Thursday, March 4, 2010

The Tragedy of rich resources and striking poverty in Tanzania!

Tanzania is known for its richness in natural resources, from variety of wildlife, forestry, minerals such as gold, diamond, copper, nickel and Tanzanite and rich coastline. However, it’s shocking that with all the vast wealth, massive poverty continues to rock majority Tanzanians. Though it’s hard to believe but that is the reality in a country where 89% of the total population live under official poverty line. This clearly shows how the government has not always acted in the best interests of many Tanzanians by failing to ensure people’s livelihoods are improved through proper management of these resources

The problem is mainly due to the fact that most the companies involved in both mining and fishing are multinationals and in case of mining, these companies take away 97% of the revenues and the government get the remaining 3% as royalties and taxes. The problem is also due to corruption and greedy nature of our politicians as well as mismanagement and also lack of political will from the state. For instance, tax laws are overly favourable to the multinationals and as a result Tanzania is being plundered of it its rich resources. According to the report by Action Aid International, Canada-based Barick Gold reported a net income of $97 million between 2004 and 2007 but paid no corporate tax to the Tanzanian government.

To government must act urgently to address the situation by doing such things as reviewing of investment laws to ban such things like tax concession which allow the multinationals to avoid corporate tax. I also think if it’s possible the government should abolish 100% foreign ownership in these companies by taking some stake in them. Again the mining law should be amended to ensure that Tanzanians benefit much more from these resources because with all this wealth there is no reason why Tanzanians should remain poor.

Meanwhile, the civil society organizations (CSOs) should forge a strong coalition and lobby the government to ensure that tax laws are amended so as to prevent tax evasion by these companies, to abolish tax concession and VAT exemption. They should also advocate for increase in payment of tax and royalties by at least 40% of the total revenues.

They should also help to bridge the information gap because few Tanzanians are adequately informed about their rights related to natural resources. Few fully understand government roles and responsibilities regarding natural resources. Through education and information dissemination by the CSOs, the public can have a better understand its rights to participate in government decision-making, monitor government performance and demand compliance, and ensure environmental accountability.

CSOs should also send petitions to the parliament to ensure that both mining companies and the government are required b y law to make full public declaration every year, on how much they have paid (companies) and how it has received (government) in terms tax and royalties.

On the on the other hand, young environmentalist trainees should make that they use the acquired knowledge to spearhead the much needed change in natural resources especially on the 3 sub sectors. They should offer their respective organizations full support especially on issues of local community participation to ensure that their concerns are considered before major decisions are taken.

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