Abstract
Developing countries strive to market their business environments so as to attract investment. However, the business environment is always dynamic and full of uncertainties. This article investigates the dynamic environment of the mining sector, highlighting on the case of Barrick Gold Corporation, Anglo Gold Ashanti and Shanta Gold which are the three dominant mining companies in Tanzania. The study also uniquely encompasses the Tanzanian Government position in instituting the changes in policy in efforts to improve the citizen’s welfare and boost the revenues emanating from the sector. A qualitative design was used in this paper and findings indicate that the mining environment in Tanzania is very favorable for investors, although few un-honest government officials have used the loopholes in the legal framework to benefit out of the situation. Lessons are learnt from the investor’s perspective and the government side and constructive dialogue is on the way to ensure that concerns from both parts are encompassed so as to attract further investment in the extractive sector and to ensure that the mining FDI abide to the laws without any potential room for deviating. Finally, the study predicts a bright future for Tanzania mining sector due to remarkable infrastructure projects that are under way including; the standard gauge project, hydroelectric power station and roads. These projects are likely to lower the costs of operation to the potential mining companies.
Highlights
Mining is an important component in the global economy, and plays a key role in the economic growth of many countries
The African business environment has been previously viewed as a hostile business environment, recently there has been a change in notion among majority of investors and they are currently investing in the Africa Mining sector
Despite the increasing growth of Foreign Direct Investment (FDI) inflows in Africa in the mining sector, trends indicate that the growth in Africa is at an arithmetic rate whereas the global FDI flows grows at a geometric rate [24]
Summary
Mining is an important component in the global economy, and plays a key role in the economic growth of many countries. Mining in Africa is mostly conducted by multinational companies originating from Canada, Australia and America. This is due to the fact that the venture requires heavy financial investment which is a great challenge to many African investors. The reforms in the mineral sector have resulted to growth of the sector and export earnings from an average of 1% of total export in 1997 to 52% in 2013, the number of employment in large scale mining operations have increased from 1,700 to 15,000 in 2013, gold exports increased from less than 1 tone in 1997 to 50 tons in 2013, the contribution of mining to Samuel Mrisha: Dynamic Business Environment in the Tanzanian Mining Sector the gross domestic product (GDP) was less than 1% in 1997 as compared to 3.5% achieved in 2013 [26]. The light of the growth of the sector, the Tanzanian Business environment have played a very great role
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