President Samia Suluhu Hassan’s recent announcement in Geita marks a pivotal moment for Tanzania’s mining sector and its economy as a whole. The Bank of Tanzania (BOT) has earmarked a whopping 1 trillion shillings for a domestic gold purchase program, a move aimed at shoring up the nation’s gold reserves. This initiative is not just a financial maneuver; it’s a strategic response to the foreign currency shortages that have been hamstringing various sectors, particularly mining.
In her closing remarks at the 7th Mining Technology Exhibition, President Samia assured stakeholders, “I assure you, BOT has allocated 1tri/- for purchases, and payments are made within 24 hours, ensuring we are ready to buy gold.” This is a game-changer for local miners who often find themselves navigating a maze of bureaucratic red tape and delayed payments. The swift payment process upon receipt of the fire assay report from approved refineries promises to streamline operations and foster a more robust gold trading environment.
The amendments made to the Mining Act under Section 59 are equally significant. They mandate that license holders and mineral traders sell 20 percent of their gold production to the BOT. This requirement is designed to ensure that a portion of the wealth generated from Tanzania’s natural resources remains within the country, fostering economic stability and growth. It’s a bold step that underscores the government’s commitment to harnessing its mineral wealth for the benefit of its citizens.
Incentives play a crucial role in this program. The reduction of royalty fees from 6 percent to 4 percent, the elimination of inspection fees, and the provision of zero-rated VAT are all attractive propositions for miners. These changes not only ease the financial burden on gold sellers but also create an environment conducive to investment and growth. The government’s allocation of 250 billion shillings for a loan guarantee scheme further supports this initiative, enabling mineral buyers to operate more effectively and expand their businesses.
President Samia highlighted the significance of the mining sector, stating, “Last year, the mining sector contributed approximately 56 percent of all foreign exchange earnings, making it the leading sector in this regard.” This statistic speaks volumes about the sector’s potential to transform the Tanzanian economy. By prioritizing mining, the government aims to improve the livelihoods of citizens, especially small-scale miners who often struggle to compete in a market dominated by larger players.
This initiative is not just about boosting gold reserves; it’s about laying the groundwork for a sustainable future. By ensuring that a portion of the wealth generated from mining remains in Tanzania, the government is taking a proactive approach to economic development. It’s a call to action for miners to engage with this program and seize the opportunities it presents. As the gold market continues to evolve, the implications of this domestic purchase program could resonate far beyond Tanzania’s borders, potentially influencing global gold prices and trade dynamics. The future of Tanzania’s mining sector looks promising, and it’s clear that the government is committed to ensuring that its benefits are felt by all.
