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.
The extractive industry is primarily regulated by the Mining Commission, the Petroleum Upstream Regulatory Authority, the national oil company Tanzania Petroleum Development Corporation (TPDC), and the Tanzania Revenue Authority.
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.
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.
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.
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.
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.