By DAMAS MAKANGALE, DAR ES SALAAM, TANZANIA
The World Bank group, Multilateral Investment Guarantee
Agency (MIGA) has insured nearly $185 million in private sector investment into
Tanzania to develop areas of priorities such as infrastructure, energy and
mining.
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| Vice President and Chief Operating Officer, Michael Wormser. |
Speaking to reporters in a news conference today in Dar
es Salaam, MIGA, Vice President and Chief Operating Officer, Michael Wormser
said that the aim of the grant is to stimulate economic growth and job creation
in Tanzania.
“I look forward to talk with the government and the private
sector to see how MIGA can help mobilize private capital to create jobs and
improve infrastructure in particular in transportation, energy and
agribusiness,” he said.
He said that a new MIGA guarantee would help tap the
potential of Tanzania’s underdeveloped mining sector, helping the country to
diversify its economy by also promoting social wellbeing of the people.
Wormser added that in fiscal, 2001, Barrick Gold Corporation
of Canada received a $56.25 million MIGA guarantee for its investment in an
underground gold, silver and copper mine in Tanzania.
He further said that MIGA mission is to promote Foreign
Direct Investment (FDI) into developing countries to support economic growth,
reduce poverty, and improve people’s lives.
“We do this by providing political risk insurance (guarantee)
against certain noncommercial risks to investments in developing countries, as
well as by providing dispute resolution services for guaranteed investments,”
“We also conduct research and share knowledge as part of our
mandate to support foreign direct investment into emerging markets,” he
underscored.
Wormser said that they have taken on board the issue of sound
environmental performance, sustainability with respect of natural resource
management and social responsibility are critical to an investment’s success
and its contribution to the host country’s development.
He said that in the few months to come MIGA will inject
nearly $60 million to support the agricultural sector through silver sand
project to ensure that the Tanzanians are transforming agricultural sector into
green revolution.
Wormer said that MIGA has developed political risk insurance
products especially designed to target mining related investor concerns include
the revocation of leases, tariff, regulatory and credit risks arising from
breach of government contracts as well as dispute related to take off
agreements and exploitations rights.
He noted that the risks associated with the mining sector are
complex and require careful consideration by potential sponsors and leaders.
According to him mining sites are often in remote or
political unstable parts of the world, adding to the cost and uncertainties
associated with extractive industries.
He noted that civil disturbances and conflict can disrupt
normal operations and social and environmental concerns are prominent and weak
macroeconomic environments and inadequate legal and regulatory frameworks can
invite unwarranted government intervention.
Wormer noted that the agency helps countries define and
implement strategies to promote investment through technical assistance
services managed by the investment climate World Bank group.
Since its inception in 1998, MIGA has issued guarantee
contracts totaling $1.6 billion for projects in the mining sector. The mining
portfolio currently stands $240 million, accounting for 2% of MIGA’s
outstanding gross portfolio.
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