Defying the Looming Resource Curse with Indigenization? Insights from two Coal Mines in Tanzania

Abstract

Tanzania’s rich mineral deposits coupled with poor performance of the mining sector have triggered a public debate on the imminent danger of the ‘blessing’ of mineral resources turning into a ‘curse’. In efforts to possibly avoid the resource curse, the role of the state in mining through the revival of state-owned enterprises (SOEs) and the promotion of indigenous participation have been strengthened. Using accounts from semi-structured interviews, focus group discussions and secondary sources, we present insights from two coal sites; one where state-owned enterprise is involved in a joint venture with a western multinational (Tancoal) in Ngaka and the second, which was privatized to domestic investors connected to the ruling elites (Kiwira). Findings from the first case shows how state involvement as a strategy to avoid resource curse may violate the rights of small holders contrary to the popular discourse that state involvement is going to safeguard smallholder’s rights. The second case shows how indigenization, which is meant to empower local investors, can be misused to enrich domestic investors and political elites through patronage networks.

* Corresponding Author: Associate Professor, University of Dar es Salaam, E-mail: fpmaganga@gmail.com