18 June 2017

Tanzania: When Digging Up Graves Is the Only Option

Photo: Daily News
Acacia Mining CEO, Brad Gordon.

When the much anticipated report from the second team he had formed to assess the legal and economic impacts of his decision to stop containers containing mineral concentrates to be taken out of the country was presented to him at Magogoni, predictably President Magufuli's mood alternated from being angry to being sad, and outright bewildered.

He frequently returned to themes which have become common every time he speaks. Those of fighting an economic war to save this country from continued plunder; that everything he is doing as a president is about the common man and woman all over the country. His uncompromising stance once he has made up his mind.

He spoke like a person who understood and shared their pain.

Reconnecting his presidency and the common folks around the country.

He had once promised not to dig up graves but in this country, when you touch energy and mineral sectors then you are digging up a lot of graves, and they are big. Economic liberalisation of the 1990s under the banner of economic diplomacy was criticized very much by those who argued that we were practically giving away our natural resources. The powers that be of the time went to great lengths to defend their dealings and the economic benefits the country would reap from its mining sector. Contracts closed under secrecy continue to milk this country dry. In rare occasions in the past, the government reluctantly agreed that there were blunders in the contracts but claimed that these could be seen clearly today because of the benefit of the hindsight even though the process of opening up our economy was criticized right from the outset. Opponents of mining contracts were surely vindicated.

Those who had watched him on television saw how he, and Prime Minister Kassim Majaliwa, sharply turned their faces and were stunned as Prof Nehemiah Osoro read the part in their report which said Acacia had no licences to operate in the country. He wondered, like most of those who were watching and listening, how a company without licence had operated in the country for so long.

President Magufuli accepted all the report's recommendations, signalling the beginning of long legal battles ahead as he said all those who were mentioned should be held responsible for whatever roles they played. There are some big names in domestic politics then and today who were deeply involved in the controversial contracts over time which led us to the many legal quagmires we find ourselves stuck in today.

These names have been whispered over the years and some of those who have been mentioned have denied responsibility every time their names popped up in the media.

He directed the minister for justice and constitutional affairs, Prof Palamagamba Kabudi to review all relevant laws to the mining sector. This was the right call to make because all that the government has been doing so far was dealing with the outcomes and not the root cause of our current problems in the mining sector. Leaving the current laws intact would lead us to the same situation in a near future. The sector has consistently underperformed and failed to meet expectations when it comes to its share of contribution in our national budgets year in year out.

With such a background it is not surprising that among the top contributors to the taxman, mining firms are poorly represented and in some years are outperformed by breweries companies which save just a few regions in the country. This too is one of the reasons every financial year the taxman is sure to raise taxes and collect them from breweries companies. And no complaints there.

He offered an olive branch of some sort to Acacia. He is willing to talk but only after everything his government is said is owed by the firm has been fully paid back.

His unapologetic approach to how he is handling this matter shows that he would rather break than bend as he criticized those who point fingers at him for what they see as plunging the country into dangerous economic waters.

One thing is for sure: he enjoys huge support over this matter from the common folk who for many years have said the things they heard their president saying and connected their increasing financial poverty and them being dispossessed of their natural resources.

President Magufuli has calculated that the price of the status quo is far higher than what the country would pay by trying to find a way out of very controversial contracts. He has framed the battle as one that is of economic emancipation. The irony here being that those who drove us into the current mess offered the same argument.

No doubt more heads will roll.

We are in for a long fight.

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