The reforms that were backed by law amendments have led Tanzanians and their country to benefit from the natural resources, almost ending shoddy mineral businesses by establishing trade hubs in every producing region.
Through the Tanzania Mineral Dealers Association (TAMIDA), the dealers have showered praise on Dr Magufuli for measures taken, saying foreigners had benefited too much on the huge mineral richness of the country while Tanzanians continued to suffer in poverty.
In his new year address in Arusha on Saturday, TAMIDA National Chairman, Mr Sammy Mollel said the dealers are expectant that within the next five years, the sub-sector will contribute up to 10 per cent of the Gross Domestic Product (GDP).
Since coming to the helm in 2015, President Magufuli led his team to streamline the mineral sub-sector so that individual Tanzanians and the government can get their rightful share. Apart from setting up mineral trading hubs, the president ordered the army to build a perimeter wall around the tanzanite mine site in the northern part of the country.
Mr Mollel said President Magufuli has done what people thought was impossible through such measures, and the foreigners – mostly Europeans and Americans agreed that they robbed the nation of their cake unjustly, going to the extent of making refunds.
The acts by the head of the state have almost brought to an end theft, deception, selling at unrealistic prices and smuggling minerals out of the country. The actions were perpetrated by unscrupulous traders who have ever since reformed or left the business altogether.
Mr Mollel was of the opinion that such action by the president, if it was taken decades ago, would mean that Tanzania would have made great strides in terms of development. He, however, said that mineral dealers and other stakeholders should go with the pace of Dr Magufuli by working hard, believing that they will get the right reward.
“In the mineral sub-sector, there has been a strengthened management and control of the country’s natural riches. We have seen a lot that has been done with positive outcomes. We see the Mirerani perimeter wall, mineral trading hubs in every region that produces the same, and this has increased individuals’ income and that of the government through different taxes,” said Mr Mollel.
He was optimistic that in his second term, President Magufuli and his lieutenants will continue acting tough to increase efficiency in the sub-sector, saying that Tamida will work hand in hand with the president and Ministry of Minerals that has since been given the specific task, detaching it from what was the Ministry of Energy and Minerals.
In 2017, the government passed a number of sweeping changes to the Mining Act of 2010 – the legal and regulatory framework that regulates the country’s natural resources. Supporting regulations were also enacted in 2018 and later amended in 2019.
Three new laws that were enacted significantly increased government control over the mining sector in Tanzania. They are The Natural Wealth and Resources (Permanent Sovereignty) Act, 2017; The Natural Wealth and Resources (Review and Renegotiation of Unconscionable Terms) Act, 2017 and The Written Laws (Miscellaneous Amendments) Act, 2017.
They also stipulate new requirements for state participation in all mining companies, including at least a 16 per cent free-carried interest, which may be increased up to 50 per cent to match the value of historical tax benefits granted to mining companies. It also increases royalty rates – for gemstones and diamonds from five to six per cent, and for metallic minerals such as copper, gold, silver and platinum group minerals from four to six per cent.