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Policy twists woo new investors

Billions of dollars of new projects are moving ahead after President Hassan and her new government have signalled a change in economic and political strategy

President Samia Suluhu Hassan has spent much of her first four months in office trying to re-establish relationships and moderate the radical policies of her predecessor John Magufuli, who died in March. She is far too diplomatic to say that but her initiatives are winning attention and some new money.

Surrounded by a clique of old-guard politicians from the ruling Chama Cha Mapinduzi party and local business magnates, Hassan has been holding out an olive branch to mining investors signalling an end to Magufuli's resource nationalist approach.

China's Sichuan Hongda has earmarked US$3 billion for a new iron and coal mine complex. That is moving ahead under Hassan, as is a $30bn liquefied natural gas terminal developed with Royal Dutch Shell, Exxon and Equinor ASA.

The announcement of recent mining deals with overseas firms for gold, graphite, and nickel, along with the launch of a new tailored financing facility for the resource sector, have persuaded many smaller mining companies to look again at Tanzania's wealth of mineral reserves.

The country's mining future is set to include Barrick, the world's second-largest gold mining company, one of the firms to have had a long running tax dispute with the Magufuli government (AC Vol 58 No 15, Magufuli's law & Vol 61 No 3, Mining for clarity). Having finalised a settlement on its tax liabilities and the state's stake in its projects, Barrick CEO Mark Bristow told President Hassan this week that his firm was ready to increase its investment in the country.

Barrick said that its local affiliate, Twiga, a joint venture with Tanzania's government, is mining in Bulyanhulu, North Mara and Buzwagi, projects which it said contributed over $370m in taxes and royalties to the state treasury last year.

Minerals minister Doto Biteko has urged local banks to club together to offer cheap loans to domestic mining firms after NMB Bank became the first lender to launch a special mining club designed to offer soft loans.

Local billionaire Mohammed Dewji, who was kidnapped briefly during the Magufuli era, says that his company MeTL will boost production, making Tanzania the world's biggest producer of sisal. MeTL, which Dewji claims accounts for over a third of Tanzania's industrial production, is also expanding production of textiles, flour-milling and beverages.

Hassan's biggest political break with Magufuli's policies was her emphatic end to official denialism about the Covid-19 pandemic and the adoption of widespread measures to contain it and the government's joining of the Covax public-private partnership to distribute vaccines.

Another big economic break with Magufuli's policies is her reopening of negotiations with China Merchant Holdings to build a $10bn new port, 75 kilometres north of Dar es Salaam at Bagamoyo (AC Vol 61 No 14, Magufuli wants a mega-dam).

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