‘Makinikia’ and economic liberation: The untold story – 6

As chronicled previously, the World Bank assisted programmes to revive the mining industry in Tanzania though brought substantive achievements, there emerged many challenges overtime.

From the beginning, the reforms were confronted by stiff resistance from the public believing that the leadership has abandoned its course for fighting the nation’s economic war.

The public demanded more immediate benefits, claiming that the regime was selling out the country’s mineral wealth to investors whom they termed imperialists. These allegations would resurface and come to pass during the Makinikia Saga as would be explained in the coming series of articles.

In response to such claims, the President, in many occasions was forced to reiterate his mission of making mining the engine for economic growth by pushing his drive to invite foreign direct investment to attract technology, capital, skills and experience to exploit mineral resources for the benefit of the country and improving people’s lives.

In a nutshell, the efforts undertaken by the Third Phase Government to reform the mining industry in Tanzania by creating and sustaining a conducive investment environment faced sustained challenges and pitfalls that needed a constant beat of a fight.

By the year 2005; the end of the Third Phase era, the negative public perception on mining had become one of the main impediments that haunted the mining industry development in Tanzania.

This widespread public outcry demanded more immediate local benefits and wanted more reforms for equitable mining industry investment.

The demands asserted that foreign investment was bringing minimum local benefits due to several apparent reasons including: increased conflicts between large scale mining projects and communities around the mines including artisanal and small scale miners (ASM); low capacity of the Government to administer and regulate the sector; low level of value addition of minerals; and unsatisfactory participation of the local business community, individuals and the government in mining ventures.

The fact that large scale mining projects are capital intensive, technologically demanding and take a very long time to recoup profits could not be easily understood by the citizenry and therefore presented a very huge challenge to mining industry reforms in the country.

Although the Third Phase Government mining reforms were blotted by a widespread public outcry for more benefits from the mining industry revenues and local participation but these reform efforts in a challenging neo-colonial global economic system stood up as a firm foundation of the development of the mining industry in Tanzania that will stand the test of time.

The effort outcomes can be modified overtime to bring more local economic benefit to the country and its people as was one time echoed by the President that: “…we cannot pretend that we are an isolated cherubic country in this globalised economy, we need to enter and dance the tune as we adapt when pushing the agenda for reform…”

The dawn of the Fourth Phase Government in 2005 was confronted by these aforementioned negative perceptions from the Tanzanian public and the government had to take immediate actions to attend to the demands of the people.

The regime was determined to overcome some of the challenges encountered by the outgoing regime and forge ahead in developing the nation’s economy.

The President, having appropriately been advised, ordered a comprehensive review mission that reviewed the mining industry in its totality.

A review team known as the Presidential Mining Industry Review Committee was formed by the President in 2007. The mandate of the committee was to collect a wide range of views from within and outside the country on the best way forward for improving the mining industry in Tanzania.

It was at his time the author became personally involved in the review as one of the senior managers at the Ministry of Energy and Minerals giving him firsthand information on how challenging the management of the mining industry in a third world setting actually was.