The Local Content Regulations In Tanzania And Its Compatibility And Compliance With The World Trade Organisation Laws

Mineral extraction and revenues in Tanzania have made very little positive impact on the lives of most Tanzanians. The government of the United Republic of Tanzania has taken the honourable and bold initiative through the enactment of the Local Content Regulations GN 3 of 2018. It reflects a strong will to foster diversification and linkages to the local economy, create jobs through the use of Tanzanian expertise, goods and services, businesses and financing in the mining value chain. It maximises on value addition. Not only does it force licensees and contractors to use indigenous Tanzanian companies for the procurement of goods and services, but also requires a physical presence in Tanzania. Tanzania is embarking a new direction in the mining sector with a big chance to transform the economy if the regulations are well implemented and quick to adapt to a changing market.

Tanzania's local content regulation with regards to the mining sector has the following objectives:

To develop local employment and the domestic labour market To transfer skills, technology and know-how To create local value, increase local linkages and develop domestic industry To diversify economically To promote innovation, technology, research and development, enhancement of technology transfer and creation/increase of local technological capabilities To ensure local ownership of the mining industry To increase revenue streams from minerals To develop local community projects I will summarise the key points here that will serve as a purpose to discuss whether or not these are compliant with Tanzania's commitments under the World Trade Organisation (WTO).

Local Content Regulations applicable to the mining sector in Tanzania

Salient feature of these regulations in relation to their compliance with the WTO rules are as follows:

An indigenous Tanzanian company should be given first preference in the grant of a mining license. Tanzanian company is defined as majority + 1 percent equity participation by citizens and local content requirements are introduced in terms of composition of board of directors and management. Where a foreign company qualifies for a mining license, it must have at least 5% equity participation of an indigenous Tanzanian Company. The Minister of Minerals has the power to waive this requirement on condition. Regarding trade in goods and services in Tanzania, a foreign investor must enter in venture with a Tanzanian Company through equity...