The

Dutch
ahead
of
Economy
Days are coming when
closed
and
gases
still
in
immaturity
effects should not be
forecasting
and
economic
Which sector(s) will
revenues used to be
mining industry?

Dutch disease is defined as too many

expectations of the Government and
citizens to the extent that all eyes are
on resources sector and abandon the
attention on other sectors. In return the
Government and the citizens achieve
nothing from mining sector because
the revenues were used for running the
Government and not investing into
other economic sectors. Since all
efforts were in place for mining
industry, other traditional sectors were
left unattended. After closure of mining
industry, the nation ultimately became
like
having
economic
disease,
everything paralyzed.

Disease
Tanzanias
all mines will be
companies will be
stage. The ripple
undermined but
strategizing
the
counterbalance.
bridge the gap of
accrued
from

It is true that tourism

and
services
sectors are leading ahead of mining industry. But does the effect of missing
revenues and other multiplier economic effect from mining industry be
fulfilled by these sectors satisfactorily?
Re-investment of revenues derived from mining industry into other
traditional economic sector, will make those sectors robust and bridge the
gap of mining industry during closure time.
When analyzing the life spans of most of mining companies operating in the
country, it is far less than 20 years while the returns from gas companies are
expected after 25 to 30 years to come. That means there is a gap of not less
than 5 to 10 years. It is time to plan the alternatives to curb that scenario
before it is about to occur.
In all resource-rich countries, either resource curse or Dutch diseases, one of
this do inflict the countrys economy at some time. In other countries, both
affect the countrys economy.
Resource curse signifies the predicaments facing the community around
which the resources are available. Instead of the community to benefit from
those recourses, ironically they face predicaments and become marginalized.
In Tanzania to some extent the Government has tried to insist CSR in all
communities around the mining operations and get rid of real resource curse.
These Government efforts have been recognised into different international
reports and recommended other countries to emulate Tanzanias minerals

policy for small scale miners. However, the implementation of the policies
takes a lot of time in Tanzania.
Dutch disease is defined as too many expectations of the Government and
citizens to the extent that all eyes are on resources sector and abandon the
attention on other sectors. In return the Government and the citizens achieve
nothing from mining sector because the revenues used for running the
Government and not invested into other economic sectors. Since all efforts
were in place for mining industry, other traditional sectors left unattended.
After closure of mining industry, the nation ultimately became like having
economic disease, everything paralyzed. That is Dutch disease which
occurred in Dutch land when the coal and other mines were at a peak in
production and there was neglection of other economic activities since the
government was collecting the revenues satisfactorily. After closure, they had
to start from zero to revive other sectors.
Tanzania should not be trapped into the same situation. Agriculture, central
railway, all ports at Dar es Salaam, Lake Tanganyika, Tanga, Mtwara, Mwanza
and Nyasa need to be modernized for fostering services sectors in the
country.
Telecommunication sector has proved to be among the potential sources of
revenues. More strategies and forecast by TCRA will yield more and more
economic benefits when comprehensively integrated with online banking
services and e-commerce.
Nigeria has surpassed South Africa economically after changing its vision on
its revenues from oils. The Government introduced the sovereignty wealth
fund where all revenues from oils are deposited and used to strengthen other
sectors. Apparently all sectors have been given equal attention than before
where extractive industry was active while there was relaxation in dealing
with other sectors. We need to follow this example and better know that;
Extractive Industry is not sustainable by itself, therefore cannot bring
sustainable development by itself as well, and unless the revenues
derived from it are re-invested (integrated) into other traditional
economic sector to make them robust. Thats the optimal contribution
the extractive industry can do.
Extractive Industry is a temporary assembly where all careers
convene to work together to produce single line product at a specific
solid years. This temporary assembly needs to be properly organised
so that everybody becomes beneficiary before the assembly disperses.

The Government has been working around the clock to integrate mining
industry with other traditional sectors and currently has introduced fund to
medium and small scale miners to improve their operation and get ready to
expand their activities in relation to other economic activities.
The auditing, monitoring and consultations which have been conducted by
Tanzania Minerals Audit Agency (TMAA) into large, medium and small scale
miners have helped the Government to earn more from mining industry in a
way to fulfill the national vision of 2025 of mining industry to contribute 10%
in national GDP.
The Bank of Tanzania, Tanzania Revenues Authority and National Bureau of
Statistics currently have earmarking the public about the effect of resolute
mining company closure and the decrease of Tulawaka goldmine production
(stamigold) to the exports of gold which compound the strength of our
currency. This sends the signal of Dutch disease gradual approach.
By our columnist who is an expert in extractive industry
Gilay Shamika from Arusha Tanzania. Email gcshamika@yahoo.com, gilayshammy@yahoo.com
Disclaimer: The views and opinions expressed in this article are those of the author and do not reflect the
position of any institution.