John Magufuli’s recent moves to restrict work permits for foreigners, not only worries the expat crowd, but effects will be far reaching. An American business owner had to put the business she built over five years by herself in her husbands name and can only run it from her living room as spousal visas don’t allow for work permits. The American Chamber of Business is holding special info evenings to explain the planned regime to their members and struggle to mitigate the negative message the move sends to potential investors.
Native Tanzanians with foreign passports are worried. Since Tanzania doesn’t allow for double citizenship a lot of Tanzanian-Americans or European-Tanzanians have comfortably done business in their home country under the temporary work permit and residency scheme for years. Since Magufuli’s election, uncertainty and insecurity has crept up.
The view from Kenya is not much different. “He will close the country even further. Under Nyerere Tanzania tried to go their own way, Kikwete was open, but Magufuli, he’ll seal the country off again.” This observation from a Kenyan business man with operations in Tanzania is echoed by the thousands of Kenyan teachers that recently had to leave the country after being unable to secure work permits. Civil servants have been turned down at the airport on the way to a family holiday after failing to present evidence that their trip was not funded by Government.
Whilst dibbling in a crystal blue pool in Tanzania’s seaside town Bagamoyo, Allan, a Tanzanian farmer, opines: “Magufuli has a lot of support among the people, but he doesn’t have a strategy. You can’t run a country without a strategy.”
Magufuli’s inability to emphasise with the business community is a common theme. Charles Makoni just closed down his Coca-Cola distribution company in Dar es Salaam, making 10 employees redundant. “After the councils hiked their taxes again this year, my business is not feasible anymore. I’m sad to put people out of a job and to close up shop, but it’s the better option for me.” The losses in VAT, economic growth and jobs far outweigh the benefits gained by the short sighted hike in taxes.
Corruption and taxes are the buzzwords on Magufuli’s agenda. Broadly, it seems Tanzanian’s are supportive of his goals to lessen aid dependency and reliance on foreign investors and instead grow the native tax base. However, it seems the measures target already squeezed formal businesses disproportionality. The swatches of small motorcycle taxi drivers across the entire country and many smallholder farmers are not taxed. Predominantly, those make up his support base. The elite takes note.
What will Magufli do?