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Making the Most of the Commodities Boom: Tanzania

Making the Most of the Commodities Boom: Tanzania. Vuyo Mjimba. The Country. Location: Eastern Africa, bordering the Indian Ocean, between Kenya, Zambia and Mozambique Land area 945 000km 2 Population, 40.2m. The Economy.

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Making the Most of the Commodities Boom: Tanzania

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  1. Making the Most of the Commodities Boom: Tanzania Vuyo Mjimba

  2. The Country • Location: Eastern Africa, bordering the Indian Ocean, between Kenya, Zambia and Mozambique • Land area 945 000km2 • Population, 40.2m

  3. The Economy • Import commodities consumer goods, machinery and transportation equipment, industrial raw materials, crude oil. • Imports – partners China 12%, Kenya 8%, South Africa 7.7%, India 6.9%, UAE 5.9% (2007 • Exports – commodities gold, coffee, cashew nuts, manufactures, cotton • Exports – partners China 10.3%, India 9.7%, Netherlands 6.5%, Germany 6.3%, UAE 4.9% (2007 Source: CIA WORLD FACTS BOOK

  4. Economic Indicators Growth of the Tanzanian economy: 1965-2004(% Real) • 1965-2004 2.6 • 1965-1966 7.8 • 1967-1985 2.9 • 1986-2004 3.9 • 1986-1993 3.2 • 1994-2005 4.5 (Mbelle, 2005)

  5. Economic History MKUKUTA/MKUZA LIBERALIZATION & PARTIAL REFORMS UJAMAA 1967-1985 1986-1995 1996-PRESENT Macroeconomic Stabilization Structural Reforms Liberalization Partial Reforms Socialism: Economic Decline

  6. GROSS DOMESTIC PRODUCTION • Source: World Bank, World development Indicators, WDI (December 2008)

  7. M & M GROSS DOMESTIC PRODUCTION L % PR !! UJAMAA • Source: World Bank, World development Indicators, WDI (December 2008)

  8. Allocation of GDP by Sector • Source: IMF,USGS and UNCTAD 2009

  9. Allocation of GDP by Sector • Source: IMF

  10. Monetary Policy and Financial Sector • 1980-No capital or Money markets • 1991 BFIA and LART • 1992 Private Banks and NBFIs • Bank of Tanzania Act, 1995

  11. Inflation. • Source: World Bank, World development Indicators, WDI (December 2008)

  12. International Trade • Source:

  13. Savings • Source: World Bank, World development Indicators, WDI (December 2008)

  14. Foreign Direct Investment • Source: World Bank, World development Indicators, WDI (December 2008)

  15. Demographics • Source: World Bank, World development Indicators, WDI (December 2008

  16. National Income Distribution • Source: World Bank, World development Indicators, WDI (December 2008) and Earth Trends

  17. Minerals in the Economy

  18. Major Actors

  19. Gold Production

  20. Gold Production Gold and Gemstones Production • Source: USGS and Chamber of Mines South Africa

  21. Gold Production Rankings Source:USGS (2005)

  22. Gold Reserves • Source:USGS, 2006

  23. Gemstone Production • In thousand carats

  24. Gemstone Production Rankings Source:USGS (2005)

  25. Exploration Diamond, Gemstone value chain Mine Set up • Source: Baartjes, Mintek 2007 Production Cut & Polish Manufacture Retail

  26. Rough Sales Diamond, Gemstone value chain • Baartjes, Mintek 2007 Rough Dealer Cut & Polish Cut &Polish Polished Sales Polished Dealing

  27. COPPER

  28. Mineral Policy of Tanzania 1997 • OBJECTIVES • to stimulate exploration and mining activities • to regulate and improve artisanal mining; • to ensure that wealth generated from mining support sustainable economic and social development; to minimise or eliminate adverse social and environmental impact of mining activities • to promote and facilitate mineral and mineral based products’ marketing arrangements • to alleviate poverty especially for artisan and small scale miners; • to promote and develop Tanzania as the gemstone centre of Africa • Source: Government of Tanzania Mineral Policy

  29. Government Role • Policy formulation to accommodate the overall and sectoral government policy framework. • Advising on legislation, regulation and fiscal matters related to the sector. • Revenue collection through royalties, annual rents, prospecting rights and licenses. • Monitoring of mining activities. • Collection and maintenance of geo-technical data for promotional purposes. • Provision of extension services to small scale miners. • Administration and inspection of mining activities, and • Carrying out research on minerals.

  30. Bank credit to private sector (%of GDP) S ource:USGS (2005)

  31. Possibilities • Gold • Copper • Gemstone • Iron ore

  32. World ($138million) Looting and routing Tanzania ($12million) USA ($500million)

  33. WHY(NOT) GEMSTONES

  34. THANK YOU

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