Africa-Press – Tanzania. THE government has expressed confidence in attaining 10 per cent contribution from the mining sector to the Gross Domestic Product (GDP) come 2025, following positive trend recoded in the past six years.
The Minister for Minerals, Dr Doto Biteko said that the achievements are also attributed to the enactment of natural resources acts, political will as well as commitment among public officials and other stakeholders as the main catalysts in attaining the objective.
Currently, the sector contributes 6.9 per cent to the GDP, up from 4.3 per cent that was recorded in 2014.
Dr Biteko made the statement yesterday during a virtual meeting held to discuss the growth of the mineral sector and its contribution to the national economy.
Going by statistics, the minister said government collections from mineral activities have been increasing year by year, thanks to collaborative efforts by players and the government at large.
“In 2014, the collections were recorded at 168bn/-, contributing 4.3 per cent to the GDP,” noted the minister, saying a lot of efforts were done to upgrade the industry.
According to him, the collection increased to 207.9bn/- (in 2015/16), 213.4bn/- (in 2016/17) 301.3bn/- (in 2017/18), 346.3bn/- (in 2018/19) and 584.8bn/- in 2020/21
He added that in the fiscal year 2015/16, the sector grew by ten per cent, before it dropped to 7.4 (in 2016/17), 5.3 per cent (2017/18), 1.5 per cent (in 2018/19) and jumped to 19 per cent in 2019/2020.
Speaking of the contributions to the GDP, Dr Biteko said in 2015/16, the sector contributed 4.9 per cent before it dropped to 4.4 in 2016/17.
“In the year 2017/18, the contribution increased to 5.1 per cent and 5.2 per cent in 2018/19, and later on jumped to 6.7 per cent in the year 2019/2020,” he said, expressing optimism that the trend assured that the sector will meet the target of adding 10 per cent to the GDP by 2025.
He also acknowledged President Samia Suluhu Hassan’s comprehensive corrective policy interventions that have started yielding positive results.
For his part, the Minister for Constitution and Legal Affairs, Prof Palamagamba Kabudi encouraged local investors to make better use of available opportunities in the mineral sector since the government has put in place all the needed supportive environment.
“There is potential for local companies to take part and engage in activities in their own country, I wish to see a good number of local companies participate effectively in this,” he explained.
Among the government’s initiatives include devising policies and reforming the country’s mineral law aimed at ensuring Tanzania churns more revenue from its abundant natural resources.
The landmark change in the extractive industry came in 2017 when the government passed a number of sweeping changes to the Mining Act of 2010 – the legal and regulatory framework that regulates the country’s natural resources. Regulations were also enacted in 2018 and later amended in 2019.
Three new laws that were enacted significantly increased government control over the mining sector in Tanzania. They are the Natural Wealth and Resources (Permanent Sovereignty) Act, 2017; the Natural Wealth and Resources (Review and Renegotiation of Unconscionable Terms) Act, 2017 and the Written Laws (Miscellaneous Amendments) Act, 2017.
They also stipulate new requirements for state participation in all mining companies, including at least16 per cent free-carried interest, which may be increased up to 50 per cent to match the value of historical tax benefits granted to mining companies.
It also increases royalty rates for gemstones and diamonds from five to six per cent for metallic minerals such as copper, gold, silver, and platinum group minerals from four to six percent.
The new law and regulations, against what some pessimists were thinking, has increased the number of local and foreign investors in the extractive industry, and now Tanzanians are not only spectators, laborers or onlookers of how minerals are exported, but are part of owners of mines through Twiga Minerals Corporation.
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