JPM orders special audit on mining industry

Dar es Salaam. President John Magufuli has directed the Controller and Auditor General (CAG) to conduct a special audit on the mining industry to expose loopholes that have been causing the government to lose what it should be earning in revenue collection.

The President said that although the country is blessed with immense natural resources, which include minerals, most wananchi haven’t been benefiting because of unscrupulous officials and dubious investors.

Dr Magufuli issued the order yesterday, when he was receiving the 2015/16 CAG Audit Report at the State House.

“It doesn’t sink into my mind that there are no drugs in hospital while investors are exporting gold; it is impossible that there is no water for Tanzanians while the country is blessed with abundant natural resources; Tanzanians should benefit from their natural resources,” he said.

The President directed CAG, Prof Mussa Assad, who handed him the report, to investigate how the country was losing revenue through tax exemptions to investors as well as questionable investment contracts.

He also directed Prime Minister Kassim Majaliwa, who was present at the handover ceremony, to call a meeting which would bring together the CAG, permanent secretaries, Bank of Tanzania (BoT) governor as well as heads of departments of public institutions so that the auditor general could reveal the actually financial situation in areas under their jurisdictions.

“Honourable Prime Minister, you should chair the meeting and the CAG should reveal the real financial situation of ministries and other public departments so that the accounting officers take the necessary measures,” said President Magufuli.

President Magufuli’s order comes just a day after the Speaker of the National Assembly, Mr Job Ndugai, promised to form a parliamentary committee to investigate whether Tanzania has been benefiting from the mining industry. Mr Ndugai told reporters during the surprise visit that Parliament was shocked by the seizure of 282 gold ore containers that had already been cleared for export. Twenty-six containers were impounded during President Magufuli’s visit last Thursday and 256 more were seized at the Kurasini inland container depot near the port.

The containers that had already been cleared by the Tanzania Revenue Authority (TRA) belonged to Buzwagi and Pangea gold mines.

Mr Ndugai said the National Assembly was concerned about the development and it was decided that the team travels to Dar es Salaam to assess the seriousness of the problem and advise the government accordingly.

Mr Ndugai, who was accompanied by ten MPs from the Budget and Energy and Minerals committees, said the team would be tasked with scrutinising mining contracts the government has entered into with mining companies and give recommendations on the value chain in the mining sector. He said the Parliament would like to identify Tanzanians charged with assessing minerals starting from the source to foreign countries where the ores are exported, saying it was illogical to transport natural resources to Germany, Japan and China without having a system that safeguards the country’s interests.

Handing over the report to the President, Prof Assad said although there has been improvement in the control of public expenditure, there is a need to do better in some areas.

According to him, the government was still losing a lot of revenue in the mining sector and through tax exemptions granted to investors.

“Some Independent Power Producers (IPP) have been selling power to Tanesco at an exorbitant price,” noted Prof Assad.