Gas discoveries poised to tone up economy within 12 years

Tanzania’s economy is projected to start accelerating at the rate of 15.3 per cent annually within the next 12 years, following massive off shore discovery of natural gas in the country, it was said in Dar es Salaam on Thursday.

The Governor of the Bank of Tanzania (BoT), Prof Benno Ndulu, said the country’s current proven reserves stood at 55 trillion cubic feet (tcf), while construction of a liquefied natural gas (LNG) plant was scheduled to be undertaken between 2017 and 2022.

In his presentation at the launch of Breakfast Series Meetings on “Preparing for Gas Economy,” organised by Ms Rex Attorneys, Prof Ndulu said Tanzania stands to register tremendous prosperity with gas economy.

“Based on current estimates and under favourable global prices, gas production might add to government coffers about 3-4 billion US dollars (nearly 5.5 – 7.4tri/-) per annum,” the governor said.

Prof Ndulu, however, pointed out that natural gas ‘is not forever’ and at one point in future the wells would completely dry up, stressing the need for prudent policies and judicious use of proceeds for diversifying the economy.

“The amount of gas discovered is finite. Once exploitation starts the current known reserves are expected to last for approximately 25 – 30 years…but further discoveries may extend the life period of exploitation,” he said.

Prof Ndulu said natural gas alone would not meet the current twin challenges of employment and sustained growth. He pointed out that in order for Tanzania to realise its goal of attaining middle income status by 2025 (Vision 2025), the country needed a diversified economy.

“This should be an economy with some natural resources, some industries, some services and increasingly productive agricultural sector. “We must therefore focus on utilisation of gas revenue to diversify the economy and create capacity for sustainable growth and for future generations, as well as exploiting forward and backward linkages,” he explained.

He further said that the natural gas available was sufficient to satisfy domestic demand and exports to some neighbouring and Asian countries.

Prof Ndulu allayed fears of inevitable resource curse following massive discovery of off-shore natural gas fields, saying with good policies, resources can be equitably and prudently shared.

He listed Botswana and Malaysia among the success stories. “Resource curse is not a pre-ordained phenomenon it can always be avoided,” he said.

Source: Daily News