Inside Business Africa INSIDE BUSINESS AFRICA AUGUST 16 2017 1cdr - Page 6

I N S I D E B U S I N E S S A F R I C A Africa Report July 30 - August 13, 2017 Magufuli’s high stake gamble When Tanzania’s President John Magufuli implemented an export ban on gold and copper ore in March, many in the country applauded the leader for taking his war on corruption and waste to the mining industry. T anzania is Africa’s fourth biggest submit to a new regulatory regime. gold producer and the mineral Magufuli has even gone as far as to accounts for $1.4bn per year in exports. threaten to shut down all gold mines in “The Bulldozer” – so called because of the country if mining companies delay his time as minister of works, where he talks with his government aimed at drove a programme to build roads resolving allegations of tax evasion. By taking on the mining industry, the across the country – accused mining companies in the country of not paying president hopes to develop domestic their fair share because of favourable industries. However, analysts are sceptical that the moves will have the contracts. The accusation was, in the minds of desired effect. “Investors have reacted many in the East African nation, very negatively to the new mining verified when a committee appointed reforms,” says Emma Gordon, senior by the president claimed that Acacia Africa analyst at risk management Mining, a subsidiary of Canadian company Verisk Maplecroft. “They feel mining company Barrick Gold, had they are very anti-business and there are understated its mineral exports over concerns about contract sanctity and export bans.” several years by billions of dollars. Magufuli is undertaking a high-stakes Acacia, which was fined $190bn by Tanzanian authorities this month, has gamble which could put off foreign denied any wrongdoing and is both investors, she adds. The gamble, if it negotiating with the government and goes wrong, could cost the country exploring legal avenues. The export ban 3.7% of its GDP and billions of dollars has already affected the operations of the major foreign-owned mining companies of mining companies, including AngloGold Ashanti and Petra D i a m o n d s, a n d t h e security of 36,200 jobs is under threat at Acacia’s three g old mines in Bulyanhulu, Buzwagi and North Mara, the company says. Following the disagreement with the mining company, the c o u n t r y ’s N a t i o n a l Assembly fast-tracked two new controversial mining laws, which allow Tanzania to cancel and renegotiate contracts with mining and energy companies, force all operations to trade on the Dar es Salaam Stock Exchange (DSE) and Tanzania’s President John Magufuli 6 u t q in revenues. Gold, in particular, accounts for 90% of Tanzania’s minerals export. The East African nation also exports iron ore, diamonds, gemstones, coal and u r a n i u m . U n d e r T a n z a n i a ’s Development Vision 2025 plan, the country aims for the mining sector to account for 10% of the GDP. However, the gamble the president is taking is for the national interest, according to Donald Mmari, executive director of institution Research on Poverty Alleviation (REPOA). “[The reforms] are a genuine and legitimate attempt at ensuring that Tanzania gets the best deal from the country’s natural resources. Every country in the world wants to maximise the amount they collect through natural resources,” he says. “In Norway, for example, oil contracts are scrutinised by the country’s parliament to make sure that they are signing the best deal. I think it’s only fair that Tanzania does the same.” Although many other Tanzanians approve of the steps being taken by the president there are still concerns that investors will be scared off funding projects in the country due to the “anti-business” climate. However, Mmari believes the foreign-owned companies will remain in the country. “I think the mining companies will only [withdraw from the country] if the new mining and energy reforms affect the bottom line so much that the business doesn’t make sense,” he says. “But even then, I don’t think they will withdraw f r o m Ta n z a n i a . Instead they will look to cut costs.” The confrontation with the mining sector I N S I D E B U S I N E S S A F R I C A Organisation & People Professional Interview July 30 - August 13, 2017 Why did autonomy make such a difference? Because micromanagement, the opposite of autonomy and the default behavior for many managers, puts people in a threatened state. The resulting feelings of fear and anxiety, even when people consciously choose to disregard them, interfere with performance. Specifically, a reduction in autonomy is experienced by the brain in much the same way as a physical attack. This "fight- or-flight" reaction, triggered when a perceived threat activates a brain region called the amygdala, includes muscle contractions, the release of hormones, and other autonomic activity that makes people reactive: They are now attuned to threat and assault, and primed to respond quickly and emotionally. An ever-growing body of research, summarized by neuroscientist Christine Cox of New York University, has found that when this fight-or-flight reaction kicks in, even if there is no visible response, productivity falls and the quality of decisions is diminished. 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