First Tanzania EITI Report; What it Tells Us, What it Doesn't?

The first Tanzania EITI reconciliation report is out since 8 February 2011. It is first time Tanzanians get this golden opportunity; peeping inside story of erstwhile Government- extractive industries companies exclusive top secret. Opacity in extractive industries dealings in Tanzania is legal, backed up by existing policies and legislations, while confirmed by Mining Development Agreements (MDAs) and Production Sharing Agreements (PSAs) seals. When it started, two years ago, neither did Tanzania EITI process assume difficulties created by opacity would cripple it down.

Behind the Report

Interestingly, reading the report between lines, even an ordinary none inquisitive person may find glare stories starkly shining above numerical discrepancies. Why did the Government negotiate MDAs with no considerations of such vital taxes as windfall tax? Does it imply, that unlike Australian and Canadian similar operations, the 'wind' of extractive industries in Tanzania does not 'fall' with shooting profits at particular production time?

Opening another page, I note something really very strange; the very small figure indicating to me and fellow countrymen and women that corporate tax yield from extractive industries investments is comparably smaller than the Pay As You Earn (PAYE) tax yield feeding into the Government coffers. Yah, so now I understand why the Government should join hands with the Tanzania Mines and Construction Workers Union (TAMICO) to push for more pay! In one financial year only, during 2008/9, workers paid the tune of US$ 35,151,382 to the Government while the latter similarly receiving US$ 1,097,111 as corporate tax from mining and gas companies! I don't need the statistical aid to underscore the difference, thus rightly proposing to Government to make policy shift, strategically raising mining workers' salaries because Government remains the only ultimate beneficiary. 

Bravo EITI; We Have Made It

Tanzanians should feel owing to EITI. The light the initiative has peeped into Tanzania extractive industries operations is vital for our struggles to ensure, in our own struggles to outlive poverty, no one disappears with our rightful extractive industries yields. Again, ignoring the significance of the figure, I note that during the 2008/9 period, the country's total resource revenue was US$ 48,243,874.45 compared to US$ 906.5 million export value of gold alone. Thanks to the first Tanzania EITI report; is our own made Government falling short of capacity to properly govern the extractive resources revenue or it is due to failure to recognise adequacy at the genesis of negotiating the extractive resources exploitation deal for the country? Are the extraction costs so enormously huge and therefore unprofitable to clients but contractors? As I note from the first Tanzania EITI report, the appropriate policy would be to make extractive industries investment competitive in which the appropriate strategy would be to mobilise and motivate Tanzania's own breed of corporate citizens to enter the industries. After all, I note between lines, the report showing overbearing of foreign corporate citizens!

Together with the above noted and other holes in Tanzania extractive industries revenue governance, I am concerned with the report showing discrepancy of over US$ 17 million royalties disappeared in the hands of our own custodian, our own Government. Where did the money go? Tanzanians will only rely on EITI, particularly extractive resource revenue transparency, to help get the right answer. Big up EITI to enlighten Tanzania, and in particular, the Publish What You Pay (PWYP) Coalition in Tanzania!

 

Bubulwa Kaiza is Tanzania Country Coordinator, PWYP Coalition and Member Tanzania EITI Multi-Stakeholder Group