Magufuli wants central bank to buy gold, stabilize currency

Tanzanian President John Magufuli. [Photo: Courtesy]

DAR ES SALAAM- Tanzanian President John Magufuli said on Wednesday the central bank should start buying the country’s gold to curb smuggling and build reserves to stabilise the currency.

On Tuesday, Tanzania named its third mining minister since Magufuli was elected in 2015. The mining sector contributes around 4.8 percent of GDP, the government said last year, but the value of many mining projects in Tanzania have plummeted amid repeated government interventions.

“It is impossible to see gold is stolen everywhere... governor you should work on this,” Magufuli said, referring to the central bank governor, during the swearing in of the newly appointed mining minister and other officials.

“Bank of Tanzania should put the money there (in gold) instead of reserving the dollars alone. We should reserve dollars and gold together.”

It wasn’t clear whether Magufuli intended to buy all the country’s gold production, thereby bringing the artisanal gold market under government control. He asked the mining and finance ministries and the central bank to come up with a plan.

A prolonged spat between the government and gold producer Acacia over a $190 billion tax bill has severely limited the London-listed company’s operations in the East African nation. In 2017, the government passed laws to reform the mining sector that the industry complained would be costly and onerous.

Magufuli also ordered new mining minister Dotto Biteko to establish centres in all mineral rich regions to control the artisanal mineral market, as mandated by the 2017 laws.

“Within the (2017) law I am sure there are sections about mineral centres, how many have been established? Where are they?” he asked. “If the law was passed by the parliament why has the ministry failed to enact the regulations?”

The centres are designed to limit smuggling. Last week, police arrested suspects who tried to transport minerals worth 30 billion Tanzanian shillings ($13 million) in the northern region of Mwanza, he said.

Magufuli warned Biteko he will be sacked if he failed to deliver and said that he will continue to make changes if officials fail to perform.

“One day I (may) appoint myself the minister of minerals,” he said, prompting laughter from the audience.