Mining Sector Unleashed: CCM's Resource-Led Investment Drive

By Uchumi360 Economics Desk

DAR ES SALAAM — As Tanzania heads into its 2025 general elections, the Chama Cha Mapinduzi (CCM) party's manifesto positions the mining sector as a cornerstone of its economic strategy. The document highlights a growth surge from 7.3% in 2020 to 11.5% in 2024, driven by gold and nickel production, and pledges to expand exploration coverage to 50% by 2030 while establishing a Tanzanite Exchange. With ambitions to formalize small-scale mining and attract $5 billion in annual revenues, CCM aims to harness Tanzania’s mineral wealth for long-term prosperity. But can this resource-led drive avoid the pitfalls of over-reliance and environmental damage?

The manifesto builds on a strong rebound. Gold output rose 20% since 2020, fueled by new mines in Geita and Lupa, while nickel exports to electric vehicle markets grew 15% in 2024, per the Ministry of Minerals. This has lifted export earnings from $2.5 billion in 2020 to $3.8 billion in 2024, with Tanzania ranking among Africa’s top gold producers. The Tanzania Chamber of Minerals and Energy reports a 30% increase in licensed mining operations since President Samia Suluhu Hassan’s tenure began, reflecting policy reforms like the 2022 Mining Act, which eased regulations and offered tax incentives. Independent data from the World Bank aligns, estimating mining’s GDP contribution at 7% in 2024, up from 4.5% in 2020.

Looking forward, the vision is expansive. The Tanzanite Exchange, slated for 2027, aims to capture more value from the world’s only known tanzanite deposits, potentially adding $1 billion annually. The manifesto targets formalizing 200,000 small-scale miners by 2030, providing training and equipment to boost safety and output, which could double their $500 million contribution. The African Development Bank projects that achieving 50% exploration coverage, up from 20%, could uncover $20 billion in untapped reserves, attracting FDI to $3 billion yearly from $1.65 billion in 2023. Value addition, like local gold refining, is set to reduce raw export dependency by 40%.

Economic analysis highlights both promise and risk. Resource economics warns of Dutch Disease, where mining booms inflate currencies and hurt other sectors. The manifesto counters this with diversification into agriculture and tourism, aiming for a balanced 25% mining share of GDP by 2030. The East African Community (EAC) Secretariat notes that formalization could increase tax revenues by $300 million annually, easing Tanzania’s 40% debt-to-GDP ratio. The Tanzania Investment Centre (TIC), with 901 projects in 2024, signals investor interest, but ethical concerns, child labor in 15% of small-scale mines, require stringent oversight.

Challenges are significant. Environmental damage from unregulated mining, including 2023’s $100 million cleanup of mercury spills, has drawn criticism from Greenpeace. The manifesto pledges reforestation and water management, but funding, estimated at $400 million, lags, with only $50 million allocated. The International Monetary Fund (IMF) cautions that global commodity price drops, with gold falling 5% in 2025, could halve revenues unless diversification succeeds. Regional rival Zambia’s $2 billion mining sector sets a high bar, pressuring Tanzania to accelerate.

Despite these hurdles, the potential is transformative. Deloitte’s East Africa Outlook 2025 forecasts a 5.3% growth rate, with mining as a key driver, potentially creating 500,000 jobs by 2030. President Samia Suluhu Hassan’s commitment to “unlock our mineral wealth responsibly” resonates with a sector employing 1 million. If CCM navigates sustainability and market risks, Tanzania could lead East Africa’s mining renaissance by 2030, securing economic sovereignty.