Magufuli now mends ties with big business

Dar es Salaam. President John Magufuli yesterday inaugurated a $120 million (Sh240 billion) fruit processing factory in the outskirts of Dar es Salaam, during which he signaled a thaw in relations with big business.

The President was full of praise of the investment by one of Tanzania’s most prominent businessmen, Mr Said Salim Bakhresa, and promised to support his expansion plans.

Yesterday’s launch of the factory was the Dr Magufuli’s first function to preside over the opening of a mega project that fits into the government’s industrial development drive as the flagship of the new administration.

The investment in Mwandege, Mukuranga District, has the capacity to process between 20,000 and 25,000 tonnes of fruit per year and employ 600 permanent workers, according to company officials. It is the second Bakhresa investment in the area, which brings to 13 the number of factories owned by the businessman in Dar es Salaam and Coast regions alone.

The grand opening of the facility was in itself significant because it appeared to signal a new chapter in relations between the government and private investors. The government has lately been perceived as driving an agenda that was anti-investment.

It would not be lost to observers that the meeting brought together President Magufuli and Mr Bhakhresa whose businesses were among those that were jolted by the new government’s tax crackdown.

An Inland Container Deport (ICD) belonging the Bakhresa Group in Dar es Salaam was among several that were ordered closed in the early days when the government launched a far-reaching tax evasion and anti-corruption operation targeting the Dar es Salaam Port operations.

Other businesses in the Bhakresa stable were also said to have come under pressure from the taxman as President Magufuli personally spearheaded a government drive to ensure private companies paid taxes, including backdated charges.

An estimated 1000 tonnes of sugar belonging to the company has been withheld at the port for more than eight months now over a tax dispute. TRA was due to auction the merchandise that was withheld at the time that a ban was imposed on imported sugar. But President Magufuli yesterday ordered that the consignment be released to the businessman. It was not immediately clear whether the tax dispute had been resolved.

Members of the private sector worry that Magufuli’s war on tax evaders might scare away foreign investors or lead to price speculation. The President recently warned that he would order the central bank to print new currency so that those who are hoarding cash suffer for it.

Investors who have expressed concern over unpredictability of the investment climate and apparent lack of direct engagement with the State would, however, be pleased that the President pledged to support and work closely with businesses that support economic growth and create jobs. “I like businesses that pay tax and hate those which don’t. I like businesspeople who create jobs for Tanzanians and you have created jobs for juice vendors in Dar es Salaam and farmers as well,” the President told Mr Bakhresa.

He asked the tycoon to expand his businesses by establishing fruit processing plants in other zones of the country to benefit more Tanzanians, promising he would support the expansion efforts by allocating him land for free. He also extended him an invitation to establish a sugar factory and pledged 10,000 acreas for the purpose.

When the Head of State arrived at the plant premises, he was first taken through the factory where he received briefings on its operations . “We seriously need the businesspeople of your kind and my government will cooperate with you. You created employment, paid taxes and anyone who is against you is a devil,” said Dr Magufuli.

He also ordered Tanzania Electric Supply Company to ensure the factory was supplied with 10 megawatts needed by the plant before the end of December.

Other challenges expressed by the company include too many regulatory agencies, land problems and too much charges on some imported items as raw materials which the government promised to work on.

However, Dr Magufuli challenged Mr Bakhresa to start producing industrial sugar locally promising to give him free land for sugarcane planting and establishing the sugar processing plant.

He said Tanzania has enough land and threatened to revoke ownership by some former leaders who ammassed land that they are not developing.

Industrialisation He said there were people who have stashed huge amounts of money, and called on them to invest it in establishing industries.

Tanzania’s industrialisation drive aims at ensuring that the sector employs at least 40 per cent of its working age population by 2025. Minister for Industry, Trade and Investment Charles Mwijage said there were new industries being established in the Coast Region and these would start operations soon.

They include a tiles-manufacturing plant which he said will be one of the largest industries in East and Central Africa with a capacity to generate 80,000 square metres per day.

“About 60 licences have been issued for industries so far but that is little compared to what we want in our industrialisation drive. A lot of things are happening on the ground,” said Mr Mwijage.

Coast Regional Commissioner Evarist Ndikilo who also attended the launch said the region was branding itself as an industrial zone and invited different kinds of investors.

He said the region has 88 factories with 53 of them being in Mkuranga District.

“Our region is close to the port, airport, main roads and even close to the largest market, which is Dar es Salaam. That is the advantage we want to utilise to attract industrial investment,” said Mr Ndikilo.

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