Firm spent USD 1.1bn in Tanzania

African Barrick Gold contributed a total of $1.1 billion to Tanzania’s economy in 2012 accrued from the largest miner’s spending in the country, Ernst & Young said in its new study launched Tuesday evening.

The money was spent through payment of wages and taxes, community investments as well as purchase of goods and services from local suppliers.

ABG is Tanzania’s largest gold producer and one of the five largest gold producers in Africa with four producing mines, all located in Northwest Tanzania. Ernst & Young Tanzania managing partner Joseph Sheffu, said the company created 5,469 jobs as of September 2013 dominated by Tanzanians at 93 per cent.

“However, the number of jobs created through supply chain and consumers was huger than this in the country,” he said.

ABG board member Juma Mwapachu said there was a need to evaluate contributions made by companies operating in the country by looking at employment opportunities they create and not mere corporate taxes they pay.

“There is a narrow thinking within the government and the public that companies are measured by the amount of corporate tax they pay. 

"What is, say $10 million for a company that has operated for 20 years? We need to focus on employment opportunities created which have a multiplier effect for the country to move to a middle income status,” Mr Mwapachu said.

Some stakeholders were concerned that the company contributed a huge amount but the impact was not realised in reducing poverty, especially in areas surrounding mining sites. 

“The concern here is how the wealth trickles down to communities surrounding mining sites because sometimes you find those areas in extreme poverty compared to others,” said Dr Honest Ngowi, economics senior lecturer at Mzumbe University Business School.

Mining sector contributes 3.7 per cent to Tanzania GDP and ABG alone cover around 3 per cent, according to Ernst & Young.

The government targets at least 10 per cent contribution come 2025 but Deo Mwanyika, ABG vice president (corporate affairs) said the goal is unlikely due to the fact that no new mines are opening while the existed are closing.

ABG is in final stages to hand Tulawaka to the State Mining Corporation due to its winding-up lifespan.
Source: The Citizen, reported by Alawi Masare from Dar es Salaam, Tanzania
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