FRIDAY July 28, 2023
By Deus Bugaywa
Tranquility News Correspondent, Tanzania
As Tanzania gears up to become an industrialised middle-income country by 2025, the Buzwagi Gold Mine’s closure adds bang on the buck.
The ecologically friendly closure of the mine paved the way for establishment of Buzwagi Special Economic Zone (BSEZ), turning the mined space into a business zone to generate similar benefits with which the mine used to provide the local municipality and its surrounding communities in forms of taxes, fees, and jobs.
At its peak, Buzwagi, which was the second largest operating gold mine in Tanzania, employing over 3,000 people, was officially closed in 2021. According to Barrick’s president and CEO Mark Bristow, the BSEZ is put in place to ensure Buzwagi remains an economic powerhouse for local communities and Tanzania at large.
“The feasibility study for the BSEZ showed it has the potential for creating approximately 3,200 jobs and generating over $150,000 a year in service levies in a short-term, as much as $1.3 million in a long-term, and fetching $4.5 million Pay As You Earn in a short-term and more than $18 million in a long-term,” said Bristow.
Buzwagi Gold Mine was an economic powerhouse for Tanzania’s Shinyanga Region for nearly 15 years, but its operational life ended in July 2021, with the mine being officially closed in July 2022.
“In 2022, we joined forces with Kahama Municipality to establish teams for driving the planning, preparation, and development of the Special Economic Zone,” Bristow adds.
The implementation team was tasked to tackle financial, logistics and operational hurdles of transformation, with another technical team focusing on driving interest from local, regional and global businesses, and a steering committee taking overall responsibility for the project.
“We also invited representatives from a range of companies and potential investors to visit the site and explore options, and have received commitments from two large firms and interest from many more.
“We’ve also worked alongside the municipality to build a new airport terminal in a bid to boost the number of flights to other hubs in the region to expedite ease of access,” Bristow narrates.
Export Processing Zones Authority (EPZA) Director of Investment Promotion and Facilitation James Maziku, says the designed BSEZ will be the industrial, logistics and trading hub for Lake and Western Zones and the neighbouring hinterland countries of Rwanda, Burundi, Uganda and Eastern Democratic Republic of Congo.
According to him, Kahama Municipality has already applied for a license for the area to be declared a special economic zone and processes are in final stages.
Maziku says Buzwagi has an advantage other designated special economic zones lack, as it has necessary infrastructure for the establishment of the zone and its geographic location gives it the potential for becoming a trading, industrial and logistic hub in the Great Lakes Region.
The BSEZ strategic location creates a perfect pattern of logistics hub spokes, one of the most critical success factors for any such hub. Buzwagi is just 40 kilometres away from Isaka Dry Port which connects it to Dar es Salaam Port through the under-construction Standard Gauge Railway. It is situated along the Isaka–Rusumo Highway, with Mwendakulima Airstrip positioned at its door steps.
Buzwagi has the potential for accommodating storage, warehousing and materials handling facilities for steady stream of products to be supplied by manufacturers.
While a manufacturer needs to operate at peak efficiency, consumers tend not to demand goods at the same supply rate, resulting into an imbalance between supply, which is steady, and demand, which can be unpredictable.
A survey by The Tranquility News team can affirm that the BSEZ has the potential for offering competitive packaging and unitisation, inventory, transport, information and control, jointly simplifying logistics activities and processes undertaken in the supply chain.
According to Maziku, the BSEZ has the potential for offering labour, access to raw materials and markets, given its geographic location. It already has reliable power supply, land, and various transport modes for hauling finished goods, and raw materials, including railways and roadways.
“These readily available factors make Buzwagi Special Economic Zone very competitive that it will be the great industrial, trading and logistics hub in the region,” Maziku says.
Tanzania offers generous fiscal incentives under the Export Processing Zone/Special Economic Zone (EPZ/SEZ) schemes to attract both Foreign Direct Investments (FDIs) and Domestic Direct Investments (DDIs).
For an investor to qualify under Special Economic Zone Scheme, the investment must be new, annual export turnover should not be less than $5 million for FDIs and US$1 million for DDIs.
There must also be adequate environmental protection systems, utilisation of modern production process and new machinery and investments must only be located in SEZ industrial parksΩ