LAST Sunday, Tanzania inaugurated the first gold exchange hub in East and Central Africa in Geita. The exchange, one of its k ind after Botswana’s diamond and South Africa’s gold hubs, is set to serve the Eastern Region entirely.
The government built a One-Stop-Centre to curb gold smuggling, which had been denying the country much needed revenues. Also, the exchange will bring closer gold buyers to artisanal miners; hence bring to a halt the long time cry over an imperfect market.
Inaugurating the market, the Prime Minister, Mr Kassim Majaliwa, directed that these exchanges should be established in all regions that have mining related activities.
The PM said come June 3 0th all these regions should establish the exchanges. Look ing at the cost at which Geita built its exchange, it is very possible for the others to do so.
The Geita Gold Exchange was constructed at the cost of 542m/-. Yes, the regions can allocate that budget within their internal revenue or borrow from commercial banks.
And the payback period, if the mineral exchange will be well managed and marketed, is not that long. Bank s will be happy to lend the regions, since they too will be the first tenant of the exchange and other stak eholders include TRA, Ministry of Minerals and other government agencies dealing with minerals.
That apart; the idea of having only one exchange is welcomed but as the PM put it, let’s think of those who are conducting mining activities hundreds if not thousands k ilometers from Geita.
They may continue selling minerals across the border. Mr PM says lets observe the performance of Geita Exchange.
This is very imperative, because in due course, other exchanges may become domestic hubs and Geita may stand as a regional or international mineral center for the country.
That way, the exchanges at regional levels will act as the collectors of gold/ minerals and channeled them to the wholesale over-the-counter in Geita, similar to the London bullion market.
The London bullion market is a wholesale over-the-counter mark et for the trading of gold and silver. Trading is conducted amongst members of the London Bullion Market Association (LBMA), loosely overseen by the Bank of England.
Then let us extend Geita exchange to that level and other regional/domestic exchanges to feed the wholesale centre. The Geita exchange has all it tak es to mak e it a wholesale market.
The region’s gold output accounts for 35 per cent of the country’s total. Also it borders other gold producing regions such as Shinyanga and Mara that host large scale and artisanal miners. For Geita to reach a regional or international stage, it needs members who are major international bank s or bullion dealers and refiners. To reach that stage will tak e time but where there is a will there is a way.