This report analyses how Tanzania is failing to use its considerable mineral resources to tackle poverty, and asks: where is Tanzania’s mineral wealth going? Gold mining is the fastest growing sector of Tanzania’s economy. Minerals now account for nearly half the country’s exports and Tanzania is Africa’s third largest gold producer. Yet ordinary Tanzanians are not benefi ting from this boom both because the government has implemented tax laws that are overly favourable to multinational mining companies and because of the practices of these companies.
This report identifies three severe problems, namely:
- the government is receiving very low tax revenues from gold mining;
- gold mining is subject to minimal governmental or popular democratic scrutiny and is widely perceived to suffer from the associated problem of corruption;
- people in the gold mining areas are failing to significantly benefit, and many are being made poorer.
The authors argue that major policy changes are needed, including:
- Tanzania’s mining law should be amended to ensure that the national economy, and Tanzanians, benefit much more from gold mining. No new mining contracts should be signed until this reform has taken place;
- large donors, such as the British government and the World Bank, must champion this agenda. This will require pressure and monitoring from civil society organisations in Tanzania and internationally;
- existing mining contracts must be made public and subject to parliamentary scrutiny;
- all the gold mining companies and the government should be required by law to make a full public declaration of how much they pay and receive in tax and other remittances from gold mining;
- Tanzania should join the Extractive Industries Transparency Initiative;
- mining contracts must include specific provisions for consultation with local communities. This will require a change in attitude by central government which fears a loss of control over the mining contracts.
