Petrostate Blog for the period 08.01.2018 to 25.01.2018

Starting our examination of news of the period in the macroeconomic field, the IMF Executive Board Completed Seventh PSI Review for Tanzania with the main conclusions:

  • Macroeconomic performance under the program has been satisfactory.
  • Most quantitative targets were met, though implementation of structural measures lagged.
  • Authorities should step up budget implementation, particularly in development spending.
  • Macroeconomic policies will need to be closely coordinated.


The Citizen however points out that the growth rate put by the IMF differs from the 7% target of the Government. The Government says that Tanzania remains among the top performers in Africa for having a steady growth rate in 2017. The economy is expected to grow by 7.0 per cent and continue to grow on average of 7.4 per cent in the medium term.


Meanwhile the Ministry of Finance and Planning, issued a public notice inviting all stakeholders to participate in the upcoming proceedings of the Task Force on Tax Reform (‘Task Force’), in preparation for the 2018/19 budget.


At the Global level, the most recent World Bank global forecasts says that economic growth will edge up to 3.1 percent in 2018 after a much stronger-than-expected 2017, as the recovery in investment, manufacturing, and trade continues. Growth in advanced economies is expected to moderate slightly to 2.2 percent in 2018, as central banks gradually remove their post-crisis accommodation and the upturn in investment growth stabilizes. Growth in emerging market and developing economies as a whole is projected to strengthen to 4.5 percent in 2018, as activity in commodity exporters continues to recover amid firming prices



Dealing with the petroleum and energy sectors we note that coal consumption was dealt another blow by the possibility of a UK ban on coal firing from 2025. The UK government has published results of a consultation into banning unabated coal-firing from 2025, and promised enabling legislation.


Also, Professor Stern reviews his hypothesis that while the gas industry needs to have a decarbonisation strategy if it is to prosper in the long term in Europe, in many other parts of the world the issue is price. In particular, in non-OECD countries gas is viewed as an expensive energy option. Although it can help to alleviate air quality problems in some cities, it needs to be affordable if demand is to grow in line with optimistic forecasts. The implication for LNG producers is that they must get costs down if a new wave of projects is to be developed.


In Tanzania, Aminex, project operator and 75% owner of the Ntorya field, has told investors that it is “actively engaged” with the Tanzanian authorities and with third-party engineering firms, in the advanced stages of planning for the Ntorya-3 well. Ntorya is an onshore gas field.


Going to the Namibian gas sector development, it seems less bright now as the Oslo-based upstream ship-owner BW Offshore has said why it deferred the Final Investment Decision on its Kudu gas offshore project.


In the international finance sector, a new study on offshore activities and money laundering has been published. The paper argues that Europe has to find its own European way of creating compliance among its member states. For this, creating transparency with regard to bank registers, beneficial ownership, tax accounts and criminal investigations is important.


Important for the future of the energy sector, Tanzania may buy another 19 electrical train sets. Tanzania will become the first country in the region to use high-speed electric cargo and passenger trains. Construction of the SGR began in April 2017 with the first phase consisting of a 205km electric railway line from the port city of Dar es Salaam to Morogoro.


Also in Tanzania, the long serving Prof. Benno Ndulu retires as BoT governor. President Dr. John Magufuli appointed Prof. Florens Luoga as Governor in October last year.


Important news from Norway are several. One noteable fact is that after years of reduced investments in the oil and gas sectors, it is now expected that upstream investment will stabilise in 2018. An increase in exploration activity is foreseen. 2017 saw a record volume of gas exports through the pipeline system from Norway’s continental shelf.


However, the hydrocarbon enthusiasts of Norway were dealt a blow by the political development in Norway as Prime Minister Erna Solberg agreed to a minority three-party coalition that will halt oil and gas exploration off the Lofoten islands in Northern Norway until 2021.


The social concern profile of the Norwegian SWF has again been raised as the central bank has excluded an LNG ship-owner and three other ship-owners from the country’s Petroleum Fund because of labour rights violations in Bangladesh and Pakistan.


In Tanzanian politics, we note that President Magufuli has ruled out an extension of the term of the president. The President “informed party members and other Tanzanians that the ongoing debate about increasing the presidential term from five to seven years displeases him,” his ruling party Chama Cha Mapinduzi (CCM) said in a statement.


Further, Africa Confidential (AF) describes the situation in Tanzania and has a number of somber predictions for the country, among them that “President Magufuli’s clampdown on political opponents and the media will continue unabated, which won’t help the economy that will continue to slow down. Also AF feels that “tax collectors will continue to squeeze domestic enterprises while foreign businesses understand that, although the regime is markedly less investor friendly than that of ex-President Jakaya Kikwete, informal negotiated settlements will remain the basis of much investment decisions and taxation. We may see investment trickling back from the non-traditional investors who are more accustomed to such approaches”. AF also warns of a particularly difficult year for women and sexual minorities who “will continue to feel the force of President Magufuli’s social conservatism”.


On the Calendar:

The 2nd International Research Conference on Sustainable Energy, Engineering, Materials and Environment (SEEME), organised by researchers from the University of Oviedo, in partnership with Theorem Conferences and Events, will take place from the 25th to the 27th of July 2018 at the Polytechnic School of Mieres, University of Oviedo (Asturias), Spain.



The Tanzania Petrostate Programme Blog is produced by the joint programme of three institutions: REPOA and the NBS in Tanzania, and CMI in Norway. The purpose of the blog is to draw attention to publications and reports on the gas and petroleum sectors, which may be of interest to researchers, politicians and the general public. The blog does not state opinions but merely links to relevant postings on the world wide web with a brief description and/or quotes of the content and opinions stated by authors.

The programme and its cooperating institutions are extremely grateful for constructive comments, advice on the blog and website as well as information on important web posting that deals with the petro sector and its role in Tanzania.

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