WILL TANZANIA’S NATURAL GAS ENDOWMENT GENERATE SUSTAINABLE DEVELOPMENT?

Tanzania possesses estimated natural gas reserves of roughly 60 TCF, with the potential to generate up to $6 billion in annual revenue. While the country has established formal governance frameworks, including the Petroleum Act and the Tanzania Extractive Industries Transparency and Accountability Act, the paper argues that the actual impact on development depends on the political will to combat 'grand corruption' and the ability of civil society to hold the ruling coalition accountable. The author warns that windfall rents could incentivize elite predation and weaken the state's incentive to maintain a broad tax base, potentially destabilizing the political equilibrium.

• Tanzania's total estimated natural gas reserves are approximately 60 TCF, which could potentially generate annual revenues of up to $6 billion.
• The planned liquefied natural gas (LNG) export terminal is valued at an estimated $30 billion, though regulatory instability and local ownership uncertainty may delay a final investment decision for five years or push the project back to 2026.
• Tanzania's electricity sector faces significant challenges, with only 1,500MW of installed capacity and a state-run utility, TANESCO, that is a 'cash-strapped monopoly' often failing to pay private providers.
• The author suggests that investing in solar PV plants may be a more strategic development choice than large-scale LNG infrastructure, as costs are falling and it would more effectively increase electricity access.
• There is a risk that natural gas rents will entrench 'grand corruption' and increase competition among factions of the ruling party, Chama Cha Mapinduzi (CCM), unless the government can contain these effects.
• Tanzania's civil society is described as relatively weak and often dependent on foreign donors, lacking the necessary advocacy and lobbying skills to effectively confront the state.
• The government has introduced several de jure institutions to improve transparency, including the Petroleum Act, the Oil and Gas Revenue Management Fund Act, and the Tanzania Extractive Industries Transparency and Accountability Act (TEITI).
• A significant governance gap exists because the requirement for contracts to be made public under new legislation does not apply retroactively to existing gas concessions.
• The author notes that the ratio of gas to tax revenue for Tanzania (estimated at 1.3 to 1.4) is lower than in other resource-rich African nations like Gabon, Angola, and Liberia, which may reduce the immediate temptation for predation.

APA

HARVEY, R. (2017). WILL TANZANIA’S NATURAL GAS ENDOWMENT GENERATE SUSTAINABLE DEVELOPMENT? South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2017/07/Occasional-Paper-264.pdf

Chicago

HARVEY, ROSS. WILL TANZANIA’S NATURAL GAS ENDOWMENT GENERATE SUSTAINABLE DEVELOPMENT? South African Institute of International Affairs, 2017. https://saiia.org.za/wp-content/uploads/2017/07/Occasional-Paper-264.pdf.

Wikipedia

{{cite report |last1=HARVEY |first1=ROSS |title=WILL TANZANIA’S NATURAL GAS ENDOWMENT GENERATE SUSTAINABLE DEVELOPMENT? |publisher=South African Institute of International Affairs |date=June 2017 |url=https://saiia.org.za/wp-content/uploads/2017/07/Occasional-Paper-264.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{harvey2017will, author = {HARVEY, ROSS}, title = {{WILL TANZANIA’S NATURAL GAS ENDOWMENT GENERATE SUSTAINABLE DEVELOPMENT?}}, institution = {South African Institute of International Affairs}, year = {2017}, month = jun, url = {https://saiia.org.za/wp-content/uploads/2017/07/Occasional-Paper-264.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }