Jafo wants ‘right answers’ on Mchuchuma, Liganga projects

Dar es Salaam. The twin Liganga Iron Ore and Mchuchuma Coal projects have been on and off for over a decade now, but the new Industry and Trade minister, Dr Selemani Jafo, believes it is still possible to strike a meaningful deal.

Dr Jafo, who swapped dockets with Dr Ashatu Kijaji in President Samia Suluhu Hassan’s July 3, 2024, mini cabinet reshuffle, has directed the National Development Corporation (NDC) and its Board of Directors to immediately identify challenges facing the twin projects to find solutions.

He said this in a statement during a working session with the management of the ministry, heads of institutions and chairmen of the boards.

"The project has taken too long to take off. What is the problem?” Why is it stuck? What is hindering it from moving?" he inquired.

It is now almost 14 years since the Chinese firm Sichuan Hongda Group Limited was awarded a tender to develop the over $3 billion Liganga iron ore-to-steel project, but since then, little has been done.

It was an apparent response to such a situation that, when she graced the inauguration of an assembly plant for lorries and tipper vehicles at Kigamboni in Dar es Salaam in May this year, President Samia Suluhu Hassan directed her lieutenants to expeditiously find an investor for the twin Liganga Iron Ore and Mchuchuma Coal projects.

Tanzania China International Mineral Resource Ltd. (TCIMRL), which is spearheading the $3 billion project on behalf of its parent company, Sichuan Hongda Group Limited (SHG), says that though it still holds a valid contract for its development, there are still issues of tax incentives that the government has not yet gazetted.

The TCIMRL Deputy CEO, Mr Eric Mwingira, said recently that the Ministry of Finance was yet to publish the granted investment incentives approved by the government and enshrined in the two signed performance contracts in the Government Gazette to make them legally operational as required by law.

He said the project has taken a long time, and the government, through the National Investment Steering Committee (NISC), approved the tax incentives they sought, but it has yet to work on them and gazette them as legal.

But the government has a different view of the entire situation, with the Deputy Minister for Industries and Trade, Mr Exaud Kigahe, telling The Citizen recently that Tanzania was ready and willing to see the project take shape.

He, however, said that the challenge that the government was facing was that major investors were not coming to the negotiation meetings and instead preferred to be represented by people who could not make final decisions.

But according to Dr Jafo, there were many opportunities at NDC, including the Liganga and Mchuchuma projects, and therefore it was imperative to understand what the challenges were in order to solve them and enable the project to take off. 

"I started hearing about this project a long time ago since I was elected as a Member of Parliament, and until now it has not taken off to produce what was required, although it is an area that can provide employment and increase income in the country," he said.

According to him, a majority of institutions under his ministry have incomplete projects, and therefore he directed them to provide information on the cause of the deadlocks and what needs to be done in order to have them up and running.

He stressed that with the Liganga and Mchuchuma projects, there are many opportunities that have not been achieved, so the NDC executives should handle the project so that it can produce steel as required.

"I want to get answers about the Liganga and Mchuchuma projects, why they are not taking off, and what needs to be done," he said. 

He noted that there is another soda ash project in Engaruka that needs compensation for those around the area.

"Look how it's going; within one month from today (July 15), I need to get information because it's an area that can provide jobs to the people," he said, adding that everyone should work to the required standards to succeed. 

Dr Jaffo touched on another area that needs to be looked at: warehouses, which he noted are many and have the opportunity to grow the country's economy.

He said that local officials should monitor all the warehouses in the country and know the incoming products and how they contribute to economic growth.

He said another area is Small and Medium Industries (Sido), where he wanted to be given information about each area, what is being done, and the existing strategies for the relevant area, along with recommendations.

On the other hand, he questioned the Business Registration and Licensing Agency (Brela) and said that they should not hinder business but should better manage to help entrepreneurs so that those with less capital can also be registered and start doing business early.

For the Measurement Agency (WMA), he said that they need to manage their responsibilities well and give an example of products that do not meet the required volume, but the consumers who are citizens continue to abuse them.

"For example, there is a volume of 50 kg of cement, but the measurement shows that it is 45 kg.