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