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Tanzania’s ’wasted’ golden opportunity

Discussion in 'Jukwaa la Siasa' started by BAK, Mar 5, 2008.

  1. BAK

    BAK JF-Expert Member

    Mar 5, 2008
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    Tanzania's 'wasted' golden opportunity

    Dar es Salaam

    A NEW report released yesterday has once again highlighted inherent problems in Tanzania's mining sector regime, where foreign-owned mines continue to post record exports while ordinary citizens wallow in poverty.

    ''Gold mining is the fastest growing sector of Tanzania's economy. Minerals now account for nearly half the country's exports and Tanzania is Africa's third largest gold producer,'' says the report aptly titled ''A Golden Opportunity? � How Tanzania is Failing to Benefit from Gold Mining.''

    It adds: ''Yet ordinary Tanzanians are not benefiting from this boom both because tax laws are overly favourable to multinational companies and because of the practices of these companies. Tanzania is being plundered of its natural resources and wealth.''

    The report is highly critical of the foreign-owned gold mines operating in the country, estimating that at a ''very conservative estimate,'' the combined loss to Tanzania over the past seven years from low royalty rates, unpaid corporation tax and tax evasion amount to a staggering $400m (approx. 480bn/-).

    ''We also estimate that the concentration of gold mining in the hands of large multinational companies at the expense of small-scale artisan miners has put 400,000 people out of work,'' says the report.

    The report was authored by Mark Curtis, an independent author, journalist and consultant and Tundu Lissu, a well-known local lawyer and activist.

    ''The losses do neither cover the financial costs or other tax incentives such as Value Added Tax (VAT) exemption, which are extremely difficult to estimate,'' states the report.

    The report was published by the Christian Council of Tanzania (CCT), National Muslims Council of Tanzania (BAWKATA) and the Tanzania Episcopal Conference Centre (TEC). It was financed by the Norwegian Church Aid and Christian Aid.

    The report portrays the mining regime in Tanzania as a sector engulfed by top secrecy and urges the government to improve transparency in the mining contracts.

    According to Curtis and Lissu, the report focused on three key issues including tax revenues from gold mining, democracy and corruption and local economic development.

    Curtis said the Tanzanian government has received a paltry $13 to $28.7m annually in all taxes and royalties from the large-scale gold mines operating in the country, but there were still other lost income streams.

    Some of the lost income streams include $61m over the past seven years by not setting the royalty rate for gold at the preferred five per cent, or $136m by not setting it even at 7.5 per cent, he explained.

    He said around $57m on unpaid corporation tax was lost based on what just two companies -- Anglo Gold Ashanti and Barrick Gold Corp. -- declared as their gross profits.

    Furthermore, he said $132.5m of tax evasion discovered by an Alex Stuart Assayers audit together with $25m unconfirmed royalty payments and $50m failed to be set aside by the mining companies for environmental rehabilitations, also amounted to lost income.

    On his part, Lissu said on community development, the Ashanti and Geita gold mines spent only 700m/- in supporting various communal services in areas surrounding the mines although they exported gold worth billions of shillings.

    The Kigoma North MP, Zitto Kabwe (CHADEMA), said the report unveiled yesterday would be a useful tool in the ongoing work of the mining review team appointed by President Jakaya Kikwete.

    Zitto is also a member of the government's mining review committee chaired by Judge Mark Bomani.

    Fredrik Glad-Gjernes, the Norwegian Church Aid country representative, criticised Canada's involvement in Tanzania's mining sector.

    ''I am ashamed of all these evils for which my country (Canada) is doing to Tanzania because it is benefiting enormously while Tanzania, rich in mining resources, was getting nothing,'' he said.

    On his part Bishop Peter Kitula, from Christian Council of Tanzania said there were severe environmental destructions caused by uncontrolled chemicals from mining activities which have been left to flow randomly.
  2. K

    Kimbembe Senior Member

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    Hii mada iko hapa tayari
    ulipaswa kusoma kabla hujaweka bandiko lako kaka
  3. BAK

    BAK JF-Expert Member

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    Gold plunder exposed

    By Polycarp Machira

    Tanzania earned less than a tenth of one per cent of the value of gold mined in the country and exported from 2001 to 2007, a new report shows.

    Gold worth $3 billion was mined and exported in the six years, but the country earned only $90 million as royalties during that period. This is equivalent to a paltry 0.03 per cent.

    The report titled A Golden Opportunity? How Tanzania is Failing to Benefit from Gold Mining, co-authored by Tundu Lissu and Mark Curtis, was unveiled in Dar es Salaam yesterday.

    Speaking at the launch of the report financed by the Norwegian Church and Christian Aid, Mr Lissu accused the Government, World Bank and other international organisations of deceiving Tanzanians that gold mining would benefit all Tanzanians.

    Mr Lissu said records showed that the Government was earning $37 million per year in revenue from small-scale miners compared with $28.7 million it received from mining companies annually.

    He added that the country may not attain the Millennium Development Goals on poverty alleviation if the Government maintained large-scale mining.

    If small-scale miners earn the Government much more than large-scale miners, why retain these people who are only here to ferry our resources to their countries? he wondered.

    The report also concludes that the country lost a total of $1.1 billion through tax incentives and poor documentation of gold production data.

    This amounts to about 10 per cent of the country's Gross Domestic Product (GDP), which by the end of last year was valued at $12 billion.

    This sum is enough to build 1,000km of tarmac roads as well as funding 30,000 university students for ten years at the cost of $2,000 per student per academic year.

    This loss is taking place in a country where currently about 89.9 per cent of the total population survives on one meal a day because of grinding poverty.

    The report has been unveiled at a time when the nation is anxiously waiting for the findings and recommendations of the special commission appointed by President Kikwete to investigate and review the mining sector. The commission is scheduled to release its report before the end of next month.

    According to the report, a total of $3 billion was taken out of the country by mining investors while $400 million was lost due to tax incentives offered to mining companies.

    A further $700 million, according to the report, was lost in dubious circumstances, mainly because of lack of key documents.

    The report shows that the country exported gold worth more than $2.5 billion in the past five years while it has received an average of only $21.7 million a year in royalties and taxes on these exports, which is less than 10 per cent of the annual total value.

    On average, the three per cent royalty earns the Government about $17.4 million a year, and raising the royalty to 5 per cent would have increased Government revenue by $ 61 million in the past seven years.

    An increase to 7.5 per cent would have increased revenue by $131 million, while an increase to 10 per cent, would have earned the country over $300 million per year.

    The report, commissioned by a reference group consisting of Christian Council of Tanzania (CCT), National Council of Muslims in Tanzania (Bakwata) and Tanzania Episcopal Conference (TEC) officials, looks at how much the country is benefiting from the mining sector.

    Co-researcher and publisher Mark Curtis said about 400,000 people were put out of work by the concentration of gold mining in the hands of large multi-national companies at the expense of small-scale artisanal miners.

    Records show that at least 10,000 jobs were created by the mining companies yet many people now opt to start small-scale mining firms, said Mr Curtis.

    He added that the sharp increase in the number of small-scale miners in recent years could be attributed to massive job losses in major mining firms.

    The report also states that the country's economy has been substantially liberalised over the past 20 years under the auspices of World Bank-supported economic reforms.

    It also reveals that Government figures show that not a single gold mining company in the country has paid the corporate tax rate of 30 per cent on profits because they have consistently declared losses.

    It says, however, that Anglo Gold Ashanti and Barrick companies� records clearly show that both companies are making profits in Tanzania that should have netted the Government at least $57 million in corporate tax.

    The launch was also attended by, among others, religious leaders who expressed their dissatisfaction at how much the Government was earning from the mining sector.

    Qrmulf Steen, secretary-general of the Christian Organisation in Norway, who represented foreign church leaders, said natural resources must not be played around with.

    He cited the case of Norway saying, When we wanted to develop, the first thing was to control the natural resources.

    Mwanza-based Muslim cleric Sheikh Hashim Fereji said mines were a blessing from God that were supposed to be used wisely for the benefit of all Tanzanians.

    Kigoma North MP Zitto Kabwe, who also attended the launch, praised the report, saying it has shown exactly what was happening in the mining sector, adding that he would incorporate the recommendations in the mining review committee�s report to be released later this month.

    Mr Ami Mpungwe, chairman of the Tanzania Chamber of Minerals and Energy, said he could not comment on the report because he had just arrived from a trip outside Dar es Salaam.

    The chamber's executive secretary, Mr Emmanuel Jengo, also declined to comment, saying he had to see the report first.

    The report recommends that the Government should reorganise the role of the industrial sector and seek to transform the country by improving policies in the mining sector.

    It further urges the Government to engage donors such as Britain and the World Bank in encouraging monitoring by civil society organisations in Tanzania and internationally.

    According to the recommendations, there was a need to produce a strategy document outlining how the Government intends to harness mining revenues for national development.

    It also calls for parliamentary scrutiny of mining contracts which should also be made public.

    According to the National Economic Survey Report released in 2006, the growth rate of the mining and quarrying sector increased from 15.4 per cent in 2004 to 15.7 per cent in 2005, with the increment attributed to new investment in Tulawaka Gold Mines in Biharamulo District.

    The report further states that the contribution of the sector to Gross Domestic Product, which is the total value of goods and services produced in a country during in a year, increased from 3.2 per cent in 2004 to 3.5 per cent in 2005.
  4. BAK

    BAK JF-Expert Member

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    Imetumwa na nani ni imepewa kichwa cha habari kipi? Nasubiri majibu.
  5. BAK

    BAK JF-Expert Member

    Mar 6, 2008
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    Thamani ya dhahabu iliyochimbwa tangu 2001 mpaka 2007 ni $3 billioni, thamani ya pesa ambazo Tanzania imepata kama mrahaba kutokana na dhahabu hiyo iliyochimbwa kwa miaka sita ni $90 millioni! Wacha waendelee kuificha mikataba ya uchimbaji wa dhahabu. Kweli Tanzania ni kichwa cha mwendawazimu.

    Wageni wanatajirika kwa rasilimali zetu sisi tunaendelea kutoona mafanikio yeyote kutokana na rasilimali hizo.