Tanzania Weighs Gold's Potential

June 19, 2000

Tanzania Weighs Gold's Potential

The discovery of more gold in Tanzania has the potential to provide poverty relief, but also to cause more problems than it's worth.

In recent years, resource-rich African nations have seen one problem after another stemming from their oil, gold or diamond resources. In certain African countries, corrupt officials have looted government treasuries for personal gain while shortchanging the development needs of the poor, The Wall Street Journal reports. For example, the current Nigerian rulers believe a former dictator accumulated at least $2 billion for himself from the country's oil resources. "With the advent of oil, the government lost its initiative," Chidi Duru, a Nigerian lawmaker, told The Journal. He blames the oil feeding frenzy for the decline of the country's once-prosperous farm economy. "In a sense, it has become a curse, not a blessing."

A recent Oxford University study says nations that depend on the export of natural resources and other unprocessed commodities are more prone to civil wars. In Sierra Leone, for example, the illicit sale of diamonds supports the rebel army and fuels a long-running civil war.

Some African countries have made good use of their natural resources. Botswana, for example, uses its diamond wealth to benefit its people. It's that example that Tanzania hopes to follow next year when Barrick Gold Corp. begins digging the estimated 7.5 million ounces of gold out of a new mine there. If all goes well, the $280 million investment in the mine will produce more than 1,000 jobs and bring roads, water and power to isolated people. Over the next 19 years, says The Journal, the government expects the mine to bring in $80 million, and economists hope some of that money will be used to help reduce poverty and fight the country's HIV/AIDS epidemic.

- by Julia M. Duncan