In Washington: Rachel McColgan-Arnold
(202) 458 5299
In Dar es Salaam: Nicodemus Odhiambo Marcus
Washington, June 9, 2009 - The World Bank’s Board of Executive Directors today approved an International Development Association (IDA) credit1 of US$50 million to support implementation of a Sustainable Management of Mineral Resources Project (SMMRP) in Tanzania.
The objective of the project is to strengthen the government’s capacity to manage the mineral sector to improve the socio-economic impacts of large and small-scale mining and enhance private local and foreign investment. Specifically, the project will support transparency of the mining legal and regulatory framework, to support the government’s objective of ensuring that mining sector development and investment conforms to international good practice, adjusted to the particular conditions of Tanzania. The project will also support Tanzania’s efforts to implement the Extractive Industries Transparency Initiative (EITI). Tanzania became an EITI candidate country in February 2009.
Over the past 10 years, Tanzania’s mining industry has experienced a boom in mineral exploration and mining activities. Notable developments include the commissioning of six large-scale gold mines at Nzega, Geita, Bulyanhulu, North Mara, Buhemba, and Tulawaka. This has resulted in an increase in the country’s annual gold production from less than one ton per annum in 1998 to about 50 tons in 2008, making Tanzania the third largest gold producer in Africa.
Despite the success in attracting mineral sector investment, the growth has generated concerns over the level of revenue generated and captured by the government, and the broader benefits of the sector for Tanzania. Criticisms include inadequate institutional capacity to oversee the sector, particularly in auditing investment costs, environmental management costs, and enforcing safety and occupational health standards, inadequate value added in exported minerals and insufficient integration of mining into the national economy.
“The reality remains that the way the mining sector and its revenues are managed has implications not only for this generation of Tanzanians, but also for future generations,” said John Murray McIntire, World Bank Country Director for Tanzania, Uganda, and Burundi. “This project sends a positive signal that the country is serious about good management of its mineral resources for the optimal benefit of its people, to deliver economic growth and poverty reduction. As the government implements this project, the World Bank offers its full support.”
At the national level, the SMMRP will help to improve the government’s capacity to manage the sector properly, improve capacity to ensure that the revenue due to Tanzania from mining operations, particularly gold flows to the treasury, and support local economic development and value addition for mining in the country. Tanzania’s capacity to address environmental and social impacts of mining through the relevant policy and regulatory framework will also be strengthened. At the community level, outcomes will be supported by positive changes fostered by including mining communities in essential decision making processes.
“This project is a positive move towards improving the economic and social climate in Tanzania and may also lead to an inflow of additional investment into the sector,” said Christopher Gilbert Sheldon, the World Bank Task Team Leader for the SMMRP. Its focus on potential growth scenarios through mineral sector development and improved management of environmental and social issues will support increased growth and enhanced competitiveness, improved governance, and reduced conflict.”
A detailed description of the credit is contained in the SMMRP Program Document, which is publicly available at the web link below, or by sending an email to firstname.lastname@example.org, or by requesting a hard copy at the World Bank office in Dar es Salaam.
For more information on the project visit:
Sustainable Management of Mineral Resources Project
For more information on the World Bank’s work in sub-Saharan Africa visit:
For more information on the World Bank’s work in Tanzania visit:
1The credit is provided on standard International Development Association (IDA) terms, with a commitment fee of 0.5 percent, a service charge of 0.75 percent over a 40 year period of maturity which includes a 10-year grace period.