Can Smallholders benefit from the new market opportunities from the extractive industry in Tanzania?
This paper is a baseline Report for an impact study of the project:
“Food Value Chain Development for Gas and Mining Industry in Southern Tanzania”
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This paper deals with needs and availability of data, statistics and information in Tanzania. It relates to a five-year (2014–19) research programme on prospects and challenges for the petroleum sector.
The main objectives are
- to present a brief analysis based on data which is accessible at present and
- to sketch a structure for the Tanzania Petro Data Hub
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Tanzania has recently discovered large petroleum and natural gas reserves, boosting its natural resource stocks and potential future revenue flows. Whether the country’s petroleum resources will translate into economic development will be determined by the institutions that the government puts into place to govern the petroleum sector, to include the legal institutions. This study reviews the most important provisions of the new legislative framework that the government has recently adopted to govern this newfound wealth. We examine the institutions and actors created by the legislation as well as the opportunities and challenges that may emerge in its future implementation. Specifically, we analyse the petro-sector institutions that the legislation creates and the types of authorities granted to them; the institutional constraints placed on authorities; the interaction between institutions; potential institutional overlaps, conflicts and gaps; and transparency and accountability mechanisms. Read the paper here
Bryan Lee and Kendra Dupuy. 2017. Understanding the lay of the land: An institutional analysis of petro-governance in Tanzania. Published in Journal of Energy & Natural Resource Law. https://doi.org/10.1080/02646811.2017.1325630
Fjeldstad, Odd-Helge and Johnsøn, Jesper. 2017. Governance challenges in Tanzania’s natural gas sector: unregulated lobbyism and uncoordinated policy. Chapter 3 (pp. 44-57) in Aled Williams and Philippe le Billon (eds.) Corruption, natural resources and development: from resource curse to political ecology. Edward Elgar Publishing. http://www.e-elgar.com/shop/corruption-naturalresources-and-development
This paper examines the genesis of national oil companies (NOCs) and the political economy underpinning the diverse forms in which they are structured and operate. It also examines how they contribute to the development needs of the countries that have established them. The paper draws mainly from a desk review of relevant literature, institutional records and interviews from selected knowledgeable informants, and it aims to promote informed dialogue on this subject that has caught the attention of stakeholders in Tanzania in recent years following the discovery of a substantial amount of natural gas in the deep sea. The underlying proposition is that the benefits of hydrocarbon to the country can be maximized when a NOC exists, but it must operate within a robust institutional framework. As the case studies demonstrate, the robustness of the institutional framework, in turn, depends on the historical trajectory, broader institutional landscape and political economy underpinning the country’s development path. The authors argue that the Tanzanian NOC has vast potential for contributing to economic transformation in the country given the vast hydrocarbon resources, provided that the proper institutional and policy conditions are put in place.
The report Strategic Significance of National Oil Companies: Lessons for Tanzania is available here
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.
Read our latest working paper in full text
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.
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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.
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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