Tanzania’s new President Samia Hassan winning back investors’ confidence
Tanzania’s new president to review COVID-19 stance, lifts media ban©REUTERS/Stringer/File Photo“The change of tone ushered in by President Samia Suluhu Hassan over the last month could indicate a welcome to a whole new economic direction in Tanzania”, remarked Peter Leon, Partner and Africa Co-Chair, Herbert Smith FreehillsInvestors have been wary of dipping their feet in Tanzania’s investment pool, more so investors in the extractive industries. In March 2017, a total ban on the export of unprocessed mineral concentrates and ores was instated.Just four months later, in July 2017, after six days of deliberation, three new laws assented. The new laws gave significant power to the government, empowering it to control the extractives sector autonomously.The three laws that were altered are:The Natural Wealth and Resources Contracts (Review and Renegotiation of Unconscionable Terms) Act, 2017 (Unconscionable Terms Act);The Natural Wealth and Resources (Permanent Sovereignty) Act, 2017 (Permanent Sovereignty Act); andThe Written Laws(Miscellaneous Amendments) Act, 2017 which amended the Mining Act, 2010.Among other things, the laws, with immediate effect had this effect:Mandated the government to renegotiate any investor-state contract terms that Parliament deems “unconscionable”, and to treat them as “expunged” if the renegotiations are unsuccessful or unsatisfactory to Parliament;Entitled the government to a minimum 16 per cent free-carried equity stake in the holder of a mining right (which may be increased to 50 per cent);Ban the export, and restrict the handling, of raw minerals;Raise royalties to 6 per cent;Restrict the repatriation of investments and returns;Prohibit mining companies from keeping earnings in offshore bank accounts;Limit recourse to international arbitration.In the same vein, in January 2018, the Minister for Mines published a suite of new regulations under the Mining Act, 2010. Among other things, the Regulations introduced new local content obligations, amended existing obligations relating to the issue, renewal and transfer of mineral rights; and imposed obligations on the export, import and trade in minerals.
Source: Further Africa