Local Content

Abstract

Tanzania is rich with natural resources, which have significant potential to contribute to the country’s economic development. Several laws recently passed in Tanzania are dedicated to establishing linkages between foreign firms in natural resource extraction and the local economy. This chapter documents this legislation and the institutions set up to enforce and monitor these laws. Effectiveness of local content legislation and the potential for firms in the mining sector to contribute to local development are then evaluated using a combination of qualitative and quantitative evidence. The chapter next uses existing data to explore trends in local content and the estimate the value of local content in the mining sector; this exercise highlights the need for improved data. We then examine other developing countries’ experiences with local content legislation, drawing lessons for Tanzania.