Mon, Aug 31, 2015
My government will review all major energy and mining contracts and rectify shoddy deals
Tanzania's main opposition presidential candidate said he would review mining and gas contracts, and also scrap "unnecessary" tax exemptions for mining companies, if elected president of the east African nation in October.
Former prime minister Edward Lowassa, 62, snubbed as the ruling party's candidate last month, switched to become the opposition coalition's contender. He could pose a tough challenge for the CCM, which has ruled since 1961.
"My government will review all major energy and mining contracts and rectify shoddy deals," Lowassa said late on Saturday in a televised statement, without giving specifics.
Some in the opposition say contracts with foreign firms are too generous, although investors' terms are fair. Experts say last year's weak response to a licensing round indicates that Tanzania needs to tread carefully to avoid deterring investors.
Investors in Tanzania, Africa's fourth biggest gold miner with plans to develop huge new gas finds, have complained of shifting goal posts in contracts with the state.
"My government will also eliminate unnecessary tax exemptions in the mining sector ... and use part of its stake in gas reserves as collateral for loans to finance construction of natural gas infrastructure," Lowassa said.
Tanzania estimates it has more than 55 trillion cubic feet (tcf) of recoverable natural gas reserves off its south coast.
BG, Statoil, Exxon Mobil, Ophir and Petrobras are players in Tanzanian energy. Miners include Acacia Mining Plc, AngloGold Ashanti and Petra Diamonds Ltd.
Rival camps have both launched campaigns for the Oct. 25 parliamentary and presidential elections.
Lowassa, who boasts some popular support, quit as premier in 2008 over corruption allegations that he denies. Analysts said those allegations encouraged CCM officials to snub him, given their promises to fight graft.
"My government will levy lower taxes and fees to joint ventures between local and foreign investors, while foreign investors who are not in joint venture with locals will face higher taxes and fees," Lowassa said.
The government said in May it would review mining pacts to secure a bigger share of revenues.
Analysts said the ruling CCM's candidate, John Magufuli, 55, is still best positioned to win, in part because the party has control of state institutions and has broader national reach.
"It is still very unlikely that the main opposition Chadema and other parties will unseat CCM at the presidential level, but parliamentary elections will be highly competitive," Ahmed Salim, an analyst at consultancy Teneo Intelligence wrote.
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