Former CAG advocates for open mining deals

Dar es Salaam. For the first time since the government passed new mining laws, the Tanzania Extractive Industries Transparency Initiative (Teiti) yesterday released its report, with the body’s chairman calling for total exposure of mining contracts.

The report indicated how mineral law reforms have impacted the industry as the country continues to push for more benefits from minerals. The report says the value of mineral exports has dropped by up to 13.3 in the last two to three years due to various reasons.

But it shows the value is expected to improve in the coming years.

Newly-appointed Teiti committee chairman Ludovick Utouh said there is need to put in the open all extractive contracts between the government and private companies.

Mr Utouh said there was also the need to have transparency on the owners of the companies as well as having an oil and gas registry.

According to him, for Teiti to be compliant, there was the need to complete the formation of the initiative. “We also need companies to complete in a timely manner information needed to ensure our reports are timely as the law requires,” Mr Utouh insisted.

On the need to be fully compliant, he said companies in the mineral as well as oil and gas sectors need to comply and be transparent in issuing relevant data to avoid hitches that Teiti encountered when preparing the 2016/17 and 2017/18 report.

The Teiti lead consultant, Dr Gabriel Kombo - who is also the Mzumbe head of Department of Accounting and Finance - read the report’s key findings during the launch of the ninth and tenth reports for the 2016/17 and 2017/18 financial years.

Explaining, he said when collecting and analysing data from the extractive firms for the purpose of increasing transparency in the revenue expenditure derived from extraction of minerals as wells as oil and gas, not much was revealed.

He noted that in the course of the exercise, they encountered many problems including some companies refusing to disclose relevant information needed, particularly that of their beneficial ownership.

“The ministry of Minerals needs to understand the importance of issuing correct information released by companies on issues like royalties, fees paid among others,” he said.

According to him, there was also the need to put in place a register showing licences for natural gas and oil players. He insisted that companies and government institutions must adhere to the Teiti Act that requires them to submit on time statistics on payments and revenues.

He further said that mineral contribution to government coffers was 79.69 percent in 2016/17 compared to 75.83 in 2017/18 while that of gas and oil sector was 20.31 percent and 24.17 percent respectively.

Further noting that the mineral royalties contributed 32.84 percent in 2016/17 compared to 46.62 percent in 2017/18.

He noted that the value of minerals produced in 2017/18 was Sh3.77 trillion showing a decline of 1.01 percent compared to that of 2016/17.

Further the value of minerals sold outside the country fell by 13. 3 per cent in 2016 and 2017 due to changes in the mining regime that saw the banning of exports of copper concentrates.

However, he noted that during the course of collecting data some information did not match due to shortcomings in accounting of transactions procedures. He highlighted that review of payments and revenues made by 41 companies to the government in 2016/17 was Sh510.6 billion but government admitted receiving Sh508.6 billion recording a difference of Sh1.9 billion equivalent to 0.38 percent.

In 2017/18, 34 companies paid Sh732.3 billion but the government admitted receiving Sh728.9 billion, thus recording a difference of Sh3.4 billion: roughly 0.47 percent.

For hia part, Minerals Minister Doto Biteko urged all companies that had not revealed information required by Teiti to be identified so that action can be taken.

He said that the government had used it’s own consultant to a tune of Sh200 million - unlike when it used foreign consultants, and had to pay Sh1.5 billion.