Where is the Endowment Fund for our natural resources?

By Ezekiel Kamwaga

For the past 20 years, Tanzania economic growth has been at an average of six percent per annum – which is impressive for a developing country. One of the bedrock of this economic performance has been the extractive sector.

Key message: Extractive sector is finite which means if you can’t benefit when the resources are abundant, you can’t recover the loss when you have nothing to offer on the table. The best time to gain is when you have resources yet to be extracted.

According to government data, for the last ten years, the mining revenues have always been at around one trillion shillings per annum making one of the major contributor to our country’s GDP.

Despite the success, there have always been opinions that the country could benefit more from its resources than it was in the past and now. That’s why, in the same duration of time –two decades to be precise, new laws and regulations have been put in place to make sure that any lacuna in our legislative framework is sort out for the benefit of many.

Extractive sector is finite which means if you can’t benefit when the resources are abundant, you can’t recover the loss when you have nothing to offer on the table. The best time to gain is when you have resources yet to be extracted.

Since the turn of this decade, a lot of discussions have been doing the rounds on how the funds generated from the extractive sector have been used. The danger of corruption and mismanagement of public funds are always lurking with regards to this sector.

To make sure that future generations also benefits from our extractive riches, there was a suggestion in the past to create a special fund where the country will save money for future generations. Actually, a law was made to make sure that the Endowment Fund is created for that matter.

The problem is, since the law was made, nothing seems to move with regards to the matter. At this moment in time, nobody in the government or the CSO’s is asking questions about the fund. This is very dangerous.

Without the fund, there is real danger that our generation will squander all the money and left future generations with some unwanted left overs. We do not want to go to that way as that will be unfair.

I am happy that next month, November 6th and 7th in Dodoma, some Civil Society Organizations under the coordination of HakiRasilimali will meet under Extractive Sector Forum to discuss pertinent issues in the sector now and I hope the Endowment Fund fate will be discussed and deliberated upon.

It is important to discuss about these fiscal issues because there is a lot to be talked about. If you look at figures from Tanzania Revenue Authority, Tanzania Extractive Industries Transparent Initiative (TEITI) and the International Monetary Fund (IMF) you are always faced with different figures and while that can be explained, it is critical that the data be streamlined.

Because government officials are also expected to be in attendance in Dodoma, it is my sincere hope that the issues of proper management of revenues and the investment for future generations will be discussed at length.

There are some African countries who have already established Endowment Funds in their respective countries and their knowledge and experience shared during the HakiRasilimali’s coordinated event in Dodoma will be crucial and on time.

Whether we like it or not, our country’s natural resources aren’t the privilege of this generation alone which means we have no right to squander them as we like. We have the responsibility of being prudent, intelligent and forward thinking when it comes to the use of our finite extractive riches.

If there is a lacuna in our legislative framework that prohibits any progressive move in the sector, then it has to be pointed out and sorted. But, we have the duty to extract every rightful penny of ours and properly manage and invest the revenues accrued from the extractive sector.

The End