Tanzania, Canada's Barrick Gold sign deal to settle tax dispute
Between a new deal being signed with Canadian company Barrick Gold, speculation about a possible travel ban and this country's shilling losing ground since the beginning of the year, Tanzania's markets seem to be going through the wringer this week. Bankable Partner, Ivan Tarimo joins CNBC Africa for more.
Tue, 28 Jan 2020 10:48:34 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The three-year journey of reforming agreements in Tanzania's mining sector under President Magufuli's leadership leads to the signing of a landmark deal with Barrick Gold, setting the stage for a new era of mining investment in the country.
- The agreement between the government and Barrick Gold includes significant benefits such as shared ownership, economic profits, stakeholder engagement, social responsibility, and infrastructure development, signaling a positive outlook for the mining sector.
- The Tanzanian shilling experiences fluctuations in January due to increased business demand, but has generally remained stable over the years, reflecting a sense of currency stability amidst economic challenges.
Tanzania's markets have been under scrutiny recently due to a variety of factors such as a new deal being signed with Canadian company Barrick Gold, speculation about a possible travel ban, and the country's shilling experiencing some fluctuations since the beginning of the year. The government of Tanzania has been engaged in a three-year-long journey of reforming agreements within the mining sector ever since President John Magufuli assumed power. The dispute over tax payments and other issues prompted the government to seek more favorable terms for the nation. The recent deal signed with Barrick Gold represents a significant milestone in this journey. Under the new agreement, the government will have a 16% ownership in the newly formed entity called TUIGA, with a 50-50 share of economic profits. The deal also includes clauses on stakeholder engagement, social responsibility, and significant investments in road infrastructure and skills training. This partnership between the government and Barrick Gold is expected to bring a range of benefits to both parties and sets a positive tone for the mining sector in Tanzania. The signing of this deal has been described as seismic and is likely to attract other serious investors to the sector. Dr. Mark Bristow, the chairman and CEO of Barrick Gold, expressed satisfaction with the agreement, signaling a promising future for mining investment in Tanzania. The government has also signaled its openness to similar transactions, emphasizing Tanzania as an attractive investment destination. On the currency front, the Tanzanian shilling has experienced some fluctuations in January, with increased demand from businesses after a period of relative stability. Despite seasonal fluctuations, the shilling has generally remained stable over the years, with minor weakening. Analysts suggest that the shilling tends to face challenges in January but tends to normalize towards the end of the month. Overall, the shilling has maintained a steady performance, reflecting a sense of stability in the currency. As Tanzania navigates through various economic challenges and opportunities, the recent Barrick deal and the performance of the shilling offer a glimpse into the country's economic landscape and its prospects for growth.
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