The significance of the extractive sector in Tanzania cannot be understated with regard to its impact on the country’s economy. Tanzania is a country that hosts both large- and small-scale operations, which cumulatively contribute to 7.3% of the total GDP in 2022. Tanzania’s diverse collection of minerals – which includes diamonds, copper, tanzanite and gold (which makes the major portion of its exports) – contributed to $2.7 billion to the economy in 2021, according to The Bank of Tanzania. Further, the Bank notes that from 2018 – 2021 there has been a consistent increase in the sector which saw its share of GDP increase from 4.8% to 7.3% by 2021.
Beneficial Ownership Regulations were introduced aiming to improve the levels of transparency and accountability among companies, specifically by uncovering individuals who have significant control or have shares that they may possibly own indirectly. The relevance of this is specifically towards the extractive sector, which exists complex ownership structures that can hinder the genuine beneficiaries of the extractive sector as intended.
The new GFI scoping memo, titled “Impact of the Beneficial Ownership Registry and Law on the Extractives Sector in Tanzania,” examines the implications of Tanzania’s Beneficial Ownership Laws on the country’s extractive industry. It explores how these laws, designed to enhance transparency and accountability by identifying and registering the true owners of companies, affect the operations, governance, and economic outcomes within the extractive sector. The memo aims to provide insights into the effectiveness of these regulations in curbing illicit financial flows, improving governance, and fostering sustainable development in Tanzania’s rich natural resources sector.