lets talk about financing To really understand Volts new and...

lets talk about financing

To really understand Volts new and improved potential, you have to unstandardised Tanzanian politics. To speculate on where funding comes from is to understand the common difference between the way Western and Chinese money operates in Africa.

Bit of a deep dive.

As we all know Africa hasn’t had the easiest ride, the 90s tell stories of war, disease and debt. The early 2000s were meant to be a healing period for Africa. The debt slowed this process.

The nature of the western business’s operating in Africa was to pay royalties and tax in Africa but to send all profits back to the west. These companies often grew but, the growth existed almost entirely on western stock exchanges. African Politicians understandably became pessimistic of this kind of business. Companies making 100s of millions in profits and then paying single digit percentages of those profits in royalties and tax.

The Chinese style was more summarised by giving an upfront loan for the sale of an underlined amount of minerals. This enabled Africa to not only pay off their debt but also build the infrastructure to become the economy that they have the potential to be. The western media like to refer to the Chinese method as neo colonialism, however, debatably this is Africa’s preference.

In 2015 John Magufuli become President of Tanzania. A stern and arguably aristocratic leader. He heavily opposed the mining industry and his agenda was to bring the profits home, fair enough. His technique was questionable.

By 2017 Magufuli had delivered revised mining laws and regulations increasing gold royalties from 4 percent to 6 percent. Further, he introduced 16 percent government ownership of mining companies’ stock without compensation, with the opportunity to purchase a further 34 percent ownership. Exportation of concentrates and unprocessed minerals was banned requiring that value addition processing be done in Tanzania.

Ask yourself, if you had the money for funding a company, would you fund a company in Tanzania under these conditions?…

And they didn’t, funding in the mining sector changed.

John Magufuli died in 2021, rumour has it, it was covid.

Samia Suluhu Hassan is Tanzania’s new President. Although some of the conditions were relaxed in 2019, before her time, she is further pushing the incentives for foreign investors.

When you hear “Tanzania is open for business” understand that there is meaning to this.

Africa has finally found the key to its potential. Globalisation is being challenged, America, China and Europe want to take the battery supply sector for themselves. Let’s see where they go to find those minerals.