The Costs and Casualties of Magufuli’s Mineral War

The Costs and Casualties of Magufuli’s Mineral War

“This economic warfare requires enough sacrifice” – President John Magufuli

President Magufuli has declared that Tanzania is in economic warfare. This is a protracted struggle to protect our natural resources from plunder. Minerals are at the heart of this battle.

Of course, we have not yet experienced a ‘mineral war’ like the one in the neighboring Democratic Republic of Congo (DRC). However, what Thabit Jacob aptly refers to as the “securitization” of our extractive sector is increasingly at play. It is an indication of the erosion of trust.

After years of luring – and being courted by – investors and our development partners, the investment honeymoon is over. One only needs to read the ninth recommendation of the second presidential committee on copper concentrates earmarked for export to grasp this. “The government”, it recommends, “is to start guarding mining areas and their airstrips to prevent companies from engaging in acts of economic sabotage such as smuggling minerals.”

By accepting this recommendation wholeheartedly, the Commander-in-Chief is ordering the security forces to take their position. In fact, this is what he said when he received a report from the first presidential committee on the same matter: “Regarding all activities involving minerals in this country, as of today, all our intelligence and security organs must be deployed effectively.”

It is thus a presidential admission or acknowledgement that, as far as the mining sector is concerned, the state had been captured. What caused the institutions that we have been attempting to create failed to capture such illicit outflows? How could this happen when the country was attempting to comply to the demands of the Extractive Industry Transparency Initiative (EITI)?

EITI, as John Jingu noted in his PhD dissertation on ‘State Capture in Tanzania: The Case of the Mining Sector’ in 2013, “is premised on an assumption that transition countries such as Tanzania face a problem of the misappropriation of revenue collected from natural resources by corrupt government officials.” Clare Short, who is renowned for objecting to BAE’s controversial military air traffic control deal with Tanzania, chaired EITI from 2011 to 2016.

Her letter to the then chair of the Tanzania Extractive Industries Transparency Initiative (TEITI), Judge Mark Bomani, dated 18 December 2015 underscore both the utility and futility of relying on this initiative. “I am writing to congratulate you on the publication of Tanzania’s 2012/13 and 2013/14 EITI Reports on 27 November”, she notes, “and to confirm that the EITI Board has lifted the suspension of Tanzania from the EITI with immediate effect.” This suspension, Clare Short further notes, “was imposed on 2 September 2015 because Tanzania did not meet the 30 June 2015 deadline for publication of the 2012/13 EITI Report.”

First, there is no way one can know, by simply reading those EITI reports, whether the export-bound shipping containers, such as the Acacia ones that the President grounded at the Dar es Salaam port, contains under-declared minerals. Second, the fact that we need the likes of Clare Short from Britain to remind us to implement the Tanzania Extractive Industries (Transparency and Accountability) Act No. 23 of 2015 indicates that we hardly have a sense of its ownership.

TEITI, as the second edition of ‘The One Billion Dollar Question Revisited: How Much is Tanzania Now Losing in Potential Tax Revenues’ notes, is important in contributing to increasing transparency.” However, this edition further notes, it “lacks teeth, rarely going beyond identifying financial discrepancies to achieve real accountability and policy change.” For instance, in its maiden report dated 8 February 2011, TEITI showed the following unresolved differences between what African Barrick Gold (ABG), i.e. the current Acacia Mining Plc, reported vis-à-vis the government: US$740,000 in North Mara Gold Mine Ltd; US$2,115,000 in Bulyanhulu Gold Mine Ltd; US$ 10,143,000 in Pangea Minerals Ltd. In all these cases the Tanzanian government reported more than what the mining companies reported.

Subsequent TEITI reports also indicate that we have been on the losing end. For instance, the sixth TEITI report issued in November 2015 made this observation: “Bulyanhulu Gold Mine Limited, Pangea Minerals Limited, North Mara Gold Mine Limited, Shanta Mining Company Limited and Tanzanite One Mining Limited, all companies with [Mineral Development Agreements] MDA’s are not paying corporation taxes as they are still in loss making position. Corporate tax is based on company profits earned and since these companies are not making taxable profits, corporate tax does not arise.” However, there were no significant interventions from responsible entities to reverse this.

John Jingu’s powerful critique of EITI is particularly illuminating in this regard. About 60 Multinational Mining Companies (MTNCs) and “their home states”, he argues, generally control and direct the EITI process. “As rational actors”, he further asserts, these “drivers of EITI seek to safeguard their interests, and thus it is doubtful whether the interests of a country such as Tanzania can meaningfully benefit from the initiative when even its ability to develop independently policies geared towards serving national interest end up being donor-driven.”

Unfortunately, under the pretext of the otherwise commendable economic warfare, we are narrowing the democratic space that enables us to mobilize against the plunder of our minerals. The tug of war of words between President Magufuli and leading mining rights political activists, Tundu Lissu and Zitto Kabwe, is – as Thabit Jacob puts it – “counterproductive.” What matters is not he who gets all the credits but those who reclaim their mineral rights.

Moreover, the seemingly fusion between the supposedly separate powers of the government i.e. the legislative, executive, and judiciary is worrying. This is particularly troubling when the Speaker of the National Assembly appears, publicly, as receiving plaudits and directives from the President on how to deal with the loud and maverick parliamentarians from the opposition parties.

Even in the well-intentioned case of making the Parliament amends our unpatriotic mineral laws, the onus is not on the President to request or consult the Speaker publicly. What it required is for the Executive Arm to draft a Bill to amend the laws and let the Legislature Arm do its job. Since the President is also the chair of the ruling party i.e. with the majority of parliamentary seats, there is a ‘political license’ to caucus to make such a Bill pass. In any case, this is what MPs from the opposition camp have been calling for, that is, an Act that requires them to scrutinize mining contracts.

Finally, the muted voices that are calling for extending the presidential tenure to more than ten year is also troubling. Surely the clarion call to support the President’s economic warfare is so exhilarating. It is reminiscence of the popular excitement of 1967 when Mwalimu Julius Nyerere issued the Arusha Declaration. But this 2017, so, let us be as critical and cautious enough to know that the (slick) road to dictatorship could be paved with good (populist) intentions. May we let our President live up to this promise of his:

“I am not a permanent President… it is true this task is very difficult…but if God has given me this job, I have to do it and that is why I request your solidarity; we have been played along a lot… enough is supposed to be enough…my tenure will end, I wish it could even be this year so I can pass the baton to others ….”

We should win the battle on resource nationalism but not lose the war of democratizing development.

Chambi Chachage
Chambi Chachage
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