Mineral deposits like oil and natural gas are a valuable heritage of all generations in a country. If properly exploited, the proceeds can liberate respective country populations from extreme levels of poverty and continuing dependence on foreign aid.

Extraction of non-renewable mineral deposits must earn host countries their deserved share of revenue for investing and sustaining development. Host countries should collect all the taxes they deserve in respect of all profits players other than the government realize in the course of their sale of mineral rights; provision of services, supplies, appraisal, extraction of mineral deposits,  and sale of realized mineral products. Taxes collected should be invested in a manner which benefits country majorities and can be re-invested for the benefit of  present and future generations.

Joblessness and deterioration of income among the majority rural populations in underdeveloped countries keep on worsening  as exploitation of the huge economic growth potentials (such as mineral wealth and agriculture) they are gifted with continues or is ignored.

Countries should invest revenues generated from exploitation of their non-renewable mineral resources like oil and natural gas in the development of their present economic growth as well as future generations. Holding some of the revenues generated from oil and/or natural gas exploitation in special funds for future generations alone rather than investing them in the current jobless poor populations is counterproductive as it denies the society benefits in form of modern economic infrastructure and revenue build-up.

Countries like Norway decided to establish special funds for future generations because their exploitation of oil and/or natural gas resources generates more revenue than their current needs. Norway  has thus resorted to establishing a special fund for future generations and investing in high value investment opportunities anywhere in the world.

Tanzania should invest in agriculture, mining and establishment of community banks. Community banks can provide credit for poor rural populations of  all generations to enable them initiate, modernize and expand their economic activities in agriculture, animal husbandry, bee-keeping, fisheries, forestry and hard-rock mining and mitigate the escalation of joblessness and deteriorating incomes. Established community banks can attract professionals, experienced players and investors from all over the world to evolve modern-highly productive and cost-effective production systems in agriculture and mining. This would provide employment for the majority rural populations and youths and mitigate migration from rural areas (with plenty of highly productive opportunities to offer) to urban centers (with very minimal of such to offer).

Maximization of revenue collection from foreign involved exploitation of mineral resources like oil and natural gas in mineral rich underdeveloped countries like Tanzania and investing it all in community banks is important. The current push to invest such revenues in special funds for future generations alone is counterproductive as it denies present generations the opportunity to realize their potential. Those who are advocating for fund freezing for future generations simply forget that developing human resource rather than just dishing out cash is what determines progress in society.

By Dr A. Massawe
Consulting Mining Engineer, Dar es Salaam.