Tanzania Loses $84bn from Undeclared Revenues by Mining Firms

by F2FA

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Employees of Acacia Mining at work in Tanzania. Photo credit: Aggrey & Clifford

DAR ES SALAAM – A commission of inquiry set up by the Tanzanian President John Pombe Magufuli has revealed that Tanzania has lost close to $84 billion over the last 19 years from undeclared revenues by mining companies.

The commission, which handed in its findings in June in a televised ceremony at State House in Dar es Salaam, reported that mining companies in the country have been under-reporting the amount of minerals they export, according to the BBC.

The commission further revealed that a Canadian mining company, Acacia Mining – the largest gold miner in the country – is not registered in Tanzania and therefore has been operating in the country illegally.

“The committee couldn’t find any recognized legal documents to prove its operations in Tanzania or holding shares on the three mines operating in the country,” said the commission’s chairman Nehemiah Osolo.

“Legally speaking it is clear that the mentioned mining company is a non-existing firm in Tanzania.”

The findings came a few days after another government study revealed that containers at the port have been carrying up to 15.5 tons of gold contrary to the 1.1 tons declared by Acacia Mining in its paperwork.

It further showed that government officials, especially at the port and in the mining sector, have been colluding with the mining companies (most of them foreign) to defraud the country.

The earlier report led to the dismissal of the minister in charge of mining and other top officials in the mineral sector.

President Magufuli has now ordered the Minister for Legal Affairs to review all mining laws and warned government officials against conspiring with mining companies to evade tax, the BBCreports.

But in a quick rejoinder, Acacia Mining rubbished the commission’s findings, saying they had significant discrepancies.

Under the Tanzanian law, companies operating in the country must register with Tanzania’s Business Registration and Licensing Authority.

Stealing from the Poor

In a recent study done by several campaign groups, it was discovered that foreign companies have been stealing billions of dollars from Africa through tax evasion and other financial misapplications.

These multinational corporations steal much of Africa’s wealth “legally” by pretending they are generating much of their wealth in tax havens.

The campaign groups also reported that the so-called “illicit financial flows” amount to around 6.1 percent of Africa’s entire gross domestic product (GDP).

“African countries receive around $19 billion in aid in the form of grants but over three times that much ($68 billion) is taken out in capital flight, mainly by multinational companies deliberately misreporting the value of their imports or exports to reduce tax,” the report said.

Besides tax evasion, majority of these companies are largely to blame for the worsening climate change in Africa since majority of them employ destructive methods in their mining activities, oblivious of the extent of damage they have on the continent.

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