Tanzania Natural Gas Revenue Fund

The Natural Gas Revenue Fund (NGRF) is the proposed Sovereign Wealth Fund of Tanzania. According to Tanzanian President Jakaya Kikwete, the government was formulating legislation for the fund's establishment whose bill would be tabled in parliament once completed. The NGRF will be set up for the management of revenues accruing from the country’s emerging gas industry. With the creation of the NGRF Tanzania will follow the example of more than 20 countries which by August 2013 had inaugurated different models of Sovereign Wealth Funds governing revenue from their extractive industries.

Background
TheNational Natural Gas Policy of Tanzania prepared by the Tanzanian Ministry of Energy and Minerals and endorsed by the Tanzanian cabinet in October 2013, establishes the NGRF. The ministry’s policy statement stipulates that the NGRF will be set up to “ensure transparency and accountability over collection, allocation, expenditure and management of all natural gas revenues.” It further states that “clear guidelines shall be developed transparently or through national dialogue on the optimum short-term and long-term use of the fund.” In addition, it emphasises that the management of the natural gas revenue spending shall be in line with national development plans and strategies. The NGRF is expected to hold revenue extracted from the gas industry in trust for investments in other sectors of the economy, as well as finance socio-economic development and realize savings for future generations. According to President Kikwete, once the fund is established, there will be annual legislative debates about the percentage of the NGRF’s revenue to be channelled into the national budget.

Administration
The NGRF will be managed and administered by the Bank of Tanzania. Additionally, the NGRF will be audited by a special unit of the Tanzanian government expected to be established in 2015 in order to monitor natural resource revenues.

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