Tanzania as a Future Petro-State: Prospects and Challenges. A programme for research, capacity building and policy dialogue

Transcription

1 Tanzania as a Future Petro-State: Prospects and Challenges A programme for research, capacity building and policy dialogue

2 Rich in natural resources: Forestry Fisheries Wildlife Minerals Petroleum (gas) Helium

3 Huge prospects for natural gas extraction offshore - deep sea drilling - Total confirmed offshore gas reserves: 57 trillion cubic feet Petroleum companies invested almost USD 5 billion so far Teknisk Ukeblad, 5. april 2013

4 Offshore gas LNG-plant Export Shell, Statoil, Exxon Mobil and Ophir Energy + Tanzania Petroleum Development Corp (TPDC) Plan to build the onshore LNG export terminal in Lindi, southern Tanzania

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7 Outline Motivation and objectives of the programme Programme elements Research components Progress to date 7

8 Motivation and objectives Motivation: How to avoid the resource curse? Tanzania must avoid becoming a new Nigeria Concerns based on experiences from mining and onshore gas Objectives: Document changes over time in the socio-economic landscape Enhance the empirical understanding of key prospects and challenges facing Tanzania as a new petro-state Provide contextualized and evidence-based policy analysis Contribute to develop research capacity Contribute to informed policy making and public debate 8

9 Structure of the programme Tanzania as a future petro-state Research Capacity building Policy dialogue Institutional Individual Public debates Publications Stakeholders Media

10 Research components 1. Data for Policy Making and Public Engagement Purpose: Statistical resources and indicators Data support to other components Establish a baseline for essential statistics Systematic collection of data Activities: Availability and gap study of data for research & policy analysis Web based open access system for data search, monitoring and dissemination Training in statistical methods and econometrics 10

11 2. Lessons from Mining & Onshore Gas Bulyanhulu Mine (gold, silver, copper) Geita Gold Mine Songo Songo Gas Plant Mtwara to Dar es Salaam pipeline 11

12 2. Lessons from Mining & Onshore Gas (cont.) Issues and research questions: What are the experiences with local content in mining? Methodology: Qualitative: Interviews, reports, legislation, process analysis Findings: The 2010 Mining Act has soft and unbinding requirements on local content Large scale suppliers are politically connected Discontent with mining s contribution to the national economy has contributed to resource nationalism in the petro-sector influenced the new petro-legislations put in place in

13 3. Revenue and Expenditure Management Issues and research questions: 1) Intra-governmental fiscal relations Factors facilitating and/or impeding coordination in the public sector when designing and implementing fiscal policies? 2) Public-private sector interactions Role of interest groups in shaping petroleum legislation? Method 1) & 2): Analysed the process behind the new petro-legislations Findings: Uncoordinated policy positions and competition between public authorities provided multiple entry points for interest groups Local business community lobbied successfully for strong local content requirements IOCs did not actively lobby at the legislative level 13

14 3. Revenue and Expenditure Management (cont.) 3) Public expectations and willingness to pay taxes Research question: Does expectations about future gas revenues affect citizens attitude toward a tax increase, expectations about future corruption and trust in the government? Method: Randomized survey experiment of 3004 household members Use informational videos to generate exogenous variation in expectations about future gas revenues Findings: Evidence of causal effect of expectations about gas revenues on corruption No effect on attitude towards a tax increase and trust in government

15 3. Revenue and Expenditure Management (cont.) 4) Should Tanzania establish a petroleum fund? Approach: Review of arguments for SWFs and experiences from other countries Theory of how petroleum funds may affect the economic and political equilibrium of an economy, and how this depends on initial institutions Conclusions: Establishing a petroleum fund in a weakly institutionalized setting may produce perverse incentives for: o entrepreneurs to engage in rent-seeking o politicians to weaken rather than strengthen institutional quality Investing in infrastructure, human capital, and health creates incentives for production rather than rent-seeking may improve institutional quality These arguments calls for Tanzania not to establish a petroleum fund, but rather use incomes from natural gas domestically

16 4. Local Content for the Oil and Gas Industry Among the most important tools for extracting additional benefits to the local communities of foreign investments in the oil and gas sector, beyond the direct effects (tax revenue, employment etc.), has been to develop policies for local content requirements (Davis & Ellis 2007) 16

17 4. Local Content for the Oil and Gas Industry (cont.) Main issues and research questions: 1) The development of local content policy How was it developed? The influence of domestic stakeholders? Methodology: Interviews with stakeholders/process analysis Findings: General support among domestic stakeholders to local content requirements General distrust against local enterprises rent-seeking Distrust in the motives of the multinational organizations (esp. World Bank) Distrust in the government s will and ability to implement the LCP 2) Effects of the local content policy (baseline Nov 2016) What activities are initiated to create local economic activity beyond the core resource extraction operations? What are the impacts of these activities in the communities? 17

18 5. Governance in the petro-state Managing expectations

19 Managing expectations Tanzania Mtwara gas riots (May 2013) Mtwara High Court in ruins (25 May 2016)

20 5. Governance in the petro-state (cont.) Main issues and research questions: 1) Public expectations: Does the political discourse affect trust, corruption, and civil unrest? Method: Survey experiment covering 3000 respondents (Oct 2016) Pilot (300 resp, May 2016): o Trust and corruption generally not affected by the political discourses o Acceptance of violence substantially reduced when citizens are exposed to a pro regionalist discourse and/or a high expectations discourse 2) Interest groups and policy change: the role of CSOs How do lobby efforts manifest themselves in petro-policies? What are the visible effects of the CSOs lobby activities? 20

21 Progress to date Research 4 completed studies ( peer reviewed articles) 6 ongoing studies Capacity building Recruitment of Master students and PhD-researchers Training courses in survey and experimental methods Communication and dissemination Stakeholder consultations and policy dialogues Publications and dissemination o Academic papers, WPs, policy briefs, interactive webpage, research seminars/conferences, public meetings, media Potential for collaborative research, e.g. comparative studies Tanzania and other African countries (e.g. Ghana, Mozambique)

22 Visit the programme website: