‘Makinikia’ and economic liberation: The untold story – 5

As explained last week, efforts to emancipate the country from economic bondage took a daring and deeper turn of seeking help from the very people who were responsible in creating a neo-colonial economic system that ensured mineral raw materials from Africa were to be exported abroad with or without the necessary local economic value chain activities. It was under this scenario that a World Bank assisted Tanzania - Mineral Sector Development Technical Assistance Project was designed and implemented.

The state of the World Economic Order blighted with globalization was indeed pregnant with the neo-colonial elements of old and made the war against economic dependence more complicated. Leaders had to once again figure out how to best fight this war and win. It needed more care and new type of arsenal supplemented with a new dual character of being as caning as a wolf and as humble as a lamb.

Therefore, the Mineral Policy of Tanzania of 1997, the Mining Act of 1998 and the Mining Regulations of 2000 that were designed under the World Bank assisted project were a drastic measure intended to harbour a private sector led Mining Industry in which the Government became a regulator, promoter, service provider and facilitator with minimum discretionary powers in licensing to guarantee security of tenure. The policy and law instituted Mining Development Agreements to stabilized Fiscal Regime and guaranteed long term investment gains.

However, these new policies and statutes needed rigorous promotion of the mining investment opportunities to foreign and local investors inviting them to invest in the country as most investors may still have been doubting if a socialist country was indeed ready for this drastic transformation of the mining industry in Tanzania.

The President of the Third Phase Government took up a personal campaign by conducting a dialogue with international Chief Executive Officers of major mining companies of the world in 1998 and in  November 2001 at the Annual General Meeting of the South African Chamber of Mines in Johannesburg South Africa, he told investors that the Government of Tanzania was now ready to partner with the world to enable technology, capital, skills and experience to come to Tanzania to explore the abundant mineral resources. The nation’s leader believed that direct foreign investment would generate enough revenue and other economic gains to help the nation fight poverty and was therefore inviting the world business fraternity to come and invest in Tanzania.

At this same time the country subscribed to several largest annual world mining conferences including the Mining Indaba of Cape Town, South Africa and the mining Developer’s PDAC Annual Conference in Toronto, Canada and attended these conferences annually to continue luring investors to come to Tanzania.

As a result of these efforts, among many notable developments during this period, the large-scale mining that had long closed in 1967 during the Arusha Declaration was revived once again in Tanzania. For seven consecutive years there was almost one large scale mine being commissioned as enumerated herein: Golden Pride (1998); Geita Gold Mine (2000); Mirerani tanzanite mine (2000), Bulyanhulu Gold Mine (2001); North Mara Gold Mine (2002); Buhemba Gold Mine (2003); Tulawaka Gold Mine (2005); and Buzwagi Gold Mine (2009).

With the resurfacing of large scale mining in Tanzania, the mining industry became the second fastest growing after tourism; an increasing contribution to the GDP from 0.2 per cent in 1998 to 2.7 per cent in 2009; and the cumulative total direct foreign investment (FDI) in the mining industry by 2005 was in excess of $3 billion. The increased gold production from large scale mining alone has brought a direct government revenue stream of over $100 million a year from royalties alone from a zero level and an increased direct employment in the large scale mining industry from 1,700 in 1998 to 13,000 workers in 2009.