Revealed: The big fat lie of state firms that gave Magufuli dividends

Friday August 12 2022
John Magufuli.

Tanzania's John Pombe Magufuli. PHOTO | AFP


Ordinarily, when a company declares to its shareholders that it is paying them dividends, it is understood to have made a profit, and that the dividend being shared among the shareholders represents a percentage of that profit in the year under consideration. That is corporate governance 101. 

So, when a number of Tanzania’s state-owned organisations paid out dividends to their shareholder, the Treasury of the Government of the United Republic of Tanzania, it was taken for granted that these companies had turned a profit, after years of being in the red. 

The press was rolled out, the president of the republic wasglowing with pride, and corporate managers were licking their lips on television as they handed to their boss dummies of cheques worth billions. 

The presidential press corps and the rest of the cheerleaders in the pliant media hailed the work of these sons and daughters of the soil who had shown how to profitably manage organisations that others before this president had so badly managed. 

We were witnessing a novelty invented by former president John Pombe Magufuli, namely performing parastatals. Things were looking good. 

A huge lie


Only it was a huge lie. Those parastatals were making losses, as they had been all the time, with the inefficiencies and corruption that had dogged them since they were set up by Julius Nyerere in the 1960s and 1970s. 

The difference was that this time round they had been told by Magufuli that managers who were unable to pay dividends to the Treasury would be removed, at the very least. And because paying dividends must follow profits, the managers declared profits. 

To save their backsides, the managers devised a ruse. They would declare that they had recorded profits and would state how much they were giving to the Treasury, even though they knew it was a lie. 

So, what saw those big dummy cheques on television being handed over was a charade Magufuli and his scared officials were enacting to perpetrate a lie. 

Now, how could they maintain this façade when they had to hand over real money to Magufuli as the rest of us watched on the silver screen? 

Monumental scam

Simple. They borrowed from commercial banks, sinking their already ailing enterprises into greater debt, which somebody else would have to pay when the borrowing managers would have retired or died. 

It is a monumental scam authored by a politician who wanted to make people believe that he was a godsend on earth to help the poor and downtrodden. 

He was able to do this, and to commit so many other crimes, only because he had made sure there was no institution to hold him accountable, having neutered parliament and silenced the press. 

Economic hooliganism

It is Magufuli’s successor who is now allowing some light to shine on this economic hooliganism of a president who was so desperate to appear to be doing well that he spared no chicanery, no subterfuge to get what he wanted. 

Samia Suluhu recently berated her officials for duplicity and disingenuity, literally telling them she was up to their tricks under her predecessor, warning them not to repeat them. 

Of course, they could have told her that she was part of the system of false reporting, but we all know that is something quite unlikely to happen — literally impossible. 

It is sad that Tanzanians have embraced a culture of lies to an extent that I can hardly see any way out of it. Everyone acts as if they have to lie even when telling the truth would save them. Our officials are at the top of the lying chain. Though it would be unfair to attribute this culture to Magufuli — lies were told systematically under all the presidents we’ve had. 

I find this kind of lying uncomfortably close to the crime of economic sabotage. If one knowingly does anything whose effect would be to undermine the economic interests of the country, would that not constitute undermining the country’s economy? 

If the answer is in the affirmative, would the false declaration of profits made by a public enterprise when in fact there were losses not suffice to call out such a person as makes such declaration an economic saboteur? 

Intellectual lethargy

Gradually but steadily, we are being disabused of the intellectual lethargy imposed by the Magufuli years when independent thought was anathema. 

It would seem to me that Samia as vice president was shanghaied into complacency and accepting almost anything her predecessor wanted to do or say. 

But, as fate would have it, she is in the driving seat now, and we have seen the wholesome effect that the change has brought to our country. 

May she continue, and may we all stand with her! 

Jenerali Ulimwengu is now on YouTube via jeneralionline tv. E-mail: [email protected]