Tanzania has relaxed mining sector regulations after sustained advocacy efforts informed by USAID Hub policy analysis.
The new regulations will expand the number of commercial banks providing services to the sector and put Tanzania in compliance with its commitment to the free movement of capital within the East African Community (EAC) under the Common Market Protocol.
The Mining Regulations on Local Content (2019) came into effect on February 8 after years of advocacy against discriminatory measures in Tanzania’s Mining (Local Content) Regulation, GN No. 3 of 2018.
The Hub contributed to these efforts by supplying its grantee, the Tanzania Private Sector Foundation (TPSF), and other private sectors actors with analyses used to call for reforms. The Hub created a reform memo that identified regulations inconsistent with the EAC Common Market Protocol and international best practices and provided justifications for reform.
The memo highlighted how Tanzania had tightened local content requirements for contractors, sub-contractors and licensees in the mining sector; required a Tanzanian ownership stake of at least 51 percent for licensing; required a 25 percent Tanzanian equity partnership to supply goods or services to licensees; and compelled investors to use financial services from Tanzania banks unless they could demonstrate a lack of capacity. These same areas for reform were included in the Hub’s Tanzania Investment Policy Assessment 2018.
The new regulations reduce the local ownership stake and local content requirements for mining firms and their service providers operating in the country, enabling more actors to participate in the sector.
This helps ensure that companies that have the resources to further develop Tanzania’s mining sector – and 20 percent Tanzanian ownership – can support the industry’s growth