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Tanzania

Status
Meaningful progress
Joined
16 February 2009
Latest validation
2020
Latest data from
2018
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Overview and role of the EITI

Tanzania is predominantly a mining country with both small and large-scale operations. The country’s extractive sector accounted for 5.2% to national GDP in 2019. Its diverse mining sector includes exploitation of gold, diamonds and tanzanite. Tanzania also produces natural gas and plans to commercialise offshore gas discoveries through the development of a liquefied natural gas (LNG) plant. However, a decrease in natural gas prices and delays in the financing of commercial natural gas agreements put future revenues at risk.

Tanzania joined the EITI as part of the government’s wider reform efforts to make the extractive sector more competitive and maximise the benefits from mining. Tanzania EITI (TEITI) has been using the EITI process to produce data on local content, the East Africa Crude Oil Pipeline and the contribution of artisanal and small-scale mining to mining revenues and local content. There is an opportunity for Tanzania to use the EITI to contribute to ongoing public debates on whether the state receives a good return from its extractive deals, and how revenues are being used to benefit citizens.

Economic contribution of the extractive industries

1%
to government revenues
35%
to exports
5.2%
to GDP
1%
to employment
  • Step 1
  • Step 2
  • Step 3

Download country data

Download open data on government and company revenues, revenues by revenue stream and indicator, summary data and more.


Innovations and policy reforms

  • Tanzania EITI contributed to the development of the Tanzania Extractive Industries Act Regulations in 2019. The regulations provide for the disclosure of contracts and beneficial ownership data.  
  • EITI Reporting has resulted in increased transparency on the contribution of the extractive sector to local procurement and on artisanal and small-scale mining production data.

Extractive sector data

Production and exports

Gold

Revenue collection

Level of detail 2

Revenue distribution

2018
Standardised revenue types

Top paying companies

2018

Extractive sector management

Licenses and contracts

Mining licenses are granted on a first come, first served basis while petroleum agreements are entered into through a competitive public tendering process. The Mining Commission and the Minister of Energy, with advice from the Petroleum Upstream Authority (PURA), are responsible for granting mining and oil and gas rights, respectively. Product sharing agreements define conditions for hydrocarbon exploration and extraction and are obtained through direct negotiations with the Petroleum Upstream Authority (PURA). The Ministry of Energy and Minerals maintains an online mining cadastre.

The Tanzania Extractive Industries Transparency and Accountability Act (2015) and the Regulations (2019) have provisions for the full disclosure of contracts. The law is yet to be fully implemented.

Beneficial ownership

In 2020, Tanzania amended the Companies Act to provide for the collection of beneficial ownership data and to maintain a beneficial ownership register. The government further developed beneficial ownership regulations in 2021 to provide further clarity on the required beneficial ownership disclosures for all companies.

In the absence of a publicly available beneficial ownership register, TEITI has been using EITI reporting to collect and disclose information on companies’ legal and beneficial ownership. While compliance has been low, the new legislation is expected to result in more progress on beneficial ownership transparency.  

Revenue distribution

Extractive revenues are collected by the Mining Commission, the Tanzania Petroleum and Development Corporation and the Tanzania Revenue Authority. Local government authorities are entitled to a 0.3% share of profits from extractive activities undertaken in their respective regions, which are transferred directly by companies as subnational payments.


EITI implementation

EITI governance

Tanzania EITI is administered by the TEITI Multi-Stakeholder Group (MSG). The MSG is hosted by the Department of Finance and chaired by Mr Ludovick Utouh, former Controller and Auditor General (CAG) for Tanzania. It is comprised of representatives from government, industry and civil society.

Validation

Tanzania was found to have made meaningful progress with considerable improvements in implementing the 2016 EITI Standard in June 2020, following its second Validation. Tanzania has fully addressed 10 of the 18 corrective actions identified in its previous Validation. The next Validation is expected to commence in April 2022.

Validation scorecard

Latest Validation: 17 June 2020
Year

Assessment of EITI requirements

  • Not met
  • Partly met
  • Mostly met
  • Fully met
  • Exceeded
Scorecard by requirement View more Assessment View more

Overall Progress

MSG oversight

1.1Government engagement

Minister of Minerals Doto Biteko has demonstrated active engagement in the EITIand appointed anew MSG Chair, Mr Ludovick Utouh, aformer Auditor General. Implementation has been somewhat slowed down by the lack of clarity on the process for recruiting an Executive Secretary and the lack of funding for the EITI process. Nonetheless, an acting Executive Secretary has provided interim leadership for the secretariat since May 2018.

1.2Industry engagement

The passage of the Tanzania Extractive Industries (Transparency and Accountability) Act in 2015 was an important milestone. However, since then, poor attendance by government representatives at multi-stakeholder (MSG) meetings, inability to appoint an MSG chair, the absence of an EITI Champion, and apparent lack of political support at the highest level—all corroborated by strong stakeholder views in the same direction—suggest weak government engagement in the EITI process.

1.3Civil society engagement

The second Validation documented stakeholder concerns related to shrinking civic space. However, there was no indication that this had affected civil society engagement in the EITI, which remains full, active and effective.

1.4MSG governance

The MSG and each constituency have made efforts to ensure an open and transparent process for nominating MSG members. There is evidence that the MSGs oversight of the EITI process has improved with the direction from the new EITI Chair and support from the national secretariat. The MSG is performing its required functions in practice, but its contribution to policymaking is limited.

1.5Work plan

The MSG has agreed and published a five-year work plan and operational work plans for implementation of the EITI. The work plans include objectives and activities that reflect national priorities for the sector and focus on improving regular and timely disclosures of information.

Licenses and contracts

2.1Legal framework

The legal framework and fiscal regime of extractive industries and the responsibilities of relevant government agencies are disclosed. Ongoing and proposed reforms are also described.

2.2License allocations

Technical and financial criteria for awarding and transferring mining licenses has been disclosed, as well as the recipients of mining licenses awarded and transferred in the period under review. Remaining gaps relate to clarifying whether licenses were awarded through a bidding process and whether there were non-trivial deviations from the legal framework.

2.3License register

The publicly available mining cadastre now includes license coordinates, but required information on licenses is not available for the oil and gas sector.

2.4Policy on contract disclosure

The policy and practice for contract transparency are clearly described in the 2016/2017 EITI Report.

2.5Beneficial ownership

TEITI has agreed appropriate definitions for the terms “beneficial owner” and “politically exposed person” and requested data from extractive companies making material payments.The MSG also agreed assurances that reporting companies were requested to provide.A study commissioned by TEITI in 2017 provides recommendations towards systematic disclosures of beneficial ownership information. However, follow-up on the study by relevant government agencies has been weak. The 2015 TEITA Act and its implementing regulations issued in 2019 provide a legal basis for disclosures. In 2016, the government committed to establishing a public register of beneficial owners in 2020, but progress has been limited to date. Information on legal owners of extractive companies is held by the government but is not publicly available.

2.6State participation

Disclosures haveimproved regarding the financial relationship between the state and SOEs in the period under review. However, comprehensive information about the underlying rules governing the relationship is lacking.

Monitoring production

3.1Exploration data

The EITI Report contains an overview of the extractive sector, including exploration activities.

3.2Production data

There is nopublicly available data on production values for the period under reviewand data on production volumes appears to be incomprehensive.

3.3Export data

The publicly available information on mineral exports is more limited than during the first Validation. No export volumes were disclosed and data on export values is incomprehensive.

Revenue collection

4.1Comprehensiveness

The low materiality threshold resulted in an excessively broadscope for the 2016/2017 reconciliation exercise. As a result, the comprehensiveness of the reconciliation did not reach the target set by the MSG and unresolved discrepancies raise concerns about data reliability.

4.2In-kind revenues

Not applicable

EITI Requirement 4.2 on in-kind revenues is not applicable in Tanzania.

4.3Barter agreements

Not applicable

EITI Requirement 4.3 on barter and infrastructure transactions is not applicable to Tanzania.

4.4Transportation revenues

The 2016/2017 EITI Report comprehensively discloses revenues collected by TPDC from the transportation of gas. These revenues and payments are reconciled. Transportation revenues only apply to natural gas. The volume of gas transported has not been explicitly disclosed but production volumes are disclosed by company, and all gas is consumed domestically and transported through TPDC’s pipelines. The process for determining the rate is publicly available.

4.5SOE transactions

Transfers between extractive SOEs and the government, as well as the SOEs and other extractive companies, appear to have been comprehensively disclosed. Due to its limited role in the extractive sector, NDC is not considered as a material SOE for the purposes of EITI reporting.

4.6Direct subnational payments

Direct subnational payments have been partly covered in EITI reporting, but disclosures do not provide a comprehensive, reliableand disaggregated overview of revenues collected by subnational government entities.

4.7Disaggregation

EITI data is disaggregated by company and revenue stream, with the exception of direct subnational payments to local authorities which are not disaggregated by receiving government entity.

4.8Data timeliness

The record across six EITI Reports shows efforts to ensure that EITI reporting is timely, with a delay only in the 2012/13 EITI Report.

4.9Data quality

Financial data in the2016/2017EITI Report is based on audited financial statements. However, the documentation of compliance with requested assurances and theIA’s assessment ofcomprehensiveness and reliability are lacking.

Revenue allocation

5.1Distribution of revenues

Tanzania has credibly demonstrated that all extractive revenues enter either the state budget or local government budgets. While the 2016/2017 EITI Report does not explicitly state that the Ministry of Minerals did notretain any revenues they collected in FY 2016/2017, the Secretariat’s assessment is that the description provided in the EITI Report and annual progress report and the existing legal and auditing assurances provide a sufficient overview of the distribution of extractive revenues..

5.2Subnational transfers

Not applicable

Sub-national transfers do not appear to be part of the extractive sector revenue system in Tanzania. Rqeuirement 5.2 on sub-national transfers is therefore not applicable to Tanzania.

5.3Revenue management and expenditures

Not assessed

Apart from a general description of the budget and audit process, the EITI report does not contain information on the management of extractive sector revenue and related expenditures. Reporting on revenue management and expenditures is encouraged but not required by the EITI Standard and progress with this requirement will not have any implications for a country’s EITI status.

Socio-economic contribution

6.1Mandatory social expenditures

Not applicable

There are no mandatory social payments from the extractive sector in Tanzania. Requirement 6.1.a is therefore not applicable. The EITI Report disclosures voluntary social payments by extractive sector companies (or cash equivalent). Information on the beneficiaries of these social payments are not included.

6.2Quasi-fiscal expenditures

As the MSG has not agreed and communicated to the SOEs a clear definition of quasi-fiscal expenditures (QFEs), the Secretariat is not able to confirm that extractive SOEs are not, for example, providing subsidies or undertaking infrastructure investments that could be considered as QFEs.

6.3Economic contribution

The 2016/2017 EITI Report and other publicly available sources such as the regular disclosures by the National Bureau of Statistics and the Bank of Tanzania provide all required data points. Efforts to address artisanal and small-scale mining are commendable.

Outcomes and impact

7.1Public debate

The MSG has made efforts to ensure that government and company disclosures are comprehensible, actively promoted, publicly accessible and contribute to public debate.

7.2Data accessibility

Not assessed

EITI Reports are not yet machine readable, although key information is available online. Capacity-building activities have focused on enhancing the capacity of the secretariat staff and less that of civil society, citizens, media and others. Requirement 7.2 on data accessibility is encouraged but not required by the EITI Standard and progress with this requirement will not have any implications for a country’s EITI status.

7.3Follow up on recommendations

The MSG has considered measures to follow up on findings and recommendations from EITI Reports, monitored implementation of proposed actions and documented the decisions and actions taken.

7.4Outcomes and impact of implementation

The Annual Progress Report 2015 was published within the deadline, and the report reflects Tanzania EITI’s main activities and progress made during 2015.