President Mkapa has set up a committee of enquiry to investigate allegations of money laundering for Al Qaeda at the Mererani Tanzanite mine near Arusha. The committee was formed after a meeting, attended by Energy and Minerals Minister Edgar Maokola-Majogo, in the USA to discuss the problem. The Minister is reported to have accused the South African firm African Gem Resources (AFGEM) which has been given a large mining concession at Mererani, of trying to sabotage its neighbouring small-scale miners, by inviting the Wall Street Journal to investigate the alleged link with Al Qaeda. (See TA No 71). Things then went wrong as the price of Tanzanite in its main market in America dropped some 50%. AFGEM protested its innocence. It said it had never invited a journalist from the Wall Street Journal to come and write on the alleged connection of the Tanzanite trade with al-Qaida. On 28 February the Minister was quoted as saying that AFGEM had given bad publicity to Tanzanite with the aim of sabotaging small-scale miners but the whole thing had boomeranged when AFGEM found it difficult to sell its gems. AFGEM said it had communicated with the journalist but with the intention of discouraging him from publishing his story.

In another attempt to deal with suspected Al Qaeda links the Bank of Tanzania was reported in the press to have frozen several accounts on suspicion that they were being used to fund terrorism. The East African reported (25th February) that an extensive investigation by US intelligence agencies did not find evidence of current Al Qaeda involvement in Tanzanian smuggling. Minister Mr Maokola Majogo has now introduced new measures including making Mererani a controlled area, regular inspection of licences, working towards a conducive tax regime, setting up export processing zones and the introduction of a cross sectional Tanzanite board.