Tanzania: Mining Sector Contributes Over 15pc to GDP in 3 Months

By Deogratius Kamagi

MINING is among the key sectors that have been touched by reforms and which have contributed to

the growth of Tanzania's economy during the first phase of the administration of President John Magufuli.

Data from the National Bureau of Statistics (NBS) shows that mining contributed 15.3 per cent to the country's Gross Domestic Product (GDP) in the first quarter (from January to March 2020), thanks to the reforms that have been made.

The reforms have also benefited small-scale miners, as the government through the Ministry of Minerals has been issuing mining silences to small-scale miners and put in place policies and guidelines for their empowerment.

Among other things, the government has enacted a law designed to relieve small-scale miners of the burden of paying the withholding tax of 5 per cent and 18 per cent value added tax.

The move attracted more small-miners to the business with the government issuing at least 78 mining licences in 2019 alone.

According to NBS, the mining sector recorded the growth rate of 15.3 per cent in the first quarter of 2020 compared to the growth rate of 10.0 per cent recorded during the similar quarter of 2019.

"The growth was mainly attributed to an increase in the production of gold and silver. During the period under review, gold production increased to 12,404kg in the first quarter of 2020 from 8,656kg in the corresponding quarter of 2019," reads part of the report.

Moreover, production of silver increased to 3,128kg in the first quarter of 2020 from 2,856kg in the similar quarter of 2019. Salt production increased by 17 per cent to 35,497 tonnes in the first quarter 2020 from 31,321 tonnes in the similar quarter of 2019. When tabling the ministry's budget estimates for 2020/21, Minister for Minerals Doto Biteko said the government had also continued educating small-scale miners on better ways that they could play in the mining sector.

While global artisanal and small-scale miners have often not accorded with the attention they deserve as governments embrace large-scale mining firms at least in Tanzania the focus is shifting in their favour.

In doing so, the government also withdrew licences belonging to the country's two biggest mining companies, Barrick Gold Corp and London-listed Glencore Plc from the gold-rich areas in north-western to allow more than 5,000 small-scale miners to gain access to fields.

President Magufuli directed the revocation of big investors' licences in Mwanza Region to pave the way for small-scale miners.

This was done following the fact that for years, Tanzanians were not benefiting from the country's natural resources, especially minerals due to dubious investors supported by corrupt government officials.

During the campaign for 2015 general election, Dr Magufuli pledged to empower small-scale miners, revoke licences for firms and individuals who breached the law and identified more special areas for small-scale miners.

He did the same after he was elected. As a result, more small-scale miners have been empowered.

One of the Mirerani-based artisanal miner, Mr Saniniu Laizer, recently extracted about 15km of Tanzanite gemstone which he sold to the government at 7.7bn/-.

The new billionaire, who is now the talk of the town, commended the government for its efforts to help small-scale miners through which the 24km perimeter wall along Mererani mine was constructed.

"Unearthing the gemstone was one thing, but getting it safe until the point of sale is quite another. I attribute the successful sale of it to the security which is an innovation of President Magufuli," said Mr Laizer.

Mr Laizer said there were people who were laughing at the idea of constructing the 24km perimeter wall, mostly those outside the mine, but as for him and other miners, they found it to be an important step towards their security and ensure what they got remained theirs to the end.