The dearth of specialised indigenous capacity to monitor sophisticated operations of multinational enterprises in Africa’s mining sector is denying host countries the opportunities to raise the people’s standards of living and industrial development, according to a senior Tanzanian government official.
“We have to learn more during this period when giant mining companies benefit more from Africa’s mineral wealth than the citizens,” said Adam Malima, Tanzania’s Deputy Minister for Energy and Minerals.
Speaking at a meeting of stakeholders in the minerals sector here late Wednesday, Malima said African countries had a long way to go in learning how to monitor mining activities run by multinational enterprises because [they] “are tactical in amassing huge profits that cannot be tracked by African governments”.
“With time, the African social fabric is increasing the demand for rights to benefit from Africa’s resources,” he added.
Meanwhile, Tanzania has rejected a proposal by the International Monetary Fund (IMF) to introduce a one-off royalty payment procedure in the mining sector, arguing that the method could adversely affect internal revenue collections.
According to a source in the Energy and Minerals ministry, quoted by the media here Thursday, the IMF raised the suggestion at a recent meeting with government officials, including the Tanzanian Revenue Authority and the Tanzanian Minerals Audit Agency (TMAA).
The government side at the talks, however, turned down the suggestion on the grounds that state revenue would be hard hit by the adoption of the single royalty payment system, The Citizen daily reported.
An analysis by TMAA, for instance, showed that it took about 10 days from the date of export for gold bullion to sell on the international market, but during the period its price changed from the amount used for royalty calculation.
“The government is aware that current royalties are low compared to what is paid in countries such as Botswana and Ghana,” a TMAA official admitted, adding that the government could consider hiking the rates and maintain its competitiveness in the region.
In addition, TMAA has indicated that the government was ready to consider another proposal by the IMF to introduce a resource rent tax, which is applied in some countries, but that type of taxation could be carried out in a few mines only.
Some speakers at the meeting conceded that Tanzania lacked the capacity to make a close follow-up of activities undertaken by giant mining companies and challenge the claim by those companies about ever-rising costs of operation.
Tanzania’s young mining industry is dominated by gold and gemstones. It was recently boosted by the discovery of uranium and, according to experts, the sector has grown rapidly since the introduction of liberal mining legislation in the late 1990s to attract investment.
The country’s gold production, geological surveys indicate, is likely to rise from 50 tonnes produced in 2009 to 63 tonnes in 2015