National Natural Gas Policy of Tanzania

Tanzania has been exploring for oil and gas for more than 60 years now. The first natural gas discovery was made on the Songo Songo Island in 1974. This was followed by another discovery in Mnazi Bay in 1982. Thirty years later, in 2004, Songo Songo went commercial followed by Mnazi Bay in 2006. From 2010, there have been significant gas discoveries both onshore and offshore. These developments – commercialisation of Songo Songo and Mnazi Bay as well as significant gas discoveries – raised one critical question, and that was: How could the government manage the fast growing industry? The answer to this question was the drafting of the National Natural Gas Policy of Tanzania. The policy was approved by the Cabinet on 10th October 2013.

Policy Pillars
The policy which is aligned with the Five Year Development Plan (2011/12-2015/16), the National Strategy for Growth and Reduction of Poverty (2010-2015), and other sectoral and cross-sectoral policies is premised on five pillars:


 * Maximum benefits to the Government and the Citizens
 * Development and strengthening of institutional framework and human capacity in the natural gas sector
 * Transparency and accountability
 * Presence of adequate disaster management systems to prevent and protect people’s health, safety and environment, and
 * Integration of natural gas sector in the wider economy for socio-economic transformation

Policy Objectives
The policy is guided by 15 specific objectives. They, among others, include: developing facilities for the natural gas processing, liquefaction, transportation, storage and distribution; ensuring natural gas revenue is managed transparently, effectively and efficiently; promoting linkages between the natural gas industry with other strategic sectors of the economy; ensuring the government and citizens have sufficient capacity to participate effectively in the natural gas value chain; promoting, monitoring and evaluating transparency and accountability in the natural gas industry; and to sufficiently and effectively manage public expectations on benefits emanating from the industry.

Focus
Although the natural gas operations involves three phases which are upstream, midstream and downstream, the policy delimits itself to midstream and downstream operations. The upstream activities will be guided by a separate policy. This, to some commentators, seems to leave the country on the losing side as the inclusion of the upstream operations (exploration, appraisal, development and production stages) in the policy would have enabled the country and its citizens to participate and benefit from the natural gas right from the inception stage.

Natural Gas Revenue Fund
To ensure effective management of gas revenues, transparency and accountability, the policy proposes the establishment of the Natural Gas Revenue Fund. According to the then Deputy Minister for Energy and Minerals, George Simbachaweni, who now heads the ministry, the government does not plan to take all the money from the gas sector to the Treasury as was with the proceeds from mining sector. “The proceeds from the natural gas will be set aside and put into the fund and it will be up to Tanzanians to decide what to prioritize when utilising the money accrued. In this way, citizens will link development directly with the natural gas. According to the policy document, once established, the fund will be managed by the Bank of Tanzania (BoT).

Proposed Legislations and Amendment
To ensure effective and efficient management of the natural gas sector, the policy calls for a strengthening of fiscal, legal and regulatory framework. This encompasses the enactment of specific legislations including Natural Gas and Regulations and Natural Gas Revenue Management as well as the amendment of the Income Tax Act (Cap.332) and EWURA Act (Cap.414).

Institutional Framework
The policy recognises the importance of key players for operationalising, enforcing, monitoring and evaluating the gas sector in the country to ensure desired outcomes. It identifies the Central Government, Local Government Authorities, National Oil and Gas Company, Regulatory Authority, Bank of Tanzania (BoT), Private Sector, Academic and Research Institutions, Media, Civil Societies and Communities as key institutions to that effect. =References=