Speaking at the Financial Times Summit in London on Monday, Dangote, 60, said Magufuli is nationalist in his thinking and is trying to seize a majority shareholding of companies in Tanzania that are owned by foreigners.
Earlier this year President Magufuli signed a new mining bill into law which allows the government to take as much as 16% of foreign-owned mining companies for free. “The Government is coming through the back door to seize the assets,” Dangote said. “They can come back in the next few years and take a majority of the shares at their price.” “It’s the wrong policy. Once you chase an investor out, it will be very difficult to bring that investor back.”
Last year, Magufuli approved a new finance bill which requires all mobile telecom companies operating in Tanzania to float 25% of their shares on Dar es Salaam’s thinly traded stock exchange. Vodacom, the country’s largest mobile phone company, has since complied with the directive. The government mopped up most of the shares on offer.
The Tanzanian government has also asked Acacia Mining, a subsidiary of gold mining company Barrick Gold, to pay approximately $190 billion in revised taxes, interest and fines – a move that analysts believe could be in line with plans to nationalize mining assets in the country. Acacia has since scaled back some o its operations in the country and the London-listed mining company’s shares have fallen by almost 50% this year.
Magufuli has also put a ban on exporting unprocessed mineral ores in an attempt to compel companies to refine locally and he has raised the royalty rate on gold from 4% to 6%.
“They’ve scared quite a lot of investors and scaring investors is not a good thing to do. Once an investor complains the rest will run away, they don’t even want to hear the details,” Dangote said.
Aliko Dangote is one of the biggest investors in Tanzania. His Dangote Cement, Africa’s largest cement producer, has invested more than $650m in establishing a cement plant in Mtwara region, Tanzania.
Magufuli, who is known as the Bulldozer, came into power in November 2015 promising to clean up Tanzania’s endemic corruption, but pundits have complained about a perceived hostility to foreign-owned businesses in the East African country.