Tanzania should learn from Zimbabwe's indigenization laws - CTI Itayi GARANDE Sun, 20 Jul 2008 22:18:00 +0000

TANZANIA has indicated that it will learn from Zimbabwe's indigenization laws in order to make sure that the fruits of their labour in the extractive industries are retained in the country for the benefit of Tanzanians.   An official at the Confederation of Tanzanian Industries (CTI) says a quota system proposed by Zimbabwe where 51 per cent shareholding is retained by 'indigenous Zimbabweans' would be ideal for the country – which has vast mineral resources.   Tanzania today boasts vast diamond deposits and gold and gemstone endowments.   The mining sector has rapidly expanded in the last few years and claimed a huge chunk of the country's Gross National Product and employed thousands of people.   The CTI argues that although the sector has expended in the last few years, it has not led into the development of the country as only 2% of the profits have been retained in the country and 98 % being repatriated by foreign-owned mining conglomerates.   Tanzania introduced a 100% repatriation policy to attract investors into the country. This has led to a deterioration of the balance of payments (albeit often offset by incoming FDI), a lack of positive linkages with local communities and has the effects on competition in national markets.   Mining in the country is dominated by South African and British mining companies.   Tanzania - with an estimated 38 million people - is still struggling with widespread poverty. The country's main economic sectors - mining, tourism and agriculture - have failed to generate enough wealth for Tanzanians as profits are repatriated and due to the absence of proper regulatory controls.   Recently a significant new gas discovery was made in Tanzania by an Australian-based company, Key Petroleum Limited, of up to 500 billion cubic feet (BCF) of gas in the offshore field of Kiliwani North. This is near the existing SongoSongo gas-processing plant in Kilwa district where the company is already operating.   However, such key discoveries will not benefit Tanzania much if the 100% repatriation policy stands.

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Jean-Louis Kayitenkore
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