Author: DEUS NGOWI
AfricaPress-Tanzania: SWEEPING reforms that were initiated by President John Magufuli in the mineral sector have gained the country handsomely, as revenue shot to a whopping 528bn/- in 2019/2020, up from 168bn/- in 2014/15.
The record earnings in the just ended Financial Year is attributed to measures taken by Dr Magufuli to initiate new systems in managing the sector by getting rid of bad laws, introducing new ones that favour the country and its people, plus controlling production and sale of the minerals.
Some of the measures included enactment of the new Mining Law (2017) and several amendments attendant to the same, as well as establishment of 31 big mineral trading hubs and 39 small ones at district levels.
Plus, construction of the now famous 24-kilometre Mirerani Perimeter Wall that was undertaken in 2018 by Tanzania People’s Defence Force (TPDF) under instructions of the Head of State.
Contrary to what some pessimists were thinking, the new law and regulations have increased the number of local and foreign investors in the extractive industry and now Tanzanians are not only spectators, labourers or onlookers of how minerals are exported, but are major part owners of mines through Twiga Minerals Corporation.
The government, with Barick Gold Corporation, co-own the company and hence Tanzanians are co-owners of Bulyanhulu, Buzwagi and North Mara mines, with full mandate and positions in the management and board of directors, hence able to oversee decisions and activities regarding the rich natural resources of the country.
Towards the end of last year, Barick Gold issued a statement to the effect that with formation of Twiga, the Government would acquire a free carried shareholding of 16 per cent in each of the mines and would receive half of the economic benefits from taxes, royalties, clearing fees and participation in all cash distributions made by the mines and Twiga.
An annual true-up mechanism would ensure the maintenance of the 50/50 split.
The Chief Government Spokesperson, Dr Hassan Abbasi, enumerating the feats under the sector yesterday in Dar es Salaam, noted that after the new law and regulations were enacted, new mining licences that were issued rose from 3,464 to 7,132 three years on, that are being translated as a huge increase in the number of investors due to the new investment modal.
Dr Abbasi, who doubles as the Permanent Secretary in the Ministry of Information, Culture, Arts and Sports, said all the achievements are due to the visionary leadership of Dr Magufuli and his stance and taking difficult decisions that have always paid off handsomely.
“What happened after the sweeping measures and the new investment modal? Did we succeed or not?
We have gained handsomely and in the Financial Year (FY) 2019/2020 we had set a target that we in the Government were asking ourselves if we would manage to beat – a whopping 470bn/- but by June 30th we broke the record by collecting 528bn/- …numbers do not lie, the data is there openly for anyone to see,” Dr Abbasi remarked.
Beneficiaries of the feats are the miners – locals and foreigners, the Government and all Tanzanians as the revenues surge is directed to service delivery to citizens and residents in the country.
The revenue increase is more than fourfold since Dr Magufuli ascended to the top seat.
Records show that while in the FY 2014/15 collections were 168bn/-, there was a little increase in 2015/16 to 207bn/-.
In 2016/17, some 213bn/- was collected, in 2017/18, country coffers pocketed 301bn/- and in 2018/19 there was 346bn- collection before the shocking 528bn/- in the last Financial Year.
Dr Abbasi wondered why some Tanzanians were against all such measures, that included formation of the Mining Commission that has since performed its activities handsomely, with offices across the country to manage and control production and sale of the precious stones.
He termed such people as agents of darkness who would even refuse to recognize their shadows and do not like to see a better Tanzania for Tanzanians.
Other measures taken that have benefitted artisanal miners include scrapping of some taxes to the tune of 23 per cent, such as withholding tax five per cent and 18 per cent of Value Added Tax (VAT) so that the funds remain with the miners for capacity building.
Mineral trading hubs have led to selling of minerals transparently and at world market value at the respective day.
Examples of feats in the area is that before Geita Gold Market was established, the Government was collecting a mere 878m/- per annum, but after its introduction, the Government collects 2.6bn/- per year.
In Chunya, the government gets 1.2bn/- per year, up from 94m/- before the hub was constructed and became operational.
As for Tanzanite in Mirerani, Arusha, construction of the perimeter wall and deployment of soldiers around has paid off tremendously as no more minerals are exported haphazardly, and the security to miners is ensured. That is why one of the miners, Mr Saniliu Laizer, broke the world record by getting biggest Tanzanite stones weighing nine kilogrammes, five kilogrammes and another six kilogrammes this year.
The first two were purchased by the Government at 7.74bn/- in June while the other one was purchased by the same at 4.8bn/-. The Government gained its tax totaling 881m/- from the sale.
Before construction of the Mirerani concrete Perimeter Wall, the Government was getting a mere 71m/- as taxes from small miners but after the constriction and beefing up of security around the hills, it got 2.15bn/- in the just ended FY.
Before the wall, kilogrammes of minerals that we declared there stood at an average 169 per year but is now 2,272 kilogrammes, ushering in a new successful era.
