Zitto Kabwe: Whose interests are you serving?
By Johnson Dube, Durban, S.A. – I have been following up the tussle between the Government of Tanzania and Acacia Plc ever since it began more than two years ago. I am fascinated by the emerging African patriotism.
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.
Recently I have been reading communications from one Mr. Zitto, a Tanzanian Member of Parliament (MP). I am informed he is a vocal opposition MP who devotes his time, among other arears, on mining sector reforms. But what I see, he is on a campaign to derail the efforts by Barrick to takeover Acacia Plc and satisfy the pre-condition demanded by the Government.
As a keen follower of the developments 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) manage to takeover and delist Acacia Plc, there will be no agreement concluded.
The Government made us very proud. The clear message is that Acacia be dismantled to pave way for a new company jointly owned by BGC and the Government to be formed. 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 that were previously under the management of Acacia Plc. It means, if there are any special treatment or incentives, they will be granted to the jointly owned company.
The joint venture company needs to be assured of a take-off that is free of disabling compliances. This makes clear business sense. What is important is to see the kind of safeguards the Government will have in place. All of us are keen to see the agreements and the terms.
It is interesting that Honourable Zitto is launching a scathing attack with conclusions that the Government has already concluded the agreements with BGC. In arrangements of this kind there must be several agreements. All these need to be seen in order to understand how the Government has fared.
It is interesting to note that Honourable Zitto is attacking tax incentives purportedly granted to BGC. My understanding is that tax incentives can only be granted under Government Notices. These cannot be made without having agreements in place. If the Government has clearly expressed the position that there must be a joint venture company established to manage the gold mining assets, who then should be the grantee of the incentives or waivers?
Is it BGC or the joint venture company (JVC)? For example, how can BGC be a grantee of waiver from listing? BGC is not registered in Tanzania. 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. Negotiations are discreet and employ many tools. While on the one hand, the negotiations between BGC and the Government have stalled in order to give room to BGC to comply with the Government 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 aiming at disrupting the closure of the Acacia takeover by sending fears that 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 could 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 Government 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 will 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 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 is an expert in extractive industry based in Durban, South Africa.
