- Published on Sunday, 09 September 2012 00:45
- Written by ashery mkama
- Hits: 1203
ACCORDING to my computer dictionary, the word invest has many meanings but the one I like best is to furnish or endow with a power or right.
There is also the other meaning, to clothe or investire in Latin. We would therefore expect investors to empower the resident or recipient as a necessary part of the investment. Some invest in ladies and end up with more mistresses and wives. You see, even some heads of some states have been doing the locomotion. For many ordinary husbands, one wife is already a handful. How do some men manage with several wives?
For some, being single is having one too few and they do maths and go plural. My favourite polygamist is Ziona Chana who has 39 wives, 91 children and 33 grandchildren. The whole family lives in a mansion with 100 rooms in the Indian state of Mizoram. That is a huge investment I tell you. I would love to know who holds the plural marriage record in Tanzania.
Some Tanzanians are doing a different kind of investment which I will call hoarding. Take the case of some entrepreneurs who pay for 10 hunting plots in some game reserve. But instead of operating the plots by bringing in hunters and earning themselves and the nation a tidy sum, they rent the plots to those who missed out in the allocation of hunting plots.
Others buy several building plots in cities or 100s of acres of land in Mkuranga or Bwagamoyo. For several years they do not add a single brick to any of their plots or plant any crop that is sellable in the market. They just keep paying land rent and no property taxes. There is no property to tax. They wait for the land to appreciate in value and then sell to the highest bidder. The mining sector is a mixed grill a la Goldenberg.
Mercenary investors with little experience in mining invade a location suspected of harbouring gold or other valuable minerals, lay bare tracts of virgin forest and pollute local rivers all in the quest for quick riches. Do small miners in Tanzania pay the government any royalties? How much tax has government collected from such miners in the last decade? How beneficial are small miners to the Tanzanian economy?
Is it worth the environmental damage and occasional deaths? Even established mining sites like Mererani have little to show for the years of work, save for rudimentary shelters and lifestyle diseases. Large investors are mining for Tanzanite, gold, cobalt, gas and diamonds, just to name a few. I said in past articles that Tanzania should demand 25% of earnings as royalty instead of the current 3-4%.
Why? Because Tanzania is the owner of the land and the minerals while investors, local or foreign bring in technology, expertise and financial capital. Are we at ease with foreign investors selling us our own gas at world market prices while many ordinary city dwellers are stuck with charcoal and firewood as primary sources of energy? Charcoal and firewood are expensive nowadays and a sure disaster for the environment.
We do not even have an accurate estimate of how much gold, tanzanite or diamonds are forever being shipped out of Tanzania. Did we not fire the mineral assayers that were employed by the ministry of money? Now we are up the mud creek without the proverbial paddle. A report by EITI, the extractive industries transparency initiative, shows that Tanzania received about 22.1 billion shillings from gold, gas, diamond and tanzanite mining companies as royalties in 2008/9 period.
However, data from the mining companies showed they paid about 44.5 billion shillings. Where did the 22.4 billion shillings go? Maybe these billions were lost in transaction accounting called accrual versus cash basis. I mean half of the royalties are missing somewhere in lost-and-not-found section of government and yet nobody may have been sacked. Anyway, that is material for another day.
Suffice it to say 44.5 billion shillings (or US $28 million at current exchange rates) is still just 3% of the declared 2008/9 earnings. It means the companies earned at least US $ 900 million. Gold, diamond, gas and tanzanite mine managers should hold press conferences to tell the world the truth about how much minerals they have harvested from our land, how much they sold it for and how much earnings they returned to Tanzania.
I can bet they do not even bank their proceeds locally. Mining investors must plough back a sizable portion of their earnings into the country which owns the land. Building a health clinic or constructing a road to the nearby village is giving the people bread crumbs when what they deserve is a piece of the lunch pie. Those minerals do not belong to a few people or companies but to all Tanzanians. Small miners should provide accounts of their earning and should also be required to pay royalties to the people through government.
What is good for large foreign investors should also be the rule for small miners. Politicians from the so-called official opposition party have for some time criticised government officials on live coals for not standing up to investors and getting the best deal for the people of Tanzania. Now they can put their money where their mouths are by tabling legislation in parliament that will legally increase government shares in mining ventures.
They should say enough with foreign or local investors taking gold bars by the cartons from our land while Tanzanians are left with what amounts to flecks of gold dust. Already there are precedents elsewhere on planet Earth for such legislation. For example, in Ecuador and Russia, governments have obtained significant share of mining ventures without investing a penny in the actual exploration or mining. Tanzania can take a leaf from Russia book of mining.
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