How Tanzania’s gold sand exports failed nation

...And, it has remained clear that the mining sector has been bleeding the country and plunging it into poverty while at the same time reducing it to a perennial beggar. Going by the committee’s findings, the country could have long transformed into middle economy.

How Tanzania’s gold sand exports failed nation

...And, it has remained clear that the mining sector has been bleeding the country and plunging it into poverty while at the same time reducing it to a perennial beggar. Going by the committee’s findings, the country could have long transformed into middle economy.

28 May 2017 Sunday 12:14
How Tanzania’s gold sand exports failed nation

THE mineral sand report that was presented to Tanzanian President Magufuli, last Wednesday, has painted a scenario of Tanzanians dying of thirst while their legs are submerged in water.

Poverty, diseases, shortage of medical drugs, schools and desks, stunted development and overreliance on donors just but to mention a few, have reduced the country to a sorry state, while massive thievery, plundering and corruption is the order of the day.

And, it has remained clear that the mining sector has been bleeding the country and plunging it into poverty while at the same time reducing it to a perennial beggar. Going by the committee’s findings, the country could have long transformed into middle economy.

An Analysis by 'The Sunday News' shows that royalties calculated from 277 containers basing on the probe team’s highest estimations could have helped to construct thousands of dispensaries, schools, laboratories, roads and many other essential infrastructures.

This is all but evidence that tax evasion and corruption have been hitting hard the country for some decades now. The report’s revelation of the sickening thievery and loss the country has been suffering due to dishonest mining firms and crooked government leaders is just but a tip of an iceberg.

According to the report findings, it is possible that the mining firms and some government officials have been stealing from the government by keeping wrong records. According to the report, mining companies have been conducting undeclared exports of minerals, which lead to possible tax evasion.

According to the data released by the probe team, if the mining firms had been paying all taxes as required, the government could have been able to implement various development projects from its accounts, instead of begging and asking for loans from various international financial institutions.

And, though these findings are just for the 277 containers that are detained at the Dar es Salaam Port and other ICDs, while there is no proper scan for the containers at the Dar es Salaam Port, then one is left to wonder what else has been smuggled out of the country in the name of mineral sand

.The probe team’s findings indicate that in a 20-tonne container of mineral concentrates, there was between 28 and 47.5kgs of gold.

This was contrary to mining firms’ reports, which indicated the availability of only 3kg of gold in the same container. The team also revealed that from the same container, there was between 6 and 7kgs of silver.

Mining firms said there was only 3kgs of silver. Moreover, the probe team revealed that the container had between 5.2 and 6.75 tonnes of copper while presented reports indicate that there was only 3 tonnes of copper. According to the team, the total value of the seized 277 container was between 829.4bn/- and 1.439 trl/-.

At the same juncture, mining firms show that the total value of the containers at the port was 85.87bn/-. The 2010 Mining Act increased the rate of royalties paid on minerals such as gold from 3 per cent to 4 per cent and required the government to own a stake in strategic mining projects.

The companies are also required pay to 30 per cent of corporate tax, which is levied on the companies’ income. With the probe report’s findings, mineral concentrates in all containers are worth between 829.4bn/- and 1.438 trl/-. The amount would have led to the payment of royalties of between 33.17 and 57.55bn/- .

President John Magufuli told the public on Wednesday that people have been stealing from the government. He said Tanzania is supposed to be a donor country, but because of extensive theft, the government has continued to seek support from abroad to execute various development projects. From the probe team findings, the Sunday News realised that with 57.55bn/-, which was supposed to be paid by the mining sector as royalties to the government, a lot of development projects could have been executed.

The amount could purchase at least 1,151,000 desks each at an average price of 50,000/-. The amount could also construct a total of 1,440 laboratories each at an average of 40m/-. In 2015, Dar es Salaam Regional Commissioner’s office used 10.9bn/- to construct a total of 281 laboratories in the region.

The region has 412 laboratories for 135 schools, almost all schools have three laboratories. In July 2015, the government constructed 264 schools at a cost of 56.3bn/-.

Thus each school was built at an average of 213.3m/-. With 57.55bn/- from mineral sand, the government could have been able to build a total of 270 schools across the country, each at 213.3m/- In January, this year, President Magufuli visited Simiyu and ordered the construction of Simiyu Regional Hospital at a cost of 10bn/- instead of 46bn/-.

This means 57.55bn/- from the mineral sand could have been spent on the construction of other five hospitals with regional and referral status in the country.

President Magufuli said on Wednesday that averages of 3,000 containers with mineral sand were being exported every year.

The mining companies started exporting mineral sands since 1998. In March, this year, Acacia said it was losing an estimated 2.2bn/- (1 million US dollars) a day because of the indefinite ban imposed by the government on exports.

This means annually, the company earns around 800bn/- (360m US dollars) from the trade. Commenting on the matter, political scientists and economists said some top officials who were entrusted have been failing the nation for the reasons best known to them.

University of Dodoma lecturer, Paul Loisulie said: “We made the mistake from the time we drafted and signed bogus contracts with mining firms; our laws give too much power to investors.

We get less profit from this business, our minerals are building cities in other continents.” He said the government needs to review the Mining Act and make sure it serves the interests of majority Tanzanians. He urged MPs to wear a patriotic spirit whenever they discuss and pass bills that carry interests of the public.

“I would like to ask MPs to avoid politicising serious issues, we need to be serious and stand firm when we discuss matters of public interests,” said the don. University of Dar es Salaam lecturer, Zacharia Malima said the Head of State has done a commendable job to reveal the rot in the house.

He said it is high time the government purchases the smelter so that there could be no need for any mining company to export mineral concentrates.

“According to the probe report, it is obvious these people have been stealing from us for so long, they must be taken to task to pay all evaded tax since 1998,” he said.

Dailynews

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