ANALYSIS
President John Magufuli yesterday appointed a new Central Bank governor in style, breaking a norm of choosing an economist; instead, he has opted for taxation law Professor Florens Luoga.
His appointment to replace Prof Benno Ndulu was a surprise — emerging in the course of another event to reward the members of the three committees he formed to investigate the mining sector.
His unexpected naming of Prof Luoga as successor to Prof Ndulu is a move which made the participants in the event at the State House burst into cheers.
Expressing why he ditched appointing an economist, President Magufuli said being a professor in taxation, Luoga would help in strengthening checks on capital flight by some foreign firms that use tax havens. “… taxation law is very crucial … it’s one area where we have been highly deceived,” Dr Magufuli said.
Shortly after his appointment, Prof Luoga told the journalists that he would first have to learn how to cope with his new brief, admitting he was not familiar with central bank activities.
Thanking the head of state for his appointment, Prof Luoga pledged that he would ensure that he brought his law taxation experience to bear on the Bank of Tanzania operations. “The challenge here is to make every person perform effectively,” he said.
Luoga currently serves as deputy vice-chancellor of the University of Dar es Salaam, the country’s premiere public university. In July, he was also appointed chairman of the board of directors of the Tanzania Revenue Authority (TRA). Prof Ndulu’s tenure as the sixth BoT governor is about to end in line with the requirements of the Bank of Tanzania Act, 2006. Prof Luoga will take office as the seventh governor of Central Bank since 1966. Section 8 (1) of the Act gives powers to the president to appoint the governor of Central Bank.
It reads, in part: “There shall be appointed by the President a Governor who shall, unless he dies or resigns or vacates or is removed from his office for good cause or is disqualified, hold office for a period of five years and shall be eligible for a re- appointment.”
Two days ago, President Magufuli hinted on Prof Luoga’s appointment after handing certificates of appreciation to various officials who participated in investigating and preparing reports on mineral sands. The Head of State also handed certificates to a team of experts that was officially formed to engage in negotiations with Barrick Gold.
The team was headed by the Minister for Justice and Constitutional Affairs, Professor Palamagamba Kabudi. President Magufuli said all experts who participated in the process did a good job and that the nation was proud of them.
“From these people, I have appointed one to head the Central Bank… Should I mention him now… he is Prof Luoga,” said President Magufuli. Economic and political analysts who spoke to The ‘Daily News’ described Prof Luoga as the “right person” to head the BoT.
University of Dar es Salaam Senior Lecturer Prof Haji Semboja also described Prof Luoga as a person “fit for the position” since he had a wide knowledge on taxation, procurement and commercial laws.
According to Prof Semboja, the Head of State had appointed Prof Luoga on account of his ability and patriotic spirit in serving the nation. “I am very confident that Prof Luoga fits to that position especially at this time when the fifth government is striving to make changes in various areas,” he noted.
He added: “Prof Luoga is smart and talented in analysing issues, he is an expert and keen on both economic and legal matters, I believe, he is going to do a good job,” Mzumbe University Senior Lecturer, Prof Honest Ngowi said traditionally most of BoT’s governors were economists or had economic related backgrounds.
He said the new appointed governor will need a strong economists team to support him since he is not an economist. “I believe Prof Luoga will deliver, but he needs a supporting team of economists to advise him,” he said.
According to Prof Ngowi, a Central Bank governor needs to understand various issues related to country’s economic stability, reaction of economic variables and many other of such nature. Dr Hildebrand Shayo, a banker and senior economist said President Magufuli had appointed Prof Luoga for good reasons.
He said many Tanzanians expected the Head of State to appoint an economist or someone from the circles of the World Bank. He added that the president had proved to the world that he appoints officials based on ability to perform.