Mining Rot – Can Magufuli Shake the Dust Off Ruling Party?

As Tanzanians grapple with what exactly to make of the findings of two presidential committees tasked with investigating the mineral concentrates saga, the spotlight is now on the pair of hands that are accused of signing the bad deals that have caused the Treasury shocking losses in potential revenue.

That Tanzania has had a raw deal in the mining sector is a public secret. The overly generous Mining Act of 1998 and the loose Mineral Development Agreements have been a subject of public debate that led to the formation of numerous probe committees in the past 10 years.

The Mining Policy of 2010, the subsequent Mining Act 2010 and the Tanzania Extractive Industries (Transparency and Accountability) Act, 2015 were results of the public outcry, and repeated investigations.

What has changed this time round is the manner in which the investigations were carried out and presented.

While reports of previous investigations were presented to the President in privacy, the two reports commissioned by President John Magufuli have been presented in a very public manner.

By ‘involving’ the public, President Magufuli knows what he is doing; he knows all too well the kind of battle he is waging.

After unearthing the rot in the sector, his predecessor, President Jakaya Kikwete, set out to plug the loopholes, to ensure the country does not continue getting a raw deal. The fourth phase government then came up with the Mining Act, which brought about significant changes, which, however, were to affect investments that were registered after the Act was passed. Those that entered before the law was passed were to remain unaffected.

Some of the changes in the Mining Act were to increase gold royalty from 3 per cent to 5 per cent, obliging mining firms to register at the Dar es Salaam Stock Exchange or to cede part of ownership to State Mining Company (Stamico).

President Kikwete’s approach in as far as mining investors who made their commitment before the Mining Act 2010 are concerned, was to appeal to their goodwill to re-nogiate the MDAs. President Magufuli, on the other hand, has decided to take the bull by its horns.

Yet all in all, the opposition and independent analysts say the rot in the mining sector, in energy, at the Dar es Salaam Port, has laid bare how the ruling party, CCM, has presided over the bleeding of Tanzania’s natural resources, for the benefit of a few senior government official, and much to the loss of the millions of poor Tanzanians.

Those who spoke to Political Platform after the release of the latest probe report on Monday say that the ruling party should take responsibility for the rot in mining and other sectors, and the losses the nation has suffered in decades.

But Prof Benson Bana, a senior lecturer at the University of Dar es Salaam, says it’s not just the government technocrats, and CCM big shots, who should be held responsible for the mess.

“CCM can hardly distance itself from this saga, (but) neither can civil society organisations (CSOs) and the media, who failed to sound the alarm early enough,” he says.

Abusing majority

Prof George Shumbusho, from Mzumbe University, blames CCM lawmakers for abusing their majority in Parliament to pass “dubious legislations” that have, for years now, been denying the country the full benefits of its natural resources.

The Mining Act of 1997 that President Magufuli on Monday said should be reviewed was controversially passed in an instant by Parliament under a certificate of urgency that sidelined all scrutiny.

“I support the President’s initiatives. Hopefully, many other critics, including Mr Tundu Lissu, will change their outlook after going through the second presidential report,” he said.

Prof Gaudens Mpangala of Ruaha Catholic University (Rucu), says it was CCM, which changed the country’s policy in the early 1990s, disbanding the Arusha Declaration in favour of the Zanzibar Declaration embracing capitalism, which was associated with several conditions from the Bretton Woods institutions — the World Bank (WB) and the International Monetary Fund (IMF).

“The President’s efforts should be extended to other companies as only few of them have been touched. The country’s tourism sector also need to be carefully probed,” he said.

“The country’s economic system should be reformed considering our relationship with other countries. Income generated in the mining sector and tourism should be invested in the country’s agriculture which employ majority of Tanzanians, a move which would have helped us realise the green revolution in the near future,” he added.

But, St Augustine University of Tanzania (Saut) lecturer, Prof Mwesiga Baregu, was of the opinion that President Magufuli couldn’t distance himself with the rot in the mining sector, because he served as a cabinet minister during the Benjamin Mkapa and Jakaya Kikwete administrations.

“First of all, he is supposed to tell us why he has been quiet all the time as he served the government as a cabinet minister. There are many other issues, which need to be addressed. The constitution draft proposed by the Constitution Reform Commission (CRC) had provided sustainable means of protecting our natural resources, unfortunately it was not adopted by the Constituent Assembly,” he said.

Natural Resource Governance Institute (NRGI) manager for East and Southern Africa, Mr Silas Olan’g, says for years the lack of political will has been the stumbling block in correcting the wrongs done by previous administrations in the extraction of minerals and other resources.

He said it was due to demand for transparency that the extractive industry transparency body was formed.

However, its shortcomings was reporting revenue collected by the companies and amounts paid to the government in terms of income tax, withholding tax, royalties, service charges and other levies without establishing contractual agreements made by the two sides.

“There are three reasons why contracts have never been made public. Firstly, the government officials who were entrusted with negotiating the contracts would be exposed if the contracts were made public. Secondly, officials who negotiated the contracts might have been bribed to accept keeping the contracts secret,” he said.

But, Mr Musambya Mutambala, a researcher from the Science, Technology and Innovation Policy Research Organisation said President Magufuli’s mining reports should awaken Tanzanians to be keen on protecting their own resources.

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Source: The Citizen

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