Dar es Salaam. “This nation has an opportunity to prosper from gas, and Magufuli intends to use it for revenue but also to boost electricity generation by at least 3,000 megawatts in five years.”

Magufuli served as works minister in outgoing President Jakaya Kikwete’s cabinet. He’s been nicknamed tingatinga, Swahili for bulldozer, because of the zeal he showed in the post. Lowassa defected to the opposition in July after failing to secure the nomination of the ruling Chama Cha Mapinduzi party as its presidential candidate. The opposition Chama cha Demokrasia na Maendeleo rejected the outcome, saying the electoral authority inflated the number of votes for Magufuli.

“All means necessary are being used to rig the election,” Lowassa, who was Chadema’s candidate in the election, said in a post on his Twitter account.

Magufuli, a former chemistry teacher, served as a lawmaker for two decades, within which he held several ministerial portfolios.

“He is going to be a very results-oriented president and will have no problem firing non-performers,” Makamba said. “He is going to transform the civil service and we will see a new sense of urgency.”

New industries are planned, including beef-processing, while the fight against corruption will be intensified, Makamba said. The Tanzania Revenue Authority is going to be restructured to improve efficiency and the government plans to reduce tax exemptions to 1 percent of gross domestic product from as high as 4 percent currently, he said.

Source: Bloomberg Business