Tanzania has recently discovered huge offshore natural gas fields. This has led the Government to develop local content policies (LCPs) to increase job and business opportunities for nationals in the sector. We study the process behind the development of these policies and the positions of stakeholders. We find that although there is a positive view among domestic stakeholders of imposing such policies, there is much suspicion–to such a degree that it shapes their recommendations of which policies to include in the LCP. One reason is that the Government monopolized the policy development process and abstained from conducting a consultative process. Our findings suggest that future Tanzanian policy development should include in-depth consultations to maximize the decision maker’s knowledge base, add to the transparency of the process and manage expectations. This would also contribute to effective implementation and lessen tensions, conflicts and suspicion among stakeholders.
All posts by Åse Dahl
Presenting at the TrAcRevenues workshop
24 and 25 August, Ingrid Hoem Sjursen (Choice Lab, NHH), Kendra Dupuy (CMI/U4) and Odd-Helge Fjeldstad (CMI/ATI) participated at the TrAcRevenues Workshop: Transparency and Accountability in Managing High-Value Natural Resources. Norwegian University of Science and Technology (NTNU) in Trondheim. The Transparency and Accountability in Managing High-Value Natural Resource Revenues (TrAcRevenues) is an initiative that examines how increased transparency can help to transform natural resource revenues in developing countries into a blessing rather than a curse.
The workshop was organized by Prof Päivi Lujala, Dept. of Geography, and gathered about 25 scholars from Europe, Africa, Asia and the US, including Michael Ross (Dept. of Political Science, UCLA) and Ragnar Torvik (Dept of Economics, NTNU).
Odd-Helge Fjeldstad presented the research programme ‘Tanzania as a future petro-state’ (2014-19), including ongoing activities and findings so far. Kendra Dupuy presented a new study titled “The global participation backlash: Implications for multistakeholder natural resource governance initiatives”. The study focused on new legislations in an increasing number of countries that put major constraints on civil society and international NGOs’ work in these countries. The discussion also briefly addressed possible implications for independent research on natural resource governance.
Ingrid Hoem Sjursen presented a new paper titled “Managing the resource curse” (joint with The Choice Lab researchers Alexander Cappelen, Bertil Tungodden and Odd-Helge Fjeldstad (CMI) and Donald Mmari (REPOA)). The key research question addressed was: “Does expectations about future gas revenues affect citizens’ attitude toward a tax increase, expectations about future corruption and trust in the government?”
Petroleum fund in Tanzania? Other alternatives may be better
The Government of Tanzania is looking for the best policies and institutional designs to turn future petroleum revenues into welfare, development and jobs. This Brief from the petro-state programme argues that the Tanzanian society will benefit more by investing in infrastructure, health and education, rather than establishing a petroleum sovereign wealth fund and investing in foreign assets.
Should Tanzania establish a sovereign wealth fund?
Many natural resource abundant countries have established sovereign wealth funds as part of their strategy of managing the resource wealth. This working paper by Ragnar Torvik looks into different arguments used as reasons to establish such funds, discuss how these funds are organized, and draw some policy lessons. The paper then develops a theory of how petroleum funds may affect the economic and political equilibrium of an economy, and how this depends on initial institutions. A challenge with petroleum funds is that they may produce economic and political incentives that undermines their potential benefits. In conclusion, the paper suggests that the best way to manage the petroleum wealth of Tanzania may not be to establish a sovereign wealth fund, but rather use revenues to invest domestically in sectors such as infrastructure, education and health. Such investments may produce a better economic, as well as institutional, development.
Not so great expectations: Gas revenue, corruption and willingness to pay tax in Tanzania
Huge reservoirs of natural gas have been discovered offshore the southern coast of Tanzania. There are high expectations that exploitation of natural resources will substantially increase Tanzania’s national income. This brief presents results from a recent survey experiment of 3000 respondents in Dar es Salaam, Mtwara gas revenue causally increase expectations about corruption, it has no effect on willingness to pay tax. We argue that successful handling of the gas discoveries should include strategies to keep people’s expectations about future gas revenues realistic and to strengthen the control of corruption.
Not so great expectations: Gas revenue, corruption and willingness to pay tax in Tanzania
REPOA 21st Annual Research Workshop
Wednesday 6th and Thursday 7th April, 2016
at Ledger Plaza Hotel, Dar es Salaam
REPOA welcomes you to its 21st Annual Research Workshop.
Since its inception, REPOA has been organizing the Annual Research Workshop to recognize the importance of taking the opportunity for such a forum to deliberate on broader research and policy issues. The theme for this year’s workshop is “Making Industrialization Work for Socio-Economic Transformation”.
Local content in the Tanzanian mining sector
This brief examines the factors that have influenced local content in the Tanzanian mining sector, and some of the challenges and successes of local content initiatives in mining. Local content has gradually gained momentum over the last ten years, both among government bodies, companies, and civil society organizations. We argue that there has been a focus on quantity rather than quality in the reporting of local content, that there is a need for stronger regulation of local suppliers to make them adhere to ethical standards, but also that investment in training and local cooperatives can be beneficial for both corporations and host communities.
Programme report: Local content in the Tanzanian mining sector
Call for oil and gas professionals credentials
In order to develop an Oil and Gas Professionals Data Base (OGPDB) to act as a tool for employment opportunities search, the Ministry of Energy and Minerals invites applications from Oil and Gas qualified Tanzanians.
Tanzania finalises land deal for delayed LNG project
BG Group, being acquired by Royal Dutch Shell, along with Statoil, Exxon Mobil and Ophir Energy plan to build the onshore LNG export terminal in partnership with the state-run Tanzania Petroleum Development Corporation (TPDC). They aim to start it up in the early 2020s. But their final investment decision has in part been held up by delays in finalising issues related to the site.
Tanzania said on Friday it had finalised a land acquisition for the site of a planned liquefied natural gas (LNG) plant and was now working to compensate and resettle villagers to move forward on a long-delayed project.
Non-resource taxation in a resource rich setting: A broader tax base will enhance tax compliance in Tanzania
Huge reservoirs of natural gas have been discovered offshore the southern coast of Tanzania. The country might become a large producer of gas, and a potential exporter of liquefied natural gas (LNG) during the next decades. With this comes the promise of significant petro-revenues and prospects of natural gas-driven structural transformation, bringing with it improved economic and social conditions for the people of Tanzania. However, experiences from other countries suggest that it is challenging to turn natural resource wealth into improved welfare for the majority of citizens. In this brief, we focus on challenges related to the management of government revenues, particularly tax. We argue that continued efforts to expand the non-resource tax base is essential for successful management of the resource wealth.