‘Makinikia’ and economic liberation: The untold story – 1

The political leadership of Tanzania that ended in 2021 unleashed a spectacle of decisions and actions which triggered the Makenna Epic that in my opinion was intended to change the neo-colonial narrative into a new narrative that embraces a complete economic emancipation from the neo-colonial legacy.

This new narrative was meant to ensure that the mining industry brings more benefits to the country and its people.

The Makinikia story was a result of a ban on the production and exportation of copper concentrates (known as Makinikia) from the Bulyanhulu and Buzwagi Gold mines operated by Acasia Mining PLC a subsidiary company of Barrack Inc. Company of Canada.

The ban was imposed on the grounds that due to opaque export procedures and laxity of regulators it allowed investors to evade payment of appropriate taxes amounting to $360 billion to Government confers for over 18 years and in that regard investors were issued with a tax certificate to pay these taxes.

What came to pass left every Tanzanian citizen in limbo awe and in this respect the Makinikia untold story regardless of its mythic nature was part of a network of decisions in an enduring series of reform attempts to ensure that the nation reaps a fair share of profits accruing from the mining industry.

In order to unknot the myth and eliminate conspiracy theories around the Makinikia story it must be properly understood by telling this story not in isolation but in the context of the entire story of evolution of the mining industry of Tanzania.

Therefore, in a series of articles and with a surgeon’s precision journalism, we will dissect what happened in the minerals political economy narratives of Tanzania and the associated reforms undertaken therein since independence.

We begin by looking at the episode right after independence (1961- 1967) as the new country was emerging from colonialism it needed to be economically and politically self-reliant.

Unfortunately, Tanganyika (now Tanzania) and other African countries had achieved political independence but they were immediately thrown into a state of economic dependence as colonialism had metamorphosed into neo-colonialism.

In neo-colonialism all economic activities including mining continued to suffer from the colonial legacy that ensured mineral raw materials from Tanzania and Africa in general were extracted and exported abroad to support fast growing industrial and technological revolutions.

At the time of independence a free market economy dominated the economic arena and the mining laws were a series of colonial Mining Ordinances that guaranteed that minerals would benefit the former colonial Governments abroad. This situation rendered the mining industry in Tanzania and other developing nations to be an outward looking economic activity and an enclave of its own without the necessary local linkages to the other sectors of the economy.

Therefore, the first generation of African Leadership began a long walk to economic liberation by engaging in a struggle to gain complete economic emancipation.

They first thought of uniting Africa into one grand country the United States of Africa in order to pull resources together and ensure that all means of production and the economy including mineral resources were to benefit the people of those free nations. They (leaders) endeavoured to ensure that mining brings the required economic benefits mainly by expanding its local value chain for more benefits, they designed a series of reforms to achieve the vision.

Looking at the state of the mining industry at the dawn of independence we see the existing large scale mines that were established by the Germany/British colonial administrations including Geita Gold Mine; Buhemba Gold Mine; Korandatal Gold Mine, New Saza Gold mine; Mkwamba Gold Mine, Kiyabakari Gold Mine; Canuck Gold Mine; and Mwadui Williamson Diamond Mine and others flourishing but all with little benefits to a new Tanganyika.

Next week we will therefore examine the fate of the mining industry in the Ujamaa policies under the Arusha Declaration talons that wanted more benefi ts from the mining industry.