COUNTRY IN FOCUS
under the cloak of resource nationalism, and are claimed
to uplift the people. But most of the time, the outcome is
catastrophic for the very people they claim to represent,” Baissac
told African Mining in an exclusive interview. communication (10.3%), the report said. The economy grew by
6.6% in the first quarter of 2019 and government expects full-
year GDP growth to expand by 7.1% in 2019, up from
7% in 2018.
A growing economy Political risk
Despite its deteriorating economic position due to weaker
external balances, falling forex reserves, and increasing
public debt, Tanzania has enjoyed a high growth rate and it is
expected that GDP will continue growing at between 6% to 7%
per year in the next two to three years. Smith says Tanzania is a
stable country with well-functioning public institutions and the
president has been in office since 2015. However, Smith warns
that there are many uncertainties and challenges. “Tanzania is
currently ranked 137 on the ease of doing business index. The
IMF, World Bank and UN all cite access to finance, corruption,
inadequate infrastructure and unpredictable government
policies (as was experienced in 2017) as the big obstacles to
doing business in the country,” Smith says. Phiri and NKC African Economics regard the current political
risk in Tanzania as low to moderate. However, Phiri expects
the political climate to heat up in the run-up to the 2020
election, as criticism of government policies by opposition
is expected to intensify. Over the short term, political
risks could stem from isolated terrorist attacks by Islamist
extremists (particularly in Zanzibar and in coastal areas) and
an increase in opposition protest action. Negative spill-overs
from instability in neighbouring Burundi and the DRC
also pose significant downside risks over the short- to
medium-term.
Tanzania's economy expanded by 7.2% in the second quarter
of 2019 compared with 6.1% in 2018. According to a Tanzania
National Bureau of Statistics report released recently, the fast
growth of the gross domestic product (GDP) in the April-June
2019 period was due to the improved performance of the
construction, mining and communications sectors.
“The largest share to GDP in the second quarter of 2019 was
from tertiary activities which accounted to 41.5%, followed
by primary activities by 32.9% and secondary activities had
the least share of 25.7%, before adjustment for taxes,” the
report said.
Tanzania is the fourth largest gold producer in Africa after
South Africa, Ghana and Mali. The country exported
TZS3.44-trillion (USD1.50-billion) worth of gold in 2018.
However, the country also hosts decent coal reserves and
diamonds. Peak Resources is developing Ngualla, an impressive
neodymium and praseodymium rare earth mine while several
graphite projects are in the pipeline. According to Smith rare
earth elements is making a major comeback. “This is mostly
thanks to the Sino/US trade war where US and Europe are again
looking for sources outside of China. Whether Ngualla will be
brought into production or not is a different question, but it is
getting funded,” Smith says.
Meanwhile, several graphite mines are in different phases
of development in Tanzania. Black Rock Mining published a
Definitive Feasibility Study (DFS) in July last year while Graphex
Construction recorded the highest growth of 19.6% followed
by mining and quarrying (17.2%) and information and
Opportunities abound
Ships continue hauling resources from the port of Dar Es Salaam. Tanzania’s economy continues growing despite recent political and
economic difficulties.
24
African Mining January 2020
www. africanmining.co.za