Thursday, 29 May 2014
NSSF TARGETS SMALL-SCALE MINERS
Tanzania's National Social Security Fund plans to cover small-scale miners, as it gradually expands its scope to include most of the workers engaged in informal business.
This is the second target outside the traditional brackets to be covered by the public pension fund in two-years. Last year, it incorporated farmers.
NSSF director of operations Crescentius Magori said they would include about 400,000 small-scale miners in the next fiscal year.
Going by the NSSF’s minimum contribution of Tsh50,000 ($31.25) per person per month for miners, the scheme will rake in Tsh240 billion ($150 million) per annum, should the entity reach out to all targeted miners.
“NSSF’s idea is to unlock the small scale miners’ economic potential not only by covering them, but also offering them equipment loans to help transform their undertakings” Mr Magori explained.
Small-scale mining activities which take place in many regions of the country, play a significant role both as a direct source of employment and in generating revenues for the rural economy.
Official estimates show that there are 1.5 million artisans and small-scale miners in Tanzania, with the government saying that a small-scale miner generates at least three indirect jobs for each individual involved.
Gold and gemstones are the most widely extracted minerals by small-scale miners. The diamond-mining sector has also been growing in recent years.
Africa’s fourth-largest gold producer earned $1.73 billion in 2013, up from $932.4 million in 2008 from metals, including all large, medium and small-scale mining operations.
A United Nations Environment Programme report of 2012 says artisanal and small-scale gold mining accounts for nearly 10 per cent of Tanzania’s gold production, though most of their activities are currently informal.
A senior social security and risk management lecturer at the Institute of Finance Management in Dar es Salaam, Dr Abdallah Saqware said the NSSF strategy comes at an opportune moment as small-scale miners face a lot of risks in their undertakings.
“NSSF is eyeing the right group at the right time as we all know that small scale miners lack social welfare protection, health insurance and even mining equipment,” Dr Saqware said.
To ensure sustainability, NSSF director for investments Yacub Kigandullah said that plans are afoot to build an ultra-modern-mineral resources market in Arusha. The market will be a one-stop-centre for all minerals where dealers and potential buyers from all over the world would be meeting to do the business.
“From July, NSSF will commence a study to establish the market requirements, a suitable site for the market and the mineral dealers’ capacity to pay rent,” he said.
Traditionally, NSSF, the country’s largest state-run-pension fund, has been targeting government securities, bank deposits, equities, corporate bonds and real estate.
NSSF’s appetite into minerals is a move suggesting a historic shift in Fund’s investment strategy.