Wednesday, November 1, 2017

BOTTOM LINE: Let’s not get ahead of ourselves on ‘historic’ Barrick deal

Nkwazi Mhango is a Tanzanian writer based in

Nkwazi Mhango is a Tanzanian writer based in Canada 

Recently, Tanzania released the report of the outcome of its negotiations with Barrick Gold. The talks  started after the government commendably decided to look into mining businesses in the country, and made unpleasant discoveries. Acacia Mining, a Barrick Gold affiliate, faced accusations of evading tax for about 19 years, and exporting concentrates without declaring the actual amount of the minerals found in them.

So, too, it was unearthed that Acacia was operating in Tanzania ‘illegally’. Therefore, two taskforces were formed to look into the matter thereby unearthing a lot of rot, which forced the government to, temporarily, suspend Acacia’s activities in Tanzania conditionally that it should negotiate with the government, which it did through Barrick Gold.

After over three months of negotiations, President John Magufuli hailed the outcome as a historic breakthrough. However, critics are a bit wary about this elusive breakthrough. The President told the nation that Barrick Gold, not Acacia, agreed to pay $300 million as a sign of ‘goodwill’ or showing either sincerity or dependability, which is a bit convoluted. Barrick spokesperson Andy Lloyd was recently quoted by the Minning.com as saying that “that is not a concession that is complying with the law.” The promise to cough $300 million enthralled Dr Magufuli who said he wanted the money quickly so that it could be used in the provision of public services.

Despite such palms, there are some unanswered questions with regards to the Barrick deal. Critics think it is too early for Tanzania to celebrate provided that the negotiations are ongoing. The major question is: What criteria were used to reach such an amount? Can the goodwill or trustworthiness be translated into money or through admission of the offence? For conflict resolution scholars, this offer is cloudy and headachy so to speak.

Trust in negotiations can be displayed through cooperation in problem-solving approach whereby the parties in conflict agree on some issues in principal but not through inducements as it seems to be in this case. Logically, inducements may help the offender to predict the behaviour and the next move of his or her opponent.

For example, Barrick offered the money. Tanzania accepted it without qualms. This tells us something. Success in negotiations, sometimes, is about timing, scheming, trust building and whatnots. Entering negotiations doesn’t necessarily warrant trust and cooperation.

Is the offered amount aimed at inducing Tanzania? What did Tanzania offer in reciprocating to the  new-found friendship and generosity that forced Dr Magufuli to refer to Barrick as brethren and not pilfers as it once was perceived of them after unearthing the scam? Such questions are valid provided that the two taskforces, one headed by Prof  Abdulkarim Mruma and the other Prof Nehemiah Osoro, unearthed a lot of rot and wheels and deals. The findings of the taskforces – that Acacia rubbished – concluded that Tanzania lost between Sh68.59 trillion and Sh108.46 trillion from unpaid mining taxes due to under declaration of exports of metallic mineral concentrates by Acacia Mining PLC in the 19 years (The Citizen, June13, 2017). From such an amount, the government was supposed to receive at least US$ 60 billion in revenues (The East African, 12 June, 2017). When one looks at such figures and compare it with $300 million, chances are that the so-called big deal might turn out to be a bad deal or a no deal. Instead of buying goodwill, methinks the government should disclose how much money Acacia is going to pay but not to offer in goodwill or whatever.

 Again, the issue was about showing good will, trust, commitment or whatever it is called. The issue was simply about the two parties reaching an agreement on what is owed and how it is going to be paid. Posterity will judge,  but methinks it is too early to rejoice or jeer.

Nkwazi Mhango is a Tanzanian writer who is based in Canada

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