Tanzania's precious minerals boom: issues in mining and marketing.

Since Tanzania began liberalising and privatising the mining sector a decade ago, the substantial economic potential of the industry is more and more apparent. Two key policy decisions set off a mining boom. One was the decision in the late 1980s to end the State Mining Company (STAMICO) monopoly and allow any Tanzanian to register a claim and sell minerals. The second was the liberalisation of currency controls, beginning with permission to exporters to use their export proceeds and culminating in the floating of the currency in 1994. This doubled the benefits of mining, as the foreign exchange proceeds could be used to finance imported consumer goods, equipment and spare parts, which had long been scarce. These all set off an immediate artisanal mining boom. The purpose of this study is to provide an understanding of artisanal marketing patterns, their logic and their economic impact. This study has come at a time of sweeping changes in Tanzania’s mining sector, and in the larger national economy. Tanzanian policy-makers face a unique opportunity in the swelling mining boom. They also have to prepare for its inevitable subsequent decline. The liberalization of mining has brought poverty alleviation to rural areas in the 1990s on a scale far surpassing the impact of donor-funded job-creation efforts. Working with that trend, future donor-funded efforts can multiply their impact. On the other hand, if this sudden growth is neglected or misunderstood, the benefits of sudden growth in mining could be transitory. The impact could be negative if future inflation and other economic distortions are not controlled, if arms or drug dealers, or money launderers infiltrate the trade, or if greed, corruption or ethnic tensions are allowed to build around resource riches. None of these negative situations is currently an imminent trend in Tanzania, but all have occurred in other mineral-rich countries.
Available online: https://pdf.usaid.gov/pdf_docs/Pnacl372.pdf
Mining sector, State Mining Company (STAMICO), liberalisation of currency controls, National economy, Marketing, Tanzania
USAID (2001). Tanzania's precious minerals boom: issues in mining and marketing. African Economic Policy Discussion Paper Number 68 March 2001. Equity and Growth through Economic Research (EAGER).