There was a time when Zambia’s copper belt seemed invincible. In the years following independence, copper revenues funded schools, hospitals, roads, and government salaries. The metal was a source of pride, proof that Africa could finance its own future. Then the cycle turned. By the late 1970s and 1980s, copper prices collapsed, mines shuttered, fiscal deficits widened, and Zambia found itself trapped in debt and dependency. Social services crumbled, the IMF imposed harsh structural adjustments, and what had once been a story of prosperity became a lesson in fragility.
This is the danger of monoculture: when one commodity dominates exports, revenues, and politics, the fortunes of the nation rise and fall with the tides of global markets. Copper made Zambia rich and poor at the same time. It created a state strong in rhetoric but weak in resilience, capable of abundance during booms yet paralysed in busts.
Tanzania now stands on the edge of its own metal moment. Kabanga Nickel in Kagera is among the most significant undeveloped nickel deposits in the world, and the timing could not be more promising. Global demand for battery metals is surging as the energy transition accelerates. But the lesson from Zambia hangs over us like a warning: if we anchor too much of our future to a single metal, we risk building fragility into the heart of our economy.
The choice is clear. Nickel must be a lever for diversification, not a lifeline of dependence. To see why, we must first study Zambia’s copper dependence with clear eyes.
Zambia’s copper dependence: the anatomy of monoculture
Zambia’s experience is not an accident of geology alone; it is the product of choices that allowed copper to dominate every corner of the national economy.
Export dependence. For decades, copper accounted for as much as 80 percent of Zambia’s export earnings. When prices were high, foreign exchange flowed, the currency strengthened, and imports surged. When prices fell, the entire external account imploded.
Fiscal dependence. At its peak, copper contributed nearly a third of government revenue. Budgets were written in the language of copper prices. Schools, hospitals, and civil service salaries depended on the ups and downs of the London Metal Exchange. A single metal effectively underwrote the state.
Employment illusion. Mines in the Copperbelt created thousands of jobs, but their linkages to the wider economy were weak. Manufacturing was shallow, agriculture underdeveloped, and services largely dependent on the mine wage bill. When mines cut back, entire towns collapsed.
Political exposure. Copper cycles translated directly into political cycles. Booms brought soft budgets and generous programmes. Busts brought austerity, unrest, and frequent leadership changes. Political legitimacy became hostage to global commodity markets.
Structural weakness. The dominance of copper distorted policy. With foreign exchange easy during booms, agriculture and manufacturing were neglected. With revenue concentrated in one metal, diversification incentives were weak. The currency is often overvalued, hurting exports of other goods. Copper crowded out the rest of the economy.
This is the anatomy of monoculture: export concentration, fiscal over-dependence, weak linkages, political vulnerability, and structural distortion. It is not just an economic problem; it is a systemic fragility.
Why Tanzania is different, but not immune
Tanzania has reasons to believe it is not Zambia. Our economy today is more diversified, with agriculture still forming a large share of GDP and employing the majority of citizens. We have a broader resource base: gold, tanzanite, graphite, coal, natural gas, limestone. Our geography is more favourable, with ports on the Indian Ocean and trade corridors reaching deep into the continent. On paper, we appear to be better positioned.
But geology and geography are not destiny. Choices are. And the risks of monoculture remain very real if Kabanga Nickel is treated as “the silver bullet” for development.
Risk 1: Fiscal temptation. Nickel royalties and taxes could quickly become the centrepiece of budget planning. If government overspends in good years, deficits will balloon in bad years. The temptation to treat nickel as a fiscal lifeline will be strong and dangerous.
Risk 2: EV hype. Global demand for nickel in batteries is real, but it can lead policymakers to overcommit. Substitution is already happening: lithium-iron-phosphate chemistries reduce nickel demand; recycling will eventually soften growth curves. Betting too heavily on nickel as if demand is guaranteed is risky.
Risk 3: Political cycles. Leaders will want to show quick wins: “Nickel is paying for our infrastructure.” That message sells, but it narrows the politics around a single resource. When prices fall or projects slip, the backlash can be severe.
Risk 4: Dutch disease. Large nickel inflows could strengthen the shilling, making agricultural and manufacturing exports less competitive. If revenues are not invested wisely, other sectors may shrink under the weight of a booming resource sector.
So yes, Tanzania is different from Zambia, but we are not immune. The difference will be made not by geology but by governance: whether we deliberately design Kabanga as a catalyst for diversification rather than a monoculture of dependence.
Kabanga as lever, not lifeline
If Kabanga is not to become Zambia’s copper in disguise, Tanzania must treat it as a lever. A lever multiplies force. It does not bear the whole weight itself, but it helps move other things. Nickel must play that role.
A) Leverage for infrastructure. Nickel throughput can anchor SGR and power projects like JNHPP, but they must be priced for multi-user economics. Kabanga cannot and should not bear the whole burden of the corridor. The railway must move agriculture, containers, fuel, and other minerals. The power grid must serve factories, farms, and towns as well as smelters. If Kabanga is treated as the only payer, the system will collapse into dependence.
B) Catalyst for industrialisation. Nickel refining should be designed not just to produce metal but to build skills, supplier ecosystems, and vendor capacity that can serve other sectors. Metallurgists trained for Kabanga should later design steelworks. Fabricators serving smelters should also serve construction and energy. Royalties must be channelled into industrial estates, vocational training, and sovereign funds, not simply consumed.
C) Support for agriculture and services. Mining towns create demand for food, housing, logistics, and services. If linked deliberately, this demand can stimulate agriculture and SMEs. Royalties can finance irrigation and rural electrification, which in turn lift productivity. If ignored, mining towns become enclaves, rich in extraction but poor in linkages.
The central message: Kabanga is not the economy. It is a lever for the economy. The test of success will not be how much nickel is exported but how many other sectors grow because nickel exists.
What avoiding monoculture looks like in practice
The idea of “diversification” often floats in speeches, but it only matters if it is translated into rules, institutions, and hard numbers. If Tanzania is to avoid Zambia’s fate, we must embed safeguards in the way Kabanga revenues and linkages are managed.
1. Fiscal rules.
Nickel royalties and taxes should never be allowed to dominate the national budget. A clear ceiling, say, no more than 20 percent of annual expenditure financed by mining revenues, could discipline fiscal planning. The remainder should be invested in a Natural Resource Fund, with the proceeds allocated transparently to infrastructure, savings, and long-term projects. This insulates the budget from the shock of price swings and prevents election-cycle overspending.
2. Industrial linkages.
Local content policies should not stop at hiring percentages or catering contracts. They must deliberately build capabilities that outlive the mine: Tanzanian firms manufacturing parts, providing engineering services, running laboratories, or managing logistics. These firms can then service agriculture, energy, and construction long after Kabanga’s peak.
3. Export diversity.
As nickel ramps up, so too should agriculture and manufacturing exports. Every budget speech should report not just tonnes of ore exported, but also the share of non-nickel exports. This keeps policymakers accountable for balance.
4. Institutional checks.
Revenue collection and allocation must be transparent, managed by bodies shielded from political pressure. An independent audit of the Natural Resource Fund should be non-negotiable. Citizens need to see that nickel is managed, not consumed.
5. Narrative discipline.
Perhaps most subtle but most critical: leaders must resist the urge to present nickel as “the answer.” The story must be that nickel is a contributor, a catalyst, part of a bigger transformation. The language we use will shape expectations, and expectations will shape politics.
Counterarguments and answers
Every policy path has skeptics. It is essential to hear them and respond.
Counterargument 1: “Zambia’s problem was bad governance, not copper itself.”
This is partly true, but the structure of the economy is also essential. Over-dependence magnifies the cost of errors. When one metal fund 30 percent of your budget, every governance mistake becomes existential. A diversified base makes mistakes survivable.
Counterargument 2: “Nickel demand is stronger and longer-lasting than copper ever was.”
EV growth is real, but substitution is already underway. Battery chemistries with less nickel are scaling fast. Recycling will soften demand curves. Nickel’s future is strong, but not infinite. To bet the house on it is reckless.
Counterargument 3: “We need nickel revenues immediately for social programmes.”
Yes, urgent needs exist. But overspending today leaves us exposed tomorrow. Zambia tried the same, generous programmes in booms, brutal cuts in busts. The poorest suffered most. Better to spend steadily, save wisely, and protect services across cycles.
Counterargument 4: “Tanzania is safer because we have more resources than Zambia.”
Diversity of resources helps, but only if managed well. Having gold, gas, and nickel will not save us if each is treated as a fiscal crutch. The principle remains: no single resource should dominate.
The deeper political challenge: patience versus pressure
Behind every economic decision lies a complex web of political realities. Politicians operate on five-year cycles; mining and industrialisation work on thirty-year horizons. The temptation will always be to trumpet nickel as a quick win: “Look, Kabanga has paid for this road, this hospital, this power plant.” Citizens, understandably, want to see visible benefits.
But the politics of impatience can sabotage the economics of endurance. If revenues are overspent early, if expectations are inflated, if promises are too grand, the eventual correction will be painful. Zambia lived this cycle repeatedly: copper paid for everything until it paid for nothing.
The deeper challenge, then, is the need for political courage. Leaders must communicate that nickel is not a magic wand but part of a generational project. They must persuade citizens to value stability over sugar highs, to accept that saving is as patriotic as spending. This requires discipline in rhetoric as much as in budgets.
The courage to diversify
Zambia’s Copper Belt is not just a neighbor’s story; it is a mirror. It shows us how easily a nation can rise and fall on the back of a single resource. Copper gave Zambia pride, but also vulnerability. It made the state big, but not strong. It funded services, but hollowed out resilience.
Tanzania stands at a fork. Kabanga Nickel is a gift of geology, arriving at a moment of global transition. Managed well, it can be the lever that lifts agriculture, manufacturing, infrastructure, and services. Managed poorly, it can become the crutch that makes us stumble, a nickel monoculture replaying copper’s mistakes.
The decision is not in the rocks. It is in the rules, institutions, and narratives we choose. Will we cap fiscal dependence, build industrial linkages, diversify exports, and save for the future? Or will we spend as if nickel is forever?
The real test of Kabanga will not be measured solely by the tonnes exported or royalties collected. It will be calculated in terms of whether other sectors grew because of it, whether farmers saw better logistics, whether factories found steadier power, whether SMEs gained contracts, and whether children inherited savings rather than debt.
That is the difference between a resource lifeline and a resource lever. Zambia’s copper was the former. Tanzania’s nickel must be the latter.
