By ADAM IHUCHA -- Tanzania’s
flagship 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.
Significant
role
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.
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