Tanzania Launches Major Gold Purchase Initiative to Strengthen Reserves, Boost Mining Sector
GEITA, Tanzania — President Samia Suluhu Hassan announced on Saturday that the Bank of Tanzania (BoT) has set aside one trillion shillings ($400 million) for a domestic gold purchasing program, a significant step in bolstering the nation’s gold reserves and addressing foreign currency shortages that have hindered economic development.
Speaking at the close of the 7th Mining Technology Exhibition in Geita, a mineral-rich region in northern Tanzania, President Samia underscored the government’s commitment to strengthening the mining sector, which has become a key driver of the national economy. She emphasized that the initiative is designed not only to boost the central bank’s reserves but also to ensure that the benefits of the country’s mineral wealth are felt more widely by Tanzanians.
“The Bank of Tanzania is ready to buy gold, and payments are made within 24 hours,” President Samia said, detailing the program that requires license holders and mineral traders to sell 20% of their gold production to the central bank. The president also highlighted attractive incentives, including a reduction in royalty fees from 6% to 4%, the elimination of inspection fees, and a zero-rated VAT, allowing sellers to claim input tax refunds.
The move comes as Tanzania continues to position itself as a major player in the global mining sector. In the 2022-2023 fiscal year, the mining industry contributed 56% of the country’s foreign exchange earnings, making it the top sector in this regard. The government’s broader strategy, President Samia said, is to ensure that “a certain percentage of wealth remains in the country as a future guarantee.”
To support gold traders and increase their access to capital, the government has allocated 250 billion shillings ($100 million) as part of a loan guarantee scheme. This funding aims to empower mineral buyers, especially small-scale miners, who play a crucial role in the sector’s output.
Empowering Small-Scale Miners
President Samia, during her visit to Geita, also toured the Geita Gold Refinery and the Geita Mining Market, one of 44 regional markets established to regulate and enhance transparency in mineral trading. The government has encouraged small-scale miners, who account for 40% of Tanzania’s mineral production, to use these markets, ensuring a reliable platform for selling their minerals.
The president announced that 21 new mining licenses had been issued to youth and women’s groups to foster their participation in the sector. This initiative is part of the government’s push to increase inclusivity and local ownership in the industry.
“The mining sector has enormous potential to improve the lives of citizens,” President Samia said, adding that small-scale miners in particular stand to benefit from these reforms.
Government Surpasses Revenue Targets
The Ministry of Minerals, led by Anthony Mavunde, also announced its intention to establish new mineral laboratories in Dodoma and Geita to assist small-scale miners with technical services, including sample analysis. The ministry reported exceeding its revenue collection targets, raising 287 billion shillings ($115 million) in the first quarter of the 2024-2025 fiscal year.
Minister Mavunde attributed this success to reforms that have increased efficiency in revenue collection and broadened the tax base within the mining sector.
Long-Term Vision for Mining
The government’s gold purchase initiative and the creation of mineral markets are part of a broader vision to make mining a cornerstone of Tanzania’s economic future. As part of this strategy, President Samia reiterated the need for value addition and greater research into the country’s mineral resources. By 2030, the government aims to significantly increase the sector’s contribution to national development.
“The wealth generated from our minerals must translate into real improvements in the lives of Tanzanians,” President Samia said, signaling the administration’s commitment to ensuring that mining not only drives foreign exchange earnings but also provides long-term economic benefits to its people.
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