TANZANIA: GAS TIPPED TO BOOST PUBLIC SERVICES

THE government should use revenues from the extractive sector as an opportunity to increase the efficiency of public spending at the national and sub-national levels, a national forum heard in Dar es Salaam.

Participants at a benchmarking exercise for the natural resources charter organised by the Uongozi Institute noted that while it was important for the government to push for a fair share of revenues from contracts with multinational companies in the extractive sector, they also felt it was equally vital to ensure that the funds accrued help the latter improve public spending.

Yesterday's meeting aimed at getting views of development partners in Tanzania and was facilitated by retired Permanent Secretary Patrick Rutabanzibwa.

Mr Rutabanzibwa said much of the discussion's output would inform local content policy currently getting final touches. He said the public expenditure tracking report should also inform how the government utilises revenues from the industry.

When more significant gas production starts after 2022, government revenue has the potential to grow to as much as 2.5 billion US dollars per year, an amount that far exceeds foreign aid flows Yesterday's forum highlighted the need for good governance and transparency in overseeing natural resources that include minerals, oil and gas.

Mr Rutabanzibwa said there was need to ensure that the Tanzania natural resources charter programme is consistent with the country's extractive sector vision. "We need to ensure that the benchmarking informs the local content policy and public education is very important as people need to know what is going on," he urged.

The retired civil servant also pointed out that it was important to find mechanisms to mitigate disturbances caused by extractives in people's neighbourhoods He said the public systems should avoid duplication of work among institutions during designing of programmes and monitoring phase in order to save resources.

Recognising the challenges that come with the industry, the Chief Secretary Ombeni Sefue last year tasked UONGOZI Institute to lead a project that aims to improve natural resource revenue allocation decisions so that they accelerate human development gains.

Entitled the "Tanzania Natural Resource Charter Process," the work is drawing extensively on the Natural Resource Charter (NRC) framework as a tool for policy analysis and decision making.

Mr Rutabanzibwa oversaw discussions on 12 precepts of the Charter, which include resource securing the greatest benefit for citizens through an inclusive and comprehensive national strategy, a clear legal framework and competent institutions.

The Charter also notes that resource governance requires decision makers to be accountable to an informed public and that the government should encourage efficient exploration and production operations and allocate rights transparently.

Among others, it urges that tax regimes and contractual terms should enable the government to realise the full value of its resources consistent with attracting necessary investment.

It should be robust to changing circumstances and that the government should pursue opportunities for local benefits and account for, mitigate and offset the environmental and social costs of resource extraction projects.

It urges nationally-owned companies to be accountable, with well-defined mandates and an objective of commercial efficiency.