BROOKINGS INSTITUTION, WASHINGTON DC, 20BROOKINGS INSTITUTION, WASHINGTON DC, 20THTH FEB, 2014 FEB, 2014

HONEST PROSPER NGOWI; HONEST PROSPER NGOWI; pngowi2002@yahoo.com

+255 754 653 740; MZUMBE UNIVERSITY, TANZANIA+255 754 653 740; MZUMBE UNIVERSITY, TANZANIA

1

  Converting Future Gas Revenues Into Pro-poor Development: Approaches, Challenges and Solutions in Tanzania

1

Introduction/Context Introduction/Context

Continuous discoveries of commercial quantities of Continuous discoveries of commercial quantities of natural gas and possiblly oil in Tanzanianatural gas and possiblly oil in Tanzania

Over 20 companies on the ground in Tanzania, Over 20 companies on the ground in Tanzania, especially Mtwara, Lindi and Coast regionsespecially Mtwara, Lindi and Coast regions

National Natural Gas Policy October 2013 National Natural Gas Policy October 2013 Construction of gas pipeline (530km) Mtwara to Dar Construction of gas pipeline (530km) Mtwara to Dar 44thth round of exploration bidding in late 2014 round of exploration bidding in late 2014 Vibrant debate on various oil and gas issues: CSOs, Vibrant debate on various oil and gas issues: CSOs,

academia, media, religious leaders, general publicacademia, media, religious leaders, general public

From Revenues to Pro-poor From Revenues to Pro-poor Development: The How QuestionDevelopment: The How Question

Investment in human capital: education, health and Investment in human capital: education, health and other social sectors ... Social security etcother social sectors ... Social security etc

Invest in economic infrastructure of significance to Invest in economic infrastructure of significance to the poor: rural transport & communication the poor: rural transport & communication infrastructureinfrastructure

Distribution and re-distribution through fiscal Distribution and re-distribution through fiscal measures: pro-poor subsidies & taxationmeasures: pro-poor subsidies & taxation

More pro-poor budgetary allocations More pro-poor budgetary allocations

Revenues for pro-poor developmentRevenues for pro-poor development Revenue sharing with local governments: Local Revenue sharing with local governments: Local

pro-poor development expenditurepro-poor development expenditure Direct cash transfer – conditional/unconditionalDirect cash transfer – conditional/unconditional Capitalization of pro-poor financial institutions – Capitalization of pro-poor financial institutions –

banks, MFIs (eg agric bank for smallholders)banks, MFIs (eg agric bank for smallholders) Inter-generational thinking/investments: oil and Inter-generational thinking/investments: oil and

gas fundgas fund Pro-poor CSRs from investorsPro-poor CSRs from investors

Challenges & SolutionsChallenges & Solutions

High expectations: Be realisticHigh expectations: Be realistic Uncertain future revenues: Forecast scenariosUncertain future revenues: Forecast scenarios Many promises, Many demands: PrioritizeMany promises, Many demands: Prioritize Decions/agreeents on proportion of income to be Decions/agreeents on proportion of income to be

consumed, saved and investedconsumed, saved and invested Determining fair share of resources allocation in Determining fair share of resources allocation in

the short, medium and long term: Strike a balancethe short, medium and long term: Strike a balance Absorption capacity/Inflationary challengesAbsorption capacity/Inflationary challenges

Challenges & solutionsChallenges & solutions

Resource curseResource curse Revenue volatility: Smooth it, futures contractsRevenue volatility: Smooth it, futures contracts Government capacity to deliver: PPP, but is Government capacity to deliver: PPP, but is

private sector adequate? private sector adequate? Which group of the poor – Geography (whole Which group of the poor – Geography (whole

country), demographics: age, gender: Consider country), demographics: age, gender: Consider allall

More solutionsMore solutions

Learn from best and bad practicesLearn from best and bad practices

The End, Thank You AllThe End, Thank You All