By
Special Correspondent, Nairobi
2019-03-18: TANZANIA’s
mineral reforms under President John Magufuli have entrenched deep in history
by launching the first East Africa’s Gold Exchange Centre, the third on the
continent.
The
international gold exchange market in Geita region will increase gold revenues in
a country that has been losing its rightful stake of the resource, is also
intended to curb gold smuggling.
This
is another milestone to problem solving leadership of President John Magufuli
who want to ensure that Tanzania benefits from its vast mineral wealth.
The
President himself convened a meeting on 22 January this year, the meeting that
brought together both government officials and the private sector, where Dr.
Magufuli sought answers on why
Tanzania is yet to see real benefits of its vast
mineral wealth.
“I
would like to listen to you mining stakeholders and kindly speak openly,”
President Magufuli told the stakeholders on that historic meeting held at State
House in Dar es Salaam.
As
a result, on Sunday Tanzania joins South Africa and Botswana, which boast gold
exchange hubs and diamond bullion market in Africa. The continent now has three
hubs.
Credited
as a no none-sense transformative leader, President Magufuli sought answers to
one important question, "Why aren’t we profiting from our gold as we should."
The results tell it all.
Tanzanite Earnings Appreciated
In
one of the moves in 2017, the President constructed a 24km perimeter wall
surrounding the tanzanite mines in Mererani, Manyara Region, to curb smuggling
of the rare gemstone.
The
government installed surveillance cameras round the tanzanite mines. The
measures taken by Dr. Magufuli paid off. The country recorded increased
revenues from production and sales of tanzanite.
As
of September 2018, tanzanite revenues rose to Tsh1.28 billion ($461,000), from just
Tsh166 million ($74,000) recorded in January 2015. Due to the initial and on-going
measures, revenues from gold reverses have also skyrocketed. Revenue in Geita
region alone increased from the target of TZS 85 billion to TZS 91.75 Billion
actual income by mid of the 2018/19 budget year.
Speaking
in Geita at the launching ceremony, Tanzania’s Prime Minister Kassim Majaliwa
urged regional authorities in all mineral producing areas to ensure they
constructed exchange centers by the end of June 2019.
The
Premier noted that the government has scrapped a number of levies and taxes
including the Value Added Tax (VAT) from 18 percent to zero percent, and
withholding tax from five percent to zero percent.
“It
is our hope that scrapping of these taxes and construction of this exchange
market will address smuggling of gold since miners will be rest assured of
reliable market for their products,” he said.
The
gold exchange market, the first of its kind in East Africa, is expected to
attract both local and foreign gold dealers, while providing the government
with correct statistics on produced gold and earnings. The gold hub is meant to
ease mineral trading, ensuring that businesses pay the required levies to the
government.
Tanzania
is the fourth largest producer of God in Africa and Geita alone region produces
over 40 per cent of all gold export. Other gold producing regions in Tanzania
are Mara, Mwanza, Shinyanga and Mbeya.
The
centre stands to testify to the world of successes of President Magufuli’s
mineral reforms which he introduced in the past three years. Geita Regional
Commissioner, Engineer Robert Gabriel, said the facility was built on local resources.
“We are highly optimistic that it will be a game changer in the region and
beyond,” he said.
Tanzania
Mining Act
Recently,
the Magufuli Administration reviewed the Mining Act to allow the Mining
Commission to establish mineral buying and selling centers. Under the new law,
contractors, sub-contractors and financial institutions with at least 20 per
cent equity owned can participate in mining activities.
Tanzania
mineral wealth includes gold, tin, nickel, iron, copper, zinc, lead, diamonds
and uranium. The gemstone includes tanzanite, coal and industrial minerals such
as soda, kaolin, gypsum, phosphate and dimension stones.
The
country attracts investors in a win-win situation to invest in the sector.
Various multi-billion corporates are already in the country including the giant
Barrick Gold.
ends
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