THE 2017 Resource Governance Index, compiled by the Natural Resource Governance Institute (NRGI), gave Tanzania’s oil and gas sector a weak overall score of 53 out of 100 points due to weak implementation of the oversight laws.
The NRGI’s East and Southern Africa/Tanzania manager Silas Olan’g said this is translating to a rank of 36th among the index’s 89 sector-specific countrylevel assessments.
“Tanzania has not yet started largescale production following the discovery of significant offshore gas but if governance can be improved, the gas industry has the potential to deliver significant benefits to one of the world’s fastest growing populations,” he said.
Tanzania governs value realization from natural gas and minerals better than it manages the resulting revenues, researchers found. The index’s value realization component measures the potential for good governance in licensing, local impacts and state participation.
In the licensing category, Tanzania’s oil and gas sector scores 48 of 100 points and ranks 27th–well behind the index’s top performer Mozambique, which gets a score of 72 of 100.
This weak result is mainly due to the absence of an external body tasked with overseeing compliance with Tanzania’s 2015 Petroleum Act, which is poorly implemented.
Tanzania’s performance in hydrocarbons revenue management is weaker than that of other new oil and gas producers like Ghana, Mozambique and Uganda.
In comparison, Tanzania’s mature mining sector ranks 42nd among the index’s 89 extractive country assessments, and 18th among 34 mining sector assessments.
Concerns over distribution of benefits between investors, the government and local communities have led the Tanzanian government to take steps towards improving governance and transparency.
However, the index results point to a need to close the gap between legal requirements and actual enforcement across several areas. Reforms are needed in control of corruption and in government effectiveness–as recognized by the current administration.
Social and environmental concerns need attention, particularly in terms of local impact. And the public should be able to access contracts between the government and resource extracting companies as required by TEITA Act 2015.
He added, “There is much to be done to improve Tanzania’s oversight of its mining industry. Tanzania is Africa’s fourth-largest gold producer, and the industry needs strong governance and a transparent framework.