Extractives for Human Development: Maximizing Domestic Participation Along the Value Chain

Tanzania has a wealth of natural resources. . If managed well, the country’s resource deposits, especially natural gas, have the potential to fast track economic growth and development, support the diversification of the economy into higher value-adding activities, and, ultimately, improve the living standards of Tanzanians. Historically, however, the extractive industry has largely operated in enclaves of mining activity with weak linkages to local economies. Decades after most African countries gained independence, mining operations remain predominantly focused on extracting and exporting raw minerals to industrialized countries at the expense of Africa’s development. Highly capital-intensive and technical in nature, mining operations frequently import the bulk of their inputs and hire skilled expatriates. Hence, few local jobs are created, linkages to local suppliers are limited, and knowledge and technology transfers are minimal. What is clear is that building domestic participation in the extractive sector in Africa will take time. The value-add from local content will not happen overnight. . However, the long-term advantages of enhanced local development, alongside the empowerment of a generation to participate directly in Africa’s natural resource wealth, are well worth pursuing. The ultimate aim is to ensure that natural resources are not a curse but a blessing, and bring sustainable economic and social benefits to Tanzania and countries throughout the continent.