Controversy Surrounds Tanzania-South Korea Deals: Balancing Development and Sovereignty

By Adonis Byemelwa

President Samia Suluhu Hassan of Tanzania has expressed unwavering confidence in the just completed Korea-Africa Summit, heralding it as a pivotal event that will unlock new avenues for economic and technological collaboration, driving development across Africa.

In a statement released on June 4^th,2024 President Samia declared, "The Korea-Africa Summit is set to forge robust partnerships that will not only enhance economic ties but also spur technological advancements crucial for Africa's growth."

Highlighting the summit's strategic importance, she noted, "This summit presents a unique opportunity to build cooperation aimed at diversified and sustainable development. Our focus on innovative economic and social initiatives will be a game-changer for the continent."

President Samia also emphasized Tanzania's commitment to strengthening ties with Korea in key sectors, particularly mineral exploration.

"We invite Korean companies to deepen their engagement in Tanzania's mining sector, focusing on strategic mineral exploration and research," she said. Known for her leadership in promoting clean energy, President Samia reiterated the continent's commitment to sustainability.

"Investing in clean energy is vital for reducing environmental pollution and mitigating ecological damage," she stressed. During her visit, President Samia held productive discussions with KO

ICA President Mr. B.W. Chang Won Sam, focusing on advancing cooperative projects. "Our partnership with KOICA is instrumental in improving water, education, and healthcare services across Tanzania," she said.

KOICA is currently implementing ten projects aimed at enhancing water supply and healthcare in both urban and rural areas, including Dodoma and Arusha.

Looking ahead, President Samia joined other African and Korean leaders at the summit, where expanding bilateral and multilateral relations was high on the agenda. This summit also served as a vital forum for Tanzanians living abroad to contribute to their nation's progress.

Adding to the significance of the summit, the Government of Tanzania has secured a loan from the Export-Import Bank of Korea amounting to USD 163.6 million (approximately TZS 422.16 billion) for the construction of Binguni Referral Hospital in Zanzibar.

The loan agreement was signed in Seoul on June 5, 2024, by Natu Mwamba, the Permanent Secretary of the Ministry of Finance, on behalf of the Government of Tanzania, and Hwang Kiyeon, Executive Director of the Exim Bank.

The signing was witnessed by Saada Mkuya, Minister of State, President’s Office, Finance, and Planning of Zanzibar, who remarked, "The construction of this hospital will enhance the availability of quality medical services for the people of Zanzibar." This loan is part of the USD 2.5 billion commitment from the South Korean government.

Despite the optimism from the government, the announcement has sparked a wave of controversy. Prominent figures such as Chadema cadre Martin Maranja, renowned activist Ansbert Ngurumo, and Maria Sarungi have voiced their concerns, repudiating the agreements.

 Martin Maranja criticised the government for what he perceived as a sell-out of national resources. "The government's decision to accept these loans and sign these agreements without adequate public consultation is alarming. It raises questions about whose interests are being prioritized," Maranja said.

Ansbert Ngurumo echoed these sentiments, warning of the potential long-term consequences of such deals. "These agreements, under the guise of concessional loans, may end up compromising Tanzania's sovereignty over its natural resources. We must ensure that these deals are transparent and truly beneficial to the Tanzanian people," Ngurumo stated.

Maria Sarungi has been vocal on social media, using her hashtag campaign to draw attention to the issue. "It's crucial for Tanzanians to demand full transparency on these deals. We cannot allow our mineral wealth to be exploited without clear, mutual benefits," she posted.

The controversy was further fueled by a report from VOA Swahili, suggesting that Tanzania had essentially given away mineral resources and maritime territory to Korea as part of the loan agreement. The report caused a public outcry, with many Tanzanians accusing the government of relinquishing national assets.

In response, the government swiftly issued a clarification, compelling VOA Swahili to amend its headline and retract the suggestion that Tanzania had forfeited its minerals to Korea.

Meanwhile, Korean media outlets such as Arirang TV reported that the agreements assured South Korea of a stable supply of key minerals from Tanzania.

This has raised further concerns about the nature of these deals. Tanzania's The Citizen newspaper provided additional details, indicating that the cooperation would involve research, mining, and value addition for strategic minerals such as graphite, nickel, and lithium.

These divergent narratives have left many Tanzanians, like the author of this think piece compelled to dig deeper into the details of these agreements.

As a concerned citizen of the United Republic, the author believes it's essential to recognize that all of Tanzania's mineral wealth belongs to the public—not just the government but every bonafide citizen

This understanding necessitates that any actions regarding these minerals must prioritize the collective interest of Tanzanians. Ministerial assurances suggest that Tanzania intends to leverage its strategic mineral resources domestically, seeking investors to mine, refine, and ultimately produce goods like car batteries within the country’s borders.

 The government's objective appears to be the export of not just raw minerals but added value through local processing. However, whether these agreements with South Korea will pave the way for Tanzania to become a producer of high-value products like car batteries remains to be seen.

While VOA Swahili's assertions about Tanzania relinquishing its mineral rights to Korea have been refuted, Korean outlets such as Arirang TV assert that Tanzania has committed to providing a stable supply of key minerals to the East Asian nation.

This has led to further scrutiny and debate among Tanzanians regarding the true nature and benefits of these agreements. Former Tanzanian President Jakaya Kikwete once urged his people to use common sense and not be swayed by rhetoric.

In the current context, Tanzanians must maintain clarity amid confusion. International collaborations are not inherently negative; the devil, as they say, is in the details of the agreements. Ensuring transparency in their implementation is imperative.

As Tanzania and South Korea sign preliminary agreements, the existing but unratified Bilateral Investment Treaty (BIT) with South Korea remains a critical point of contention. Although not yet enforceable, this BIT could significantly influence investment protections. The pivotal question is how Korean investments in Tanzania's strategic minerals will unfold amidst this uncertainty.

Tanzanians must remain vigilant and demand transparency from their government. The path forward must ensure that the nation’s resources are managed to prioritize the welfare of its citizens, fostering both economic growth and sustainable development.

 Despite being one of the least developed countries, with a per capita income of around $1,100, Tanzania has made notable efforts to attract foreign investment to spur economic growth. However, implementing the World Trade Organization Multilateral Agreement on Investment (WTO MAI) has proven challenging.

Tanzania grapples with a weak legal framework for foreign direct investment. As Linford Mwemezi, a Master's Degree holder in Law from Kampala International University, notes, "Although the Investment Act of 2018 was enacted to promote investment, the legal infrastructure still falls short in protecting investor rights, ensuring transparency, and enforcing contracts." Other barriers include inadequate infrastructure, corruption, and a lack of capacity.

There is ambiguity surrounding the potential benefits of the WTO MAI for Tanzania’s economy and its ability to meet developmental needs. While foreign investment can generate economic benefits, such as job creation and technology transfer, concerns linger about the equitable distribution of these benefits and whether investments will address pressing social and environmental issues.