Tanzania's Future Shines Bright with Kabanga Nickel Project Investment

 This is a great investment and I think when you in in for Tanzania, especially when you try to reflect historical context where Tanzania macroeconomics and fundamentals were at this juncture. So Tanzania FDI had declined in the past, probably about 10 years or about seven. We had two billion net FDI coming in Tanzania in 2013 and that went down to one billion. That's a decline in FDI in 2019 and certainly when you look at that you would say the macroeconomic and also the investment that most vendors now are not very conducive and things are turning around now so and that's certainly shyed away some foreign investors. So if you could look at what happened in the last five years and certainly people related to the regime that certainly have changed the hands in the sense that we saw that the snow GDP had declined and we were certainly going around seven percent and then we started the nose diving in 2018 somewhere around three percent last year and so beside the global economic slowdown, Tanzania had the intenacious. First of all the environment, the environment at most fair wasn't very good. The private sector was faced a lot of challenges in terms of acceptance by the governments. We saw that bilateral multilateral relationship were impaired. We had the situation where the World Bank also had declined funding to Tanzania but also there were I think more than at least the three multinationalists had tried to go to international tribunals to protect their investment in Tanzania and also their famous barracks and extractive industry issues with the barracks and Akasha in Tanzania which certainly kind of put a negative indicators in terms of investment in Tanzania. So we had all these issues doing business challenges that certainly shyed away investment in our investment and therefore then the change of regime and then we see there was also a big issue in the extractive industries. They changed in the mining act in Tanzania and that was a major one for foreign direct investment whereby you couldn't have investors wouldn't we're not allowed to have independent or foreign arbitrations and also the freakier at interestee requirements for the government to be able to take in equity without paying but also the issues around local contents and other regulatory issues that emerged. That certainly, in addition to going to look at that as a negative trends towards FDI and mining sector require huge investments. The local economy can actually accommodate that. So but again we saw the government had gone into the drawing boards to try to look at some of those policies and open up. So but also when you look at the investor himself, investors actually did everything fine from Africa I think and looking at low-risk countries if you look at DHP in particular and with the last exit I think was in Ghana I think yeah but coming back to Tanzania which was a red flagged country it's quite a it's quite phenomena and it's really interesting for for the current president Mama Samir Salud. Joseph I'll ask you more about the the current state of investment if you still have time but at the moment Kabang is considered the world's largest development ready deposit in in in Tanzania. What does that exactly mean for Tanzania and how does the countries tend to benefit from this investment? Okay so the Kabang I think the importance of the Kabang are Tanzania is firstly you're looking at the FDI much needed FDI Tanzania that will come with the projects. I think the project is about think is about 0.67 billion dollars. Leave along the first French the 50 million there will be a father for the million dollars and we're looking at also where the government of Tanzania wanted to reform in the mining sector was a beneficiation of the mining sector and this is the top big hot topic in Africa in terms of value addition and beneficiation. So Kabang are they going to set up a meta planting Tanzania so they can actually develop product locally so that's going to create employment. So of thousands employment opportunities that directly and I think and other indirect and induced employment which is expected to be in thousands of of of and also inflows in terms of foreign currency much needed in the country that's going to come through. The government has certainly 16% free credit interest with the with a potential to increase their free credit interest about 50% based on the mining act. So certainly the investor has to recover investment before even can be paid but it's going to go towards helping are much needed for a reserve but in terms of in terms of the attractiveness of Tanzania as I mentioned BHP looked at by international investors risk adverse but coming to Tanzania will also provide a good will for Tanzania and we will see more interest coming in from other investors in the country. So supply chain and value addition in Tanzania so businesses in Tanzania especially in terms of local content they have to be geared up to tap on the opportunities that come through. Certainly Tanzania need to partner local entrepreneurs in Tanzania have to look at partnership with the multinational who have capacity technical know how in capital in order to tap into this opportunity. It's a longer term opportunity 30 years of opportunity with these investments likely to go to almost a billion dollar I think of a medium 10 to long 10.

Anglo-Australian mining giant, BHP, recently announced that it will invest at least $50 million in a huge nickel project in Tanzania. The country is expected to cash in on the project in which the government has a minority stake. Joseph Sheffu, Managing Partner at Ernst & Young Tanzania spoke to CNBC Africa’s Julius Bizimungu for more. 

Tanzania to cash in on Kabanga nickel project 

Anglo-Australian mining giant, BHP, recently announced that it will invest at least $50 million in a huge nickel project in Tanzania. 

Tanzania to cash in on Kabanga nickel project

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Tanzania to cash in on Kabanga nickel project

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