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Zitto Kabwe: Whose interest are you serving in tussle between Tanzania govt- Acacia Plc in Barrick takeover?

I HAVE been following up the tussle between the Government of Tanzania and Acacia Plc ever since it began more than two years ago and I am fascinated by the emerging African patriotism Tanzanians now have.

I am proud, whenever an African country takes the big boys by the horns to wrench a fair deal from the onerous arrangements, which the foreign multinationals managed to extract from our governments, whether coercively, deceitfully or corruptly.

Undeniably, in this effort, Tanzania is admirably the leading light to other African countries. Kudos Tanzania in this move!.

Recently I have been reading communications from one Mr Zitto Kabwe, who is a Tanzanian Member of Parliament (MP).

I am informed that he is a vocal opposition MP who devotes his time, among other areas mostly in the mining sector reforms, but what I see is that his campaign is to derail efforts being initiated by Barrick to takeover Acacia Plc, which meet the pre-conditions set by the Tanzania government.

As a keen follower of the developments in Tanzania, I have come to understand that conclusion of the negotiations came to a standstill, after the Government of Tanzania demanded that unless Barrick Gold Corporation (BGC) manages to takeover and delist Acacia Plc, there would be no agreement concluded.

Here the government made us very proud. The clear message is that Acacia be dismantled to pave way for a new company jointly owned by Barrick Gold Company (BGC) and the Government of Tanzania and this is surely laudable.

The structuring of the envisaged set up seems to be that BGC will jointly, with the Government, own and manage the gold mining companies, which were previously under the management of Acacia Plc.

It means that, if there would be any special treatment or incentives, they would be granted to the jointly owned company. The joint venture company needs to be assured of a takeoff that is free of disabling compliances and this makes it clear in business sense.

What is important is to see the kind of safeguards the government will have in place and all of us are keen and want to see the agreements and the terms.

It is interesting that Honourable Zitto is launching a scathing attack with conclusions that his government has already concluded the agree-ments with BGC.

In arrangements of this kind, there must be several agreements and all these need to be seen in order to understand how the government has progressed.

It is interesting to note that Honourable Zitto is attacking tax incentives purportedly granted to BGC and my understanding is that tax incentives can only be granted under Government Notice(s) and these cannot be made without having any agreements in place, for his information now.

If the government has clearly expressed the position, there must be a Joint Venture Company (JVC) established to manage the gold mining assets, who then should be the guarantor of the incentives or waivers? Is it BGC or the joint venture company (JVC)?

For example, how can BGC be a guarantor of waiver from listing? He should know that BGC is not registered in Tanzania and it is only the JVC that can be granted such a waiver, if at all.

What is intriguing me is not what Honourable Zitto is saying, but the timing of his attack(s). Negotiations are discreet and employ many tools.

While on the one hand, the negotiations between the BGC and the government of Tanzania have stalled in order to give room for the former to comply with the latter requirement, on the other hand, BGC is facing hard negotiations with Acacia Plc and the minority shareholders.

The negotiations have reached a very delicate point, which may unhinge if things are not understood in their correct context. One important issue is the acceptability of the new arrangement by the ordinary Tanzanians.

This is critical if the minority shareholders are to accept the exchange of their shares for BGC’s shares in the envisaged share buy-out arrangement.

Is Honourable Zitto praying for the disruption and closure of the Acacia takeover by sending fears that at all is not well and the troubles of Acacia will befall the new arrangement?

He is deliberately reading things out of their correct contexts. The question is why? Is it true that Honourable Zitto does not know that no agreement has been signed yet?

Is it true that Honourable Zitto is not aware of the delicate issues that hung upon the Barrick – Acacia negotiations? Why is it that Honourable Zitto, an MP can not countercheck his facts with the authorities?

As a keen follower of what is unfolding, I am aware that the Government Negotiation Team has not yet submitted its proposals to the State for consideration and decision.

Would Honourable Zitto have not been made aware of this fact, if he had asked? Apparently this is an open secret after the government had made it clear through the official spokesperson that come rain come sun, there would be no deal if Acacia is in any manner whatsoever involved. Is Honourable Zitto not aware that Acacia Plc is not yet delisted and thus no deal is possible with the government?

My position and question to Honourable Zitto is that, if your aim is to derail the finalization of the Acacia takeover by BGC, whose interests are you serving?

The writer, Johnson Dube, is an expert in extractive industry based in Durban, South Africa.

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Author: Johnson Dube

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