By
ADAM IHUCHA
Tanzania
is pushing large-scale mining firms to source their supplies and services in
the country by 50 percent this fiscal year in a bid to stimulate economic growth.
A
country, one of the Africa’s natural-resources-rich territories, is struggling
to ensure mineral boom also uplifts the local communities, particularly where the
minerals are extracted, from abject poverty to the prosperity.
Indeed,
should the extractive companies scale up local procurement of
goods and services by 50 percent, it means that the country would
rake in $675.01million from gold mining firms only.
The
state wants to see the large-scale mining companies source 80 percent of their necessities
and services locally by 2015 in a latest effort to transfer minerals cash to
locals and avoid the ‘resource curse’.
Fresh
data shows in 2012 gold mining corporations alone spent $1.350 billion to
procure supplies and services, but the lions share of the package went to the overseas
markets.
The
government data indicates that 61.4 percent of the amount spent to imports, whereas
the only 38.6 percent was used to source products and services locally.
In
real terms, Energy and Mineral Minister, Prof. Sospeter Muhongo says that last
year his docket was successfully managed to push major gold mining firms to
purchase supplies and services in the country worth $520.67 million or Tshs 833.07 billion.
The
sum is equivalent to an upsurge of 37.2
percent, compared to $379.57 million or Tsh 607.31billion spent in
purchasing the local produces, and services in 2011.
Prof.
Muhongo said that in 2012 the gold mining corporations were also imported
products and services abroad worth $829.35
million or Tshs 1,326.96
billion.
“We want the all mining companies to buy the local
products and services with an eye to stimulate other sectors of economies in
the country” Prof. Muhongo explained.
The
ministry has already engaged 13 different multinational mining firms and prepared
a list of their
entire range of products and services they need.
Prof.
Muhongo said the services and products required include, catering and foodservices; logistics and
clearing; laboratory, law, engineering, contracting services
among others.
“The
government would not only build capacity but also offer the necessary support
to local people in order to be able to offer quality services and supplies to
the mining industry” he emphasized.
Recently,
President Jakaya Kikwete told the mining companies that it does not make sense to import foodstuffs and other services, which
can be procured locally.
“The local population has to be told of the standards they are required
to meet. I am sure they will and where
they need to be enabled we should do so.
By procuring locally, communities that surround extractive operations
are empowered and the whole nation benefits,” Mr Kikwete said during the
corporate social responsibility Presidential award event in Dar.
Indeed, he said, this also allows the extractive industry to integrate
with other sectors of the economy and thus enhance the economic spill-over and
multiplier effects to the economy.
Concern
There’s a general concern that the abundant natural
resources in Tanzania have failed to transform the lives of population.
For example, it is incredible that
wherever prime raw material is discovered, the locals die in misery; their sons
are turned into servants and whores.
However,
the multinational mining companies claim that they have brought economic
benefits to local communities by creating employment, importing new
technologies, and stimulating local economic activity.
Analysts
say indeed there are some local benefits, but many of the claims are mirages.
Studies
by the UN’s trade body, UNCTAD, show that the ‘employment effects of
large-scale mining are negligible’ and that ‘large-scale mineral extraction
generally offers limited employment opportunities, and hence has little impact
on employment, at least at the macro level’.
Some
estimates are that mining in Tanzania has created around 10,000 jobs in the
past decade. The country’s six major gold mines employ a total of 7,135 people.
However, large-scale mining has made many more unemployed.
Before
the arrival of multinational companies, small-scale artisan miners dominated
gold mining; they used simple tools and techniques, providing small incomes for
a large number of people who were generally uneducated and poor.
One
study estimated that by the late 1990s, the sector employed between 500,000 and
1.5m people. By 2006, a report commissioned by the World Bank estimated that
there were around 170,000 small-scale miners in Tanzania.
Comparing
these figures, large- scale mining may have made around 400,000 people
unemployed.
Growth
Tanzania has seen its mining industry growth
rate of 7.8 per cent in 2012, up from just 2.2 percent in 2011, thanks to the
increased investments in the capital-intensive industry.
However, the contribution of the mining sector to national economic output, or GDP also swelled, though slightly from 3.3 percent to 3.5 percent year-on-year from 2011 to 2012.
The government's National Development Vision estimates that the contribution of mining to GDP will reach 10 per cent by 2025.
Gold accounted for 94 per cent of the country's total mineral exports in 2012, maintaining Tanzania’s position as Africa's fourth-largest producer of the precious metal.
However, the contribution of the mining sector to national economic output, or GDP also swelled, though slightly from 3.3 percent to 3.5 percent year-on-year from 2011 to 2012.
The government's National Development Vision estimates that the contribution of mining to GDP will reach 10 per cent by 2025.
Gold accounted for 94 per cent of the country's total mineral exports in 2012, maintaining Tanzania’s position as Africa's fourth-largest producer of the precious metal.
Data from the Bank of Tanzania (BoT) and the Tanzania Chamber of Minerals and Energy (TCME), the mining sector now directly employs over 15,000 people, up from just 1,781 mining jobs in 1997 when the large-scale mining industry was making its first baby steps.
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