Elected in October 2015, Magufuli has dismissed several senior officials, including the head of the government's anti-graft body, the tax chief, a senior rail official and hea of the port authority as part of a wider anti-corruption drive.
Businesses have long complained that corruption and government inefficiency were major obstacles to investing in Tanzania.
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The crackdown on fake degree holders comes after another purge launched in March last year discovered more than 19,700 "ghost workers" on the East African nation's public sector payroll.
"We have been working hard to create new jobs while there are people in government who hold fake degrees," Magufuli said after receiving a report on academic fraud in the civil service.
The government had also been losing $107 million each year to "ghost workers" who had now been removed from the public payroll, he said.
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Tanzania spends more than $260 million per month to pay civil servants' salaries. The government believes the public wage bill is bloated, with more than 550,000 civil servants at national and local levels.
Magufuli ordered officials to "name and shame" wrongdoers by publishing a list of all civil servants with forged academic qualifications.
"These people occupied government positions but had no qualifications ... they robbed us just like other common criminals," he said.
Magufuli said the audit had also found that the academic records of more than 1,500 civil servants were used by multiple people, while over 11,500 government employees had incomplete academic records.
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