Opportunities and Challenges for the Extraction of Natural Gas in Tanzania: The Imperative of Adequate Preparedness

Abstract

This paper identifies areas which need adequate preparation in order to ensure that the extraction of natural gas becomes the main driver for inclusive and sustainable growth and development in Tanzania, including reduction in donor dependence. The preparedness package includes ensuring that: fiscal regime to capture rent is in place, requisite human resources are made available and developed, savings are invested in the domestic economy, ownership is on joint-venture basis to encourage high retention rates in the domestic economy, up-stream unfolding of industries is encouraged (value-addition), contract negotiation capacities are strengthened, the negotiation processes are transparent and consultative, local community benefit effectively from the resource, the investment in other non-gas sectors (e.g. agriculture and manufacturing) is scaledup, and politicians rise above their party interests so that they contribute  positively towards the development of the natural gas sector and policy making process.

Keywords: extraction of natural gas, challenges, opportunities, Tanzania