Local business development programs are key for utilizing mining value chain

Ibrahim Mshindo, Director of Business Development at Dar es Salaam Stock Exchange (DSE) speaking to participants of the North Mara Local Business Development program on investment strategies for enterprise growth at Malaika Beach Resort in Mwanza over the weekend. 

 

Tanzania’s mining sector has evolved over the last few years owing to the government’s continued efforts to attract investors and strengthen the business environment. This has led to an influx of foreign investors interested in the country’s mining sector. The development of Tanzania’s vast mineral resources is crucial to the socio-economic development of communities surrounding mining sites and the generation of revenue for the government.

The increase in investment in mining exploration has resulted in the growth in exports of precious metals such as gold, coal and gypsum. The National Bureau of Statistics’ (NBS) highlights that the extractive sector experienced a 12.2% increase in the third quarter of 2021 compared to 4.9 per cent growth in the same period in 2020.

The Government of Tanzania developed the local content policy to ensure that mineral extraction and revenue benefit Tanzanians. The policy and subsequent regulations aim to foster economic diversification and business linkages within the Tanzanian economy, enhance job creation through encouraging the development of Tanzanian expertise and capacity in order to participate across the country’s economic spectrum in a meaningful way.

To help achieve this, foreign mining companies have implemented programs to strengthen the capability of local businesses, and advance local content.

A notable example is the North Mara Local Business Development program which has partnered with Kengo Consulting and the College of Business Education (CBE) to implement a unique program that works to improve the capacity of enterprises and exploit the opportunities in the value chain. The transformational program helps companies with strategies for business improvement and sustainability across sectors but with a focus on mining.

Speaking about the program, Barrick President and Chief Executive Mark Bristow, said; “The Local Business Development program will be a game-changer in the mining sector supply chain and we expect the capacity of participating enterprises to improve significantly and exploit the opportunities in the value chain.”

The Dar es Salaam Stock Exchange also acknowledged the mining firms’ efforts to make the sector value chain inclusive. DSE’s Director of Business Development, Ibrahim Mshindo said that there are over 4 million Tanzanian enterprises, 99% of whom are Small Medium Enterprises and which contributes 35% of the Gross Domestic Product (GDP) and employ 8 million Tanzanians.

“Enterprises are the engines of the Tanzanian economy and having structured business development programs like these are key to unlocking economic growth in Tanzania through enterprise growth,” he said.

“I commend North Mara Gold mine and Kengo for their commitment in capacitating Tanzanian businesses,” said Mshindo.

North Mara has invested 73 per cent of its spending with local companies where 44 per cent is comprised of local businesses - indicating the firm’s commitment to create sustainable economic opportunities for the surrounding and broader national economy.

The implementation of such programs by North Mara Gold Mine demonstrate the importance of more mining firms investing in local business development and ensuring that Tanzania’s Development Vision is attained. It is therefore a task for both government and mining investors to work hand in hand to create an enabling environment and ensure more local firms benefit from the opportunities available in the mining sector value chain. This holistic approach to investment guarantees prosperity for all.