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Tanzania’s Mineral Resources: A Path to Sustainable Development and Progressive Public Service Investment

Dar es Salaam, Tanzania - The Tanzanian government has been facing a declining trend in the size of its wage bill relative to GDP, from 6% to 5%, between FY 2016/17 and FY 2019/20. Additionally, the country’s public sector wage bill as a percentage of total government spending decreased by 4% (from 34% to 30%) during the same period.

Challenges in Tanzania’s Mining Sector

Experts say that this trend is a cause for concern, particularly in light of the significant revenues generated from the mining sector. In recent years, Tanzania has been grappling with issues related to illicit financial flows (IFFs), which have hindered the country’s ability to fully benefit from its mineral resources.

Recommendations

To address these challenges, experts recommend:

  • Strengthening national legal and policy frameworks for financial integrity
  • Building capacity within legislative committees to enforce financial transparency
  • Reforming global tax infrastructure
  • Maximizing benefits from critical minerals
  • Supporting extractive sector transparency

Tanzania’s Mining Sector Potential

According to a recent report by the Tanzania Extractive Industries Transparency Initiative (TEITI), the country’s mining sector has significant potential for economic growth and development. However, this potential is being hindered by policy gaps, supply chain governance risks, and investment and revenue management risks.

Curbing Illicit Financial Flows

To realize the opportunities offered by its mineral resources, Tanzania needs to take a holistic approach towards curbing IFFs and ensure proper governance of the sector. This requires:

  • Strengthening national legal and policy frameworks
  • Building capacity within legislative committees
  • Reforming global tax infrastructure

Maximizing Benefits from Critical Minerals

The country also needs to focus on maximizing benefits from critical minerals, such as graphite and rare earth elements, by reducing tax incentives and promoting value addition, industrialization, and financing mechanisms.

References

  1. Boakye, D. (2019). Africa’s Minerals Taxation Regimes: The Example of Tanzania. Natural Resources Forum, 43(4), 239-249.
  2. Diao, X., He, Y., & Zhang, H. (2021). An Analysis of Mineral Tax Incentives in Tanzania. Resources Policy, 72, 102053.
  3. Manya, E., & Mwakalinga, V. M. (2019). The Effectiveness of the Legal and Regulatory Framework Governing the Mining Sector in Tanzania. Journal of Environmental Science and Engineering A, 8(5).
  4. Mwakalindile, A. N. (2019). A Review of Mineral Taxation in Tanzania: Law, Practice, and Policy. Journal of African Law, 63(2).
  5. Tanzania Extractive Industries Transparency Initiative (TEITI) (2019). 2016/2017 Annual Report.
  6. Tax Incentives in Tanzania: The Case of Mining (2019), by Thomas Scurfield and Abel Kinyondo.
  7. United Nations Conference on Trade and Development (UNCTAD) (2019). The Mining Sector in Tanzania: A Review.

Note

This article is a reprint from [Source], with permission granted to republish.