MAKING POSITIVE ECONOMIC IMPACTS, USING NATURAL GAS AND OIL RESOURCES IN TANZANIA
The current discovery of plenty presence of Natural Gas in Tanzania presents a unique opportunity for the government to mobilize home-generated wealth from this natural resource for sustainable development.
The entire chain of managing extractive industry resources is important—from how access to those resources is granted, to monitoring operations, to collecting taxes, to sound macroeconomic management and distribution of revenues, and to spending resources effectively for sustainable growth and poverty reduction.
The "natural gas resource bother" which have been started arising (currently Mtwara) can be avoided with the right and collaborative institutions and policies on the Resource control, governance, transparency in the utilization of resource wealth for development, preserving and optimizing the resource base, and securing equitable and intergenerational long term benefits, especially poverty reduction. these are among the many critical ingredients that should be embedded in any coherent strategy aimed at exploiting this gas resource wealth.
Analysts are generally of the view that the concentration of decision making regarding the oil and gas-sector in the hands of a few has impeded innovation, limited transparency and accountability and has allowed corruption to flourish.
Extractive Industries Transparency Initiative (EITI) which was launched to improve governance in resource
rich countries by calling for the full publication and verification of company payments and government revenues from oil, gas, and mining. Tanzania, by being a member of EITI, we must walk on this objective; it is much impressive for our national economy building strategies.
The key challenge for harnessing oil and gas resources is making the right strategic choices and synchronizing their implementation in a context that supports fiscal prudence and minimizes macroeconomic distortions. This should be backed by adequate institutional capacity and national and local level participation in oil and gas revenue management.
Given that oil and is a non-renewable resource, it is vital to reduce corruption, promote intergenerational equity, and negotiate more beneficial and Transparent contracts with oil companies. Countries receive an inadequate share of the large rents from production. This may stalk from a number of reasons, including contracts and regimes that are not designed to extract maximum rents; and oil and gas policies that are designed primarily to promote and attract investments and have not evolved with changing global dynamics and national interests. The result is the risk of negotiating long-term contracts with terms that are so heavily one-sided that revenues earned from the resource end up being far less than they otherwise could have been, benefits to the population are limited, and local communities suffer as their environment is degraded and polluted (like what is happening on mining areas) and their traditional livelihoods are threatened by the activities of companies, without any real benefits to the communities to counterbalance the negative outcomes.
Countries such as Guinea and Liberia, in more recent times have sought to revisit old contracts which were negotiated in the context of lack of capacity, secrecy and corruption and which resulted in severely disadvantageous terms for the country. Ideally, however, the goal would be to negotiate contracts with mutually beneficial terms at the outset, to avoid a later contract review and renegotiation process, which poses its own problems and challenges and can negatively affect the investment climate of a country In 2012 the Guinean government began a systematic review of contracts for the exploitation of its bauxite and iron deposits, which has been lauded by donors.
What to do
Conclusively
Sustainable development is about a better world for all citizens, underpinned by advances in skills, knowledge, capability, and choice. Oil and gas wealth must be used to achieve higher income per capita, better education, better health, higher life expectancy, full employment, and social stability The sustainable development of oil and gas resources requires policies, principles, and practices that support the utilization of resources in a manner that does not prevent Future generations from benefiting from the resources.
Mr. Lusekelo Andrew,
Founder & CEO, Lua Economic Foundation Trust. (LEFT).
The key challenge for harnessing oil and gas resources is making the right strategic choices and synchronizing their implementation in a context that supports fiscal prudence and minimizes macroeconomic distortions. This should be backed by adequate institutional capacity and national and local level participation in oil and gas revenue management.
Given that oil and is a non-renewable resource, it is vital to reduce corruption, promote intergenerational equity, and negotiate more beneficial and Transparent contracts with oil companies. Countries receive an inadequate share of the large rents from production. This may stalk from a number of reasons, including contracts and regimes that are not designed to extract maximum rents; and oil and gas policies that are designed primarily to promote and attract investments and have not evolved with changing global dynamics and national interests. The result is the risk of negotiating long-term contracts with terms that are so heavily one-sided that revenues earned from the resource end up being far less than they otherwise could have been, benefits to the population are limited, and local communities suffer as their environment is degraded and polluted (like what is happening on mining areas) and their traditional livelihoods are threatened by the activities of companies, without any real benefits to the communities to counterbalance the negative outcomes.
Countries such as Guinea and Liberia, in more recent times have sought to revisit old contracts which were negotiated in the context of lack of capacity, secrecy and corruption and which resulted in severely disadvantageous terms for the country. Ideally, however, the goal would be to negotiate contracts with mutually beneficial terms at the outset, to avoid a later contract review and renegotiation process, which poses its own problems and challenges and can negatively affect the investment climate of a country In 2012 the Guinean government began a systematic review of contracts for the exploitation of its bauxite and iron deposits, which has been lauded by donors.
What to do
Conclusively
Sustainable development is about a better world for all citizens, underpinned by advances in skills, knowledge, capability, and choice. Oil and gas wealth must be used to achieve higher income per capita, better education, better health, higher life expectancy, full employment, and social stability The sustainable development of oil and gas resources requires policies, principles, and practices that support the utilization of resources in a manner that does not prevent Future generations from benefiting from the resources.
Mr. Lusekelo Andrew,
Founder & CEO, Lua Economic Foundation Trust. (LEFT).
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