Mining and quarrying sector in Tanzania saw an increase in the productivity level by +17.5% as of last year 2017 as the Government’s call to action has borne fruits in terms of regulation practices and maintenance of the sector. President John Pombe Magufuli has reinstated the lost glory of the sector through his tough love during his tenure at the helm.
The country’s sector performance had been criticized by experts and economists seeking to know if it could be an investment opportunity with the scandals arising. The case of Acacia Mining Company that swept its glory away undermined the security of the sector and investors and the role and responsibilities of the authorities to keep in check the operations in the sector.
The scandal saw the Government of Tanzania come short of revenue with Acacia not paying its dues. On the other end, Acacia’s name was dragged in the mud being found on the wrong side of the law for such irregularities.
The company was slapped with a hefty fine for not filing their returns to the tax authorities which led to some branches closure. The firm lost good money but the issue has been unheard of since the measures were taken.
Earlier, analysts had questioned the risky business in the mining sector in East Africa region as compared to other parts of the world. The region was ranked poorest in the mining sector which could easily scare away potential investors and rob them of hopes to invest in the sector. This would be a huge blow to the East African Community as Foreign Direct Investments have been a great contribution to the GDP.
Natural gas production was one of the pace setters on the sector. The natural gas production has been pivotal in the supply of electricity to the country as the Government seeks to electrify more homes to elevate the economic value of the people and the nation in general. It has been a business opportunity to some companies that have connected themselves to gas pipeline.
Precious pearls like diamond added value to the sector, and the ban on coal importation led to a higher production of coal. Importation was quite expensive weakening the currency and increasing the dependency of the country. It also mounted the country’s debt that could trigger a weak point in the economy, squeezing the budget to pay off its debts.
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The construction sector added value to the GDP expansion of the country which stood at 7.1% in 2017 with major projects such as Standard Gauge Railway to ease transportation being a fundamental figure in the country. There was a demand for raw materials for building which saw local manufacturing industries come to play. Upgrades in infrastructure such as road networks to ease congestion also helped in the GDP expansion with better tarmac making transportation easier and effective. Expansion of airports to handle more cargo guided the Government to increase its GDP.