Africa Economy FDI Governance Government Investing Mining Tanzania

Tanzania’s reelected President’s second term aims to drive economic development

It is five more years for Tanzania’s incumbent president John Pombe Magufuli after he was announced the winner of the 2020 elections on Sunday.

Just a few minutes after the clock ticked 10 PM the Tanzania National Electoral Commission (NEC) Chairman Semistocles Kaijage announced Magufuli’s reelection.

According to NEC, the president-elect racked in 12.5 million votes of the 15 million people that voted (20 million registered to vote).

With the 85 % popularity vote not only does Magufuli take the top office again but his ruling party CCM also takes a historic position after knocking down all of the opposition strongholds.

Two of the top opposition leaders Tundu Lissu and Freeman Mboye all lost their parliament seats along with another outspoken opposition leader Zitto Kabwe.

In fact CCM has taken over 194 seats (this figure maybe higher) in the 393 member parliament,

As a United Democracy, Tanzania is made up of the Mainland and the Island of Zanzibar, a day before Magufuli’s Mainland win was announced, CCM took presidency on the Island of Zanzibar after its top leader Dr. Hussein Ali Mwinyi won by 76 percent of majority votes becoming the 8th president of the Isle.

Also read: Zanzibar celebrates concluding vision 2020 with success

Tanzania’s aim to attract foreign investors
In an extraordinary move, Tanzania’ President John Magufuli has invited foreign investors to invest in the country’s extractive industries.

The move comes in the backdrop of profound speculations and misconceptions that his administration is not in favour of foreign investors, especially in the extractive industry.

Source: tradingeconomics.com

“This administration does not hate investors, it loves investors,” and with that, the president announced, “…we are open for business.”

The misconceptions were especially propagated following the expulsion of Acacia Gold from the country following allegations of extensive tax evasion and under declaration of export values. Since then, Acacia’s parent company Barrick Gold has been in long stretched talks with Tanzania. The talks finally culminated in a joint venture where Tanzania formed a private company called Twiga Minerals.

“…its why we entered in talks with Barrick,” the president told a press conference at the State House.

“…we hope they (Barrick Gold) become our ambassadors that Tanzania is the best place for investment,” he said amid applause from stakeholders.

“We want a win-win situation…so we may benefit from our resources,” explained the president.

He went on to elaborate the investment invitation saying, “I welcome companies to invest in THE extractive industry …the room is there…we want to do business…we are open for business,” he asserted.

Also read: Tanzania: Barrick sees potential for mining expansion

 

On May 26 this year, the government received US$100M (TZS 230B) from Barrick which was the first tranche of US$300M agreed as a goodwill gesture to end disputes between the two parties.

Twiga Minerals Corporation, the joint venture between the Tanzanian government and Barrick Gold Corporation, has paid a maiden interim cash dividend of US$250M in line with Barrick’s commitment to generate value for all stakeholders through the 50/50 partnership.

Since Barrick took over the former Acacia Mining’s assets in Tanzania just over a year ago, it has paid approximately US$205M to the government in taxes, royalties and dividends in addition to the first payment tranche under the two parties’ agreement to settle pre-Barrick disputes – Barrick Gold

Local content development in Tanzania
President Magufuli was also keen to urge and insist on local content in the extractive industries. The president said there is no limitations for any Tanzanian, be it a religious leader or a government official, all are welcome to invest in the extractive industries.

In the same vein, the president decried limitations and bottlenecks in the cross border trading of gold between Tanzania and the DRC. He announced that sell of gold and other minerals from the DRC in Tanzania is not only permitted but encouraged.

He went on to order the involved minister to remove all blockages at the border and to allow flow of gold from DRC to Tanzania

He cited that the country has now removed 18% VAT and 5% withholding tax from small scale miners. He pointed out that now the country has several demonstration centers in Itumbi and Buke among others along with several centers of excellence in Bukoba, Bariada and songea to mention but a few areas.

The president also insisted on the follow-up for the payment of Rehabilitation Bond to care for the environment whose fees he said are been avoided by many companies.

Original article on The Exchange

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: