21 October 2017

Tanzania: Economists Hail Govt Over 'Beneficial Mining Pact'

Photo: Daily News
Tanzanite.

ECONOMISTS and analysts have commended the government for entering a beneficial mining deal with Barrick, expressing satisfaction on the competence of Tanzania's negotiating team.

In separate interviews yesterday, economists and political scientists said the time has come for Tanzanians to begin enjoying from the mining sector. University of Dar es Salaam's (UDSM) Department of Political Science lecturer Professor Benson Bana said the victory was for all Tanzanians as without wisdom the agreement would have not been reached.

"It's a new page in Tanzania's mining industry and our relationship with international mining companies," he noted. On transfer of the offices, Prof Bana said people should not take it lightly as it will simplify communication and some decisions will be made quickly.

He said while others will not support the agreement but it was of greater importance to the nation. The Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) Kilimanjaro Region has hailed the negotiating team for reaching a resolution with Barick Gold to share profits accrued from the mine on a 50 50 ratio and grant the State a 16 per cent stake in its gold mines.

TCCIA Kilimanjaro Chief Executive Officer (CEO), Mr Boniface Mariki said that after a three-month negotiation, what has been achieved is huge, saying for the foreign company to agree to all proposals by the government parades exceptional negotiation skills among Tanzanians.

Mr Mariki said it is a blessing that President John Magufuli is the first one to come with the idea, seeking an end to foreigners making too much from natural resources bestowed upon Tanzania that should first and foremost benefit Tanzanians.

"To me, it is really a huge achievement because getting the funds they have decided to issue in good faith is really huge thing as well as agreeing to share profits by half. "I would say something is better than nothing and we have been able to negotiate and strike the deal, we are happy but the problem may be proved during implementation," said Mr Mariki.

Mzumbe University Professor Honest Ngowi said the resolution was a step ahead if at the end of the day the payment is done and that should be taken to be good news for now.

He said that much as the negotiating team managed to strike a deal to have a '50-50' share in the profit, while the Tanzania government would be owning 16 per cent of shares is a good move and a 'win' to Tanzanians, it is a strange negotiations so much that economics books might have to be rewritten.

He said on the implementation part, it could be challenging as many extractive issues are shrouded in secrecy, there are operational costs, transfer pricing and other things to be added before a profit is declared.

Emmanuel Rweyikiza, an economist based in Mwanza said that in the perspective of financial issue one can see the proceeds were normal but in the perspective of economy Tanzania has reaped hugely.

"Tanzania is the first country to get a 16 per cent among 18 countries dealing with mining operations, most of them range between 10 to 15 of shares," said Mr Rweyikiza.

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