16 June 2017

Tanzania: JPM Sends Message to Investors

Photo: The Citizen
President John Magufuli speaks at State House in Dar es Salaam after he received the second Presidential Committee report on the mineral concentrates saga.

A day after Barrick Gold Corporation Executive Chairman Prof John Thornton held talks with President John Magufuli on how to deal with the loss of revenue from export of mineral concentrates, observers say the president has sent a clear and strong message to the outside world that Tanzania needs only investors with integrity and those it can trust.

A lecturer in Political Science and Public Administration at the University of Dar es Salaam, Dr Benson Bana, made this observation, saying the new developments now unfolding at State House would awaken other governments in East and across Africa on the need to weigh the conduct of foreign investors.

"What President Magufuli did will now compel other governments to 'open their eyes' all the time ... this concept will truly be enforced, especially by our own government," Dr Bana said.

According to Dr Bana, if there were any more investors out there who may still think of 'cheating' in their revenue declarations ... they must begin to put their houses in order or get ready to face measures.

The "As a nation we need investments, including foreign direct investments ... but we don't need investors who don't comply with the laws of the land," Dr Bana said, adding that such investors should ensure 'justice is done' to all parties involved in the contracts.

He said the government should listen to public complaints, including concerns aired in Parliament as well as from lawyers ... complaining about the exploitative nature in some contracts signed more than a decade ago.

The senior don also observed that the measures instituted by the president would ultimately reflect positively on the country's economic diplomacy ... the outside world will understand that integrity, a measure of trust, ethical behaviour and transparence were integral to this country's governance.

Another academic, Dr Hilderbrand Shayo, an expert in economics, said willingness to sit on the negotiation table expressed by both sides, the government and Barrick Gold Corporation, sends a signal to the outside world that Tanzania was ready to invite any investor based on a win-win situation.

"It reflects confidence on investors currently operating in the country and sends a clear message to prospective ones that Tanzania is a good place to put their money ... provided the laws are followed," Dr Shayo said.

According to Dr Shayo, the initial agreement reached between Barrick Gold Corporation and President Magufuli would also confer a measure of confidence to global lending institutions.

Dr Elinawi Minja, also an economist from the University of Dar es Salaam, said the approach taken by both sides was a reflection of interdependency of the two parties.

According to Dr Minja, multinational firms should feel compelled to amicably and diplomatically settle differences that arise in the course of operations for fear of tarnishing their image.

Prof Delphine Rwegasira, another expert in economics from the University of Dar es Salaam, said President Magufuli had sent a message that Tanzania is serious country when it comes to investment issues.

"It is good for investors to learn that Tanzanians are serious people with serious leadership," he said, adding: "If we were not that wise ... . we could have, perhaps, taken legal action ... but we didn't; instead, we've wel comed them to the negotiation table ... in a friendly way."

According to Prof Rwegasira, any wise government would always strive to attract investments and whenever problems or challenges surfaced the best way would be to sit down and resolve them for the benefit of all parties.

Prof Honest Ngowi from Mzumbe University said investors should draw a lesson that Tanzania was ready to invite investors ... only if they also agreed to follow rules and regulations.

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