Since 2017, Tanzania’s mining sector has undergone a profound transformation, driven by bold legislative reforms aimed at maximizing national benefits from its rich mineral resources, including gold, graphite, nickel, and rare earths. Initiated under President John Magufuli and refined under President Samia Suluhu Hassan, these reforms have reshaped the sector into a cornerstone of Tanzania’s economic growth, aligning with the nation’s Vision 2025 and Vision 2030 goals of sustainable development and resource nationalism. By increasing state participation, enforcing Local Content, and promoting value addition, Tanzania is on the journey to boost its fiscal resilience but also positioned as a potential hub for critical minerals in East Africa. However, challenges such as regulatory instability, environmental risks, and infrastructure gaps threaten the sustainability of these gains. This piece analyzes the economic impact, the role of small-scale miners, the influence of mineral markets, the push for value addition, and the risks and opportunities that lie ahead.
Economic Impact of the Reforms
The reforms, starting with the Written Laws (Miscellaneous Amendments) Act of 2017, the Natural Wealth and Resources (Permanent Sovereignty) Act, and the Natural Wealth and Resources Contracts (Review and Renegotiation of Unconscionable Terms) Act, have significantly transformed Tanzania’s mining sector. Key measures included raising royalties on gold, copper, silver, and platinum from 4% to 6%, mandating a 16% government free carried interest in mining projects, banning raw mineral exports, and requiring local dispute resolution (TanzaniaInvest, 2024; Mining Technology, 2023; The Citizen, 2017). These changes initially caused investor uncertainty, with exploration budgets plummeting from $212.7 million in 2012 to $55.6 million annually between 2016 and 2021 (Fraser Institute, 2024). However, subsequent adjustments, including framework agreements with companies like Barrick Gold, restored confidence, attracting $3 billion in investments by 2024 (Mining Technology, 2023; Barrick Gold Corporation, 2020).
The economic impact has been substantial. The sector’s GDP contribution surged from 4.8% in 2017 to 10.1% in 2024, exceeding the Vision 2025 target a year early (TanzaniaInvest, 2024). Gold production increased from 55,000 kg in 2023 to 60,000 kg in 2024, with exports reaching $2.95 billion (39% of total exports) in 2023 (Statista, 2024). Revenue collection hit Tzs. 753.82 billion ($290 million) in 2023/24, a 20.7% increase over three years, funding critical infrastructure and social programs (Tanzania Revenue Authority, 2024). Local procurement, valued at $1.48 billion in 2023, accounted for 90% of mine sales, stimulating small and medium enterprises (SMEs) and reducing import reliance (Tanzania Chamber of Mines, 2023). The sector’s diversification into critical minerals like graphite and nickel aligns with global demand for electric vehicle (EV) components, reducing vulnerability to commodity price swings (African Mining, 2024). These outcomes highlight the reforms’ success in fostering economic diversification and fiscal resilience, though equitable distribution remains essential for inclusive growth.
The Pivotal Role of Small-Scale Miners
Artisanal and small-scale miners (ASM) have emerged as a driving force in Tanzania’s mining sector, contributing 40% of sector earnings in 2024, up from 20% in 2020, and producing significant volumes, such as 22,014 kg of gold worth TZS 3.443 trillion in Geita alone from 2021/22 to 2024/25 (Tanzania Economic Review, 2024; Geita Regional Mining Office, 2025). Employing over 1 million people, ASM supports rural livelihoods and bolsters the sector’s 10.1% GDP share (World Bank, 2023). Government initiatives, including training, loans, and formalization programs backed by a $45 million World Bank loan in 2015, have modernized ASM operations, enhancing efficiency and reducing illegal activities (Tanzania Ministry of Minerals, 2022; World Bank, 2015).
ASM’s significance lies in its accessibility and economic multiplier effects. Operating in remote areas with traditional methods, ASM supplies diverse minerals, including gold and gemstones, and reinvests income into agriculture, boosting household production (Journal of Development Economics, 2019). Policy support, such as reserved mining areas, has further integrated ASM into the formal economy, curbing smuggling and enhancing compliance (Tanzania Geological Survey, 2023). However, challenges like health risks from silica exposure and mercury pollution underscore the need for improved safety and environmental measures to sustain ASM’s transformative impact (Environmental Science & Technology, 2023).
Mineral Markets and Central Bank Interventions
The Bank of Tanzania (BoT)’s gold purchase program, initiated in 2019, has been instrumental in stabilizing the sector. By purchasing 418 kg of gold in 2023/24 and targeting 6 tons in 2024/25, BoT has curbed smuggling, diversified reserves, and supported the Tanzanian shilling (Bank of Tanzania, 2024). A September 2024 directive mandating 20% of gold exports for BoT at published prices, alongside local mineral markets established since 2020, has formalized trading and boosted revenue collection by 24.3% to $1 billion in Q3 2024 (Tanzania Revenue Authority, 2024; Bloomberg, 2024). These measures have enhanced traceability, reduced tax evasion, and increased investor confidence, contributing to a 17.7% export growth by June 2025 (Bank of Tanzania, 2024). By mitigating currency depreciation and aligning with de-dollarization trends, BoT’s interventions have made revenue streams more predictable, fostering sector stability.
Value Addition: Driving Jobs and Growth
Tanzania’s value-addition strategy, particularly the ban on unprocessed mineral exports since 2017 and the 2025 mandate for 20% domestic gold refining, has positioned the country to retain greater economic value. This approach is projected to drive 9 – 15% GDP growth over seven years, generate over $1 billion in annual taxes, and create 25,000 direct jobs by 2030 (World Bank, 2023; Tanzania Mining Commission, 2025). The strategy has spurred 8,000 – 10,000 jobs in refining, assaying, and logistics, with indirect benefits for SMEs through 90% local procurement (Tanzania Ministry of Minerals, 2023; The Citizen, 2024). Special Economic Zones (SEZs) and infrastructure like the Julius Nyerere Hydropower Project further support processing, linking mining to manufacturing and tourism (Infrastructure Africa, 2024).
By focusing on critical minerals like graphite for EV batteries, Tanzania is integrating into global supply chains, attracting foreign direct investment (FDI) through partnerships like the Minerals Security Partnership (MSP) (Financial Times, 2024). However, infrastructure gaps, such as power disruptions costing $18 per ounce, must be addressed to fully realize these gains (Energy & Mining International, 2024).
Challenges to Sustainability
Despite these achievements, several challenges threaten the reforms’ sustainability. Frequent regulatory changes, such as the 2025 amendments, and local content requirements have deterred FDI, with gold exploration declining 74.8% from 2012 to 2024 (Fraser Institute, 2024). Environmental issues, including ASM-driven deforestation and mercury pollution, alongside health risks like high TB incidence, demand stronger enforcement (Environmental Science & Technology, 2023). Infrastructure deficits and low ASM capitalization hinder technological adoption, while conflicts between large and small-scale miners and election-driven nationalism in 2025 could disrupt policy stability (The East African, 2025). Global factors, such as commodity price volatility and climate risks, further complicate the outlook (Bloomberg, 2024). Addressing these through participatory policies, ESG compliance, and infrastructure investment is critical.
The Future of Tanzania’s Mining Sector
Looking ahead, Tanzania’s mining sector is poised to become East Africa’s critical minerals hub by 2030, potentially contributing over 15% to GDP. Gold production could exceed 70,000 kg annually, with projects like Nyanzaga (200,000 oz/year from 2027) and diversification into nickel and graphite driving growth (Mining Journal, 2024). Vision 2030’s target of 50% geoscientific coverage and $3 billion in FDI, coupled with SEZs and infrastructure upgrades, could unlock $11.7 billion in opportunities (Tanzania Investment Centre, 2025). Global partnerships, such as Tesla’s graphite agreements, signal Tanzania’s integration into EV supply chains (Tesla, 2024). However, success hinges on addressing regulatory, environmental, and infrastructural challenges to ensure inclusive and sustainable growth.
Tanzania’s mining reforms since 2017 have transformed the sector into a key driver of economic growth, boosting GDP, creating jobs, and enhancing fiscal stability. Small-scale miners, central bank interventions, and value-addition strategies have been pivotal, while challenges like regulatory uncertainty and environmental risks require urgent attention. By maintaining a balance between resource nationalism and investor confidence, Tanzania can solidify its position as a global leader in critical minerals, delivering inclusive prosperity for its people.
