THE FUTURE OF TANZANIA-ECONOMIST

About the NATIONAL NATURAL
GAS POLICY which was released
on October, 2013.
As Tanzania takes the
Transformation from the Climatic-
base economy to Natural resource-
base economy I.e Natural Gas and
Oil, we need a good and strong
Policy which will lead us to the
Effective Management of the
Development and Extraction of
these Resources for a Sustainable
and Inclusive Socio-Economic
Impact as these resources are very
burgeoning wealth and they are
associated with "Dutch Diseases".
(Profits from the Natural Gas are
not quick-profit, it can take even
30 years or more to enjoy the profit
of Gas resource, therefore we need
a good policy which can make us
to sustain after those 30 yrs).
The policy has been released by
the MEM and the Natural Gas Act is
just around..By linking the Policy
and the Natural Gas Value Chain,
the policy has based only on the
Midstream and Downstream
segment of the Natural Gas value
chain and ignoring/left the
Upstream segment..I think the
policy will only be useful if the
upstream element is added so as
Tanzania and its people to benefit
from the Natural Gas resource right
from the beginning. In many
successful countries, upstream
activities are the most guided to
ensure local business capacities
are built. They do this through
National Oil & Gas Companies
which are actively supported by the
government to conduct flourishing
exploration, development and
value-addition activities as well as
actual trading e.g Botswana, Brazil,
China etc. Unfortunately, Tanzania
we have only TPDC which primarily
dealing with Oil but now is dealing
with both, Oil and Gas..I think also
it is very important to have an
organ dealing with Natural Gas
only.
Look here...,With the gas price
based on a benchmark oil price of
US$120 per barrel, LNG (Liquified
Natural Gas) export revenues
would average more than US$8
billion per annum over the project
period of 30 years. In the event,
Tanzania's balance of payments
would improve significantly, and
the Tanzania Shilling should
considerably appreciate in value. In
due course of time and events the
Government would also be in a
better position to undertake
investments in the public good
without dependence on foreign aid,
oroperating on punitive fiscal
deficit budgets.
THEREFORE, Leaving out upstream
activities tends to create and
perpetuate illicit outflow of
financial proceeds from the natural
gas Industry as the local content
and participation are minimized.