Commodity Boom Could Transform Tanzania

Extensive exploration activities have led to new gold discoveries in the region of Tanzania surrounding Lake Victoria, and new mines are expected to start operating in the coming years. The Tanzanian government is hoping to raise significant income by granting more production licenses. Increased mining income should help the country diversify its (agriculturally focused) economy. African Barrick Gold has become the government's favourite partner, and the company is hoping to become a big gold player in Tanzania's northwest.
 
But resource wealth carries both advantages and disadvantages. Tanzania is one of the poorest countries on the African continent. After gaining political independence, Tanzania's first president Julius Nyerere decided that socialism was the way forward – as opposed to the economic route chosen by its far more developed neighbour, Kenya. But Nyerere’s socialism has wrought terrible hardships on the Tanzanian people, which in the face of growing globalisation and increasing economic integration of countries all over the world are lagging in terms of economic development. This is partly owing to their lack of English language knowledge, as Nyerere instructed Tanzania's public schools to not teach English (the language of imperialism). Therefore, most Tanzanians only speak Swahili.
 
In an effort to fight underdevelopment, Tanzania’s new leaders are trying to rescue the country from poverty by implementing free-market policies. While residents – and especially youth - at the country's urban centres of Dar es Salaam, Dodoma or Mwanza seem receptive to free-market ideals, most rural regions remain attached to the old system, which is hindering the government's reform efforts. Increasing mining activities in the country have caught the attention of some people – for the wrong reasons. Many youngsters with no employment or education prospects try to steal gold and other metals from local mines. In this context, the recent shooting at the North Mara Gold Mine is sadly unsurprising.
 
However, on the plus side some astute intermediaries have purchased huge tracts of land surrounding Lake Victoria – dividing their acreage into smaller plots that they then sell to small prospectors. This region between Mwanza and Shinyanga is very rich in gold. However, gold discoveries made by landowners and small prospectors have also lead to violence as a result of growing rivalries among plot owners. Each time a small yet productive seam is found, fights arise over the borders dividing the plots.
 
Tanzania's mineral wealth is a blessing – but only if the government and people can throw of the shackles of the country’s socialist past, and foster respect for private property and an impartial rule of law. Absent these, and Tanzania may continue to struggle in terms of economic development, despite its vast natural bounty.