by Ben Taylor
Increase in mining revenue, driven by gold
The Ministry of Mining collected TSh 650bn between July and December 2025, equivalent to 109% of its goal for the period and 54% of its target for the 2025-26 fiscal year, according to a statement from the Minister for Minerals, Anthony Mavunde.
This reflects a substantial and sustained growth in the sector, which has seen its contribution to the national GDP climb from 6.8% in 2020 to 12% in the second quarter of 2025. The sector’s overall revenue has dramatically increased from TSh 210bn in 2016/2017 fiscal year to TSh 1.07 trillion in 2024/2025.
The growth has been significantly bolstered by strong performance in the gold sub-sector. Between July and December 2025, 14.66 tonnes of gold, valued at TSh 3.75 trillion, were sold through the country’s refineries.
Debate over gold reserves and development spending
In late January 2026, Minister of State in the President’s Office Kitila Mkumbo announced the government planned to sell off part of its gold reserves to finance infrastructure projects, as it confronts a potential suspension of development aid from international partners.
Tanzania’s relationship with gold reserves extends back decades. The Bank of Tanzania first established a gold reserve in 1990, though this practice was discontinued in 2002. The initiative to rebuild the reserve gained momentum after June 2021, to the point where the Bank of Tanzania’s gold reserves stood at approximately US$1.3 billion in December 2025, equivalent to about 18.9 tonnes of gold, according to Bloomberg. This represents a substantial asset, comprising approximately 36% of the country’s total foreign assets.
The sale of national gold reserves to fund development is not unprecedented, though it remains relatively uncommon. Central banks and governments may liquidate portions of their gold holdings for various strategic reasons, including diversifying reserve portfolios, managing currency fluctuations, or investing in critical infrastructure projects.
Tanzania’s decision to sell gold reserves must be understood in the context of a dramatic decline in aid finance. The country has historically been heavily dependent on foreign aid, though this has declined sharply in recent years. Official Development Assistance (ODA) peaked at USD $761 million in 2013, before gradually declining to US$389 million in 2024 and a projected US$118 million in 2025, representing an 84 per cent collapse from the peak. In 2024, ODA accounted for a little under 3% of Tanzania’s public expenditure.
Further, US political changes in 2025 (see previous issues of TA) and global reactions to the post-election political context in Tanzania have shaken the aid finance picture further. The European Union has taken the most formal action: the European Parliament voted in November 2025 in favour of a non-binding resolution calling for the suspension of EUR156 million in EU aid to Tanzania; the resolution was adopted by 539 votes in favour, none against, and 27 abstentions. Nevertheless, the European Commission has not yet officially suspended the aid, but has instead frozen the funds pending further assessment and dialogue with Tanzanian authorities.
Zitto Kabwe, a prominent opposition politician and economist, has raised legal concerns about the proposal to sell-off gold reserves. Writing on X / Twitter, he warned that selling the central bank’s gold for government projects could violate the Bank of Tanzania Act, specifically sections 51 and 52, which govern the use of foreign currency reserves.
LNG plant – progress, and a timeline
Deputy Minister for Energy Salome Makamba announced in January that Tanzania expects to sign a Host Government Agreement (HGA) for the long-discussed Liquid Natural gas (LNG) project before June this year, with first production anticipated by 2034.
Signing the HGA triggers the next development phase but does not mean a Final Investment Decision (FID) is imminent. Front end engineering design typically requires 2-3 years, during which a sales purchase agreement will be finalised, and the engineering procurement and construction contract and bidding process will take place. Offtake contracts with international buyers must also be negotiated prior to FID. This puts a realistic FID window around 2028-2029, with first LNG cargoes in the early 2030s, according to Energy, Capital and Power, an advisory service.
In the meantime, here is a reminder of previous announcements, projections and expectations for the proposed LNG plant.
Early 2010s: Offshore gas discoveries by international oil companies in Blocks 1, 2 and 4 were first made; these discoveries later formed the basis for plans to develop an LNG export facility. These discoveries sparked early discussions around export-oriented LNG infrastructure.
2014: The Tanzanian Ministry of Energy formally announced the intention to develop an LNG plant to monetise offshore gas, marking the first public projection of a large-scale LNG export project.
Mid-2015: Earlier planning documents and international economic analyses indicated that a final investment decision could occur “at the earliest in late 2016”, with production potentially after 2020, assuming supportive fiscal and legal frameworks were agreed. (IMF)
February 2016: Government acquired land in Lindi for the LNG terminal, showing intent to prepare the site as a precursor to development.
August 2016: President John Magufuli publicly urged officials to accelerate the LNG project to start construction.
November 2016: Statoil (now Equinor) said that, given the lack of a stable investment framework, a final investment decision would not be made for at least five years (i.e. not before around 2021 or later), reflecting ongoing uncertainties.
2018-2019: The Tanzanian government halted talks with potential investors toward the end of 2019 to review production sharing agreements covering offshore gas terms: delaying expectations for an FID.
Early 2021: After leadership change following President Magufuli’s untimely death in March 2021, President Samia Suluhu Hassan instructed the Ministry of Energy to accelerate LNG negotiations.
June 2022: Tanzania signed an initial Host Government Agreement (HGA) with Shell, Equinor and other partners: a significant step toward development. During this event, government officials publicly stated that a final investment decision was expected by 2025.
May 2023: Industry reports reiterated that following the framework agreement signed in 2022, a final investment decision was being targeted for 2025: with ensuing construction aimed at commissioning between 2029–2031.
February 2025: Energy Minister Doto Biteko said negotiations with investors could conclude by June 2025 (a milestone needed before progressing toward an FID).
October 2025: Reports noted that the Tanzanian government was pushing to finalise the LNG deal by the end of 2025, reflecting the culmination of more than a decade of negotiations and delays.
Jan 26-30, 2026: Tanzanian officials, including the Deputy Minister of Energy, stated the government expected to sign the binding Host Government Agreement before June 2026, a key precondition for progressing toward FID.