Tone of reconciliation with Acacia Mining positive, to reduce risks

Talks with President John Magufuli struck a positive note, with the State House saying the firm agreed to the condition of reparations that the president sounded in accepting the report of the second committee handling economic and legal issues on concentrate exports.

It enticed a sigh of relief. The reason for this sense of relief is that accommodations will have to be made relating to the sentiments of the other party not just on their legality but also the substance or value of their operations, based on what is habitually understood to be standard international law on contracts.

As the legislature was told when debating a bill relating to the natural gas industry in September 2015, changes in the law do not affect past contracts but new ones.

If one can’t change the contract entered with oil and gas firms, it can’t do so with mining firms either; they must talk and agree. Despite that there is plenty of debate as to what sort of risks are involved in the dispute with Acacia Mining, that aspect of standard treaty practice is without much doubt, in which case everything hinges on finding either middle ground or areas of agreement with the Canadian firm.

At the same time, activists point out that the firm is under intense pressure in Canada itself to make amends in what it was doing, and at the same time the spirited dispute sent its shares reeling on leading stock markets.

The tone of reconciliation seems to work some magic on its shares. Those who listened to the president’s remarks in receiving the report and the various measures undertaken in that regard realize that the dispute involved and its psychological parameters has all the dangers of perilous action.

Certain voices have underlined the need to remain level headed, avoid reacting entirely out of disappointment, of an intense sentiment of being cheated, etc.

The facts are there, definitely but that is itself a learning process, in which case the focus ought to be directed to rectifying the situation and it seems on that point Acacia will cooperate.

The challenge that the government faces in dealing with the Canadian firm can be said to be replicated internally, where responsibility for the contracts is a hot issue.

Yet there is an Acacia talks syndrome in that aspect as well due to government responsibility as a whole, not just some minister. One can’t shake off the issue.

Still, there are perhaps auxiliary issues in how the mining sector was being supervised, where some excesses for instance in promulgating certain regulations in matters that are within the ambit of ministerial decision, where discretion might have been made with intent to favor the mining company.

It is also being pursued to set out whether there were pecuniary gains in such discretion, but it is also true that the public mood is not proceeding from some auxiliary regulatory issues but the contracts and thefts taken as a whole.

That is where care ought to be taken. In the wider contention with Acacia Mining there were risks of being boycotted by a number of industrial states with a voice in how several multilateral organizations are run.

These are reduced with the reconciliatory tone raised. At the local level there is need for a similar focus to avoid widening political rifts but change things.

Rebuilding of municipal roads: Who will bell the cat on expenditures?

AT least one legislator was lately expressing concern on implantation of road infrastructure projects, especially rebuilding of municipal roads after heavy rains dislodged bridges and messed up with roads in the countrty.

Some repairing is being noticed by filling potholes, but not much is being done in adding gravel in damaged areas to restore all-weather conditions in many roads.

Municipalities maintain roads with mounds of soil and fortify them with stone or cement materials in a way that is causing havoc in many areas. With least rainfall, mud takes over.

Complaints about muddy roads that are almost impassable are being heard all over Kinondoni municipality in the city of Dar es Salaam, Temeke municipality and the same is likely to apply in many other places.

One MP who was demanding uplift of certain infrastructure in his constituency pointed out that it the work is done by the municipal authorities it will cost twice as much compared to if it will be conducted by ministerial agencies.

The relevant deputy minister indicated that there was a series of projects of like nature that the central government would directly handle. For one thing, the sort of excessive expenditure that is being talked about in relation to roads is a common phenomenon both at central government level and local governments, but to varying extents.

Former Treasury deputy minister Kilontsi Mporogomyi once told the legislature that constructing one kilometre of tarmac road in Zambia costs around $500,000 while in Tanzania the usual cost cited is $1.9m.

Why does Tanzania use four times as much to build tarmac roads, and did this situation change at some point or is it still prevailing? With efforts of the Controller and Auditor General to rein in negative expenditures in municipalities and district councils having improved fiscal conduct in these entities, there is a wider problem that was being addressed by some MPs, including Chalinze MP Ridhiwani Kikwete.

He asked during debates on ministerial estimates why the government has to extract taxes by all sorts of means from the population instead of using leverage financing for instance.

There was no direct response to the question; it needs public/private build/operate on loan basis, not direct loans. It needs shifting from municipalities paying contractors, to tendering the roads on competitive basis to build and maintain for a CAG approved rent annually.

That would include a reasonable principal sum and interest paid across several years, so it works.

It implies all roads being built to all weather level to reduce repair costs. What we often don’t realize at the level of policy formulation is that personal interest is part and parcel of administrative choices or design, and at times falsely perceived collective interest contributes to faulty policy decisions that we make.

In that case the usual lack of appreciation for competitive systems in preference for municipal authorities where insensitivity to criticism is more intense than at central government level occasions many of the errors that we make.

Now that the fifth phase government wants to achieve more faster, why doe it not change the way municipal roads are handled instead of relying on sacking individuals periodically?