Here is How Tanzania is Planning National Participation in Oil and gas Industry

History has taught humanity that a country can have enormous natural resources, but fare badly economically. Sometimes a country endowed with natural resources can miss out completely on all or part of the resources.

Then natural resources become a curse! In the heat of discoveries, sometimes manufacturing and agriculture sectors are forgotten. This happens especially when a country discovers huge deposits of natural resources such as gas and oil and concentrates on the discoveries forgetting sectors such as manufacturing and agriculture.

One may have heard about a catchphrase called ‘Dutch disease’. This slogan was coined to explain such a situation by the Economist newspaper in 1977. The newspaper used the catchphrase to describe the manufacturing decline in The Netherlands after the discovery of gas in the early 1960s. Thereafter the slogan became popular. Economists say that the ‘disease’ is very harmful when wealth is concentrated in the hands of a few billionaires.

When there is unequal distribution of income or wealth accrued from exploitation of the natural resources all forms of unrest emerge as a natural consequence. Sometimes armed revolt emerges. It is for this reason that the Tanzania National Economic Empowerment Council (NEEC) is about to prepare and coordinate what it calls a sector level strategy on local content. Local content is described by experts as participation and inclusiveness of Tanzanians in projects or investment taking place in Tanzania.

Experts maintain that local content will make Tanzanians benefit truly from the projects and ensure added values are retained in the country. The sector level strategy on local content seeks to empower and make Tanzanians active participants in the national economic building endeavors.

The strategy will cover all major sectors in the country and incorporate education component. In other words the local content policy was conceived by Tanzania to avert what has come to be known as natural resources curse.

Speaking after the Local Content Forum in Dar es Salaam recently, the NEEC Executive Secretary, Beng’i Issa said that at the moment the effort is directed towards entrenchment of inclusiveness of Tanzanians and simultaneously get information as a necessary step towards implementation of the local content policy.

“We will make sure that all public and private sectors appoint local content coordinators and do so quickly to enable the government get information from various sectors,” she says. She also said that the Local Content Forum, held recently in Dar es Salaam, was told that NEEC will do baseline studies to know the extent of Tanzanians’ participation in priority sectors.

The studies will help the council to formulate recommendations relating to policy, laws and regulations present the recommendations to the government. Permanent Secretary in the Prime Minister’s Office, Uledi Musa, told the forum that citizens’ participation in the national economy means empowering them to become more productive.

Uledi said empowerment must cover education, management and capital.

“We must have a quality labour force,” he said, adding that the nation’s natural resources must benefit the nation. He also called for a change in mindset, urging Tanzanians to invest in profitable economic ventures for their own good and the country at large.

Dr Aggrey Mulimuka, President of Association of Tanzania Employers (ATE) emphasized on soft skills, especially when it comes to Tanzanian youth. “Our youth must take very seriously soft skills if they truly need to be part of builders and beneficiaries of the national economy,” he cautioned.

Soft skills that include confidence, hard work and faithfulness seem to be lacking in many young people in Tanzania today, he noted, adding that this is a serious challenge.

 “Today employers focus more on attitude than skills,” he cautions, adding that current research shows that attitude of a person towards work accounts for 85 per cent while skills accounts for 15 per cent when looking for new workers. He calls for emphasis on soft skills development in schools and colleges if Tanzania is to increase citizens’ participation in economic activities.

“Emphasis on soft skills development will be a good starting point in implementing local content policy,” the president says. Ricardo Aboud from General Electric Oil and Gas, Tanzania says for local content policy to succeed, there should be an alignment among different stakeholders such as the government and civil society organizations, especially non-governmental organizations.

Peter Boon from Holland-based Fugro Services cautions that there are a lot of costs attached to implementing local content policy more so in terms of training, capacity building and loans with guarantees.

“There must be a way of setting up system to oversee implementation of local content in this country,” he says, adding that Tanzania must learn from other countries but not copy other nations’ experiences.

“Don’t copy and paste, Tanzania should implement policies for the benefit of Tanzanians,” he argues, adding “Tanzania’s experience differs from that of Ghana, Nigeria or Mozambique.” The Prime Minister, Kassim Majaliwa believes that there is a pressing need to make local content concept clear to a wide range of stakeholders in Tanzania.

“The idea of local content should be clearly understood from local government to the central government levels,” the premier says. He says that if the local content concept will clearly be understood, that will help significantly in solving conflicts between investors and their host communities.

“NEEC and other stakeholders are duty bound to make sure that this move rewards mutually Tanzanians and foreign investors.

” The premier assured the forum that the government will continue discussing with the private sector and other stakeholders on best ways of implementing the local content policy. He also pledged to work closely with the European Union (EU) and other stakeholders in doing more research on local content matters.

The Chairperson of Tanzania Private Sector Foundation (TPSF), Dr Reginald Mengi, says history has proved that countries endowed with natural resources experience social unrest simply because citizens are not made part and parcel of the process of exploitation and use of the natural resources.

Enabling citizens should be part and parcel of national economy in present circumstances it is not an option,” he said. He also cautioned that agriculture should remain a priority sector.

The sector employs about 80 percent of Tanzanians. The Group Managing Director, African Risk and Insurance Services (ARIS), Sanjay Suchak believes proper implementation of local content policy, will lead Tanzania to prosperity and international fame.

Local content policy is in line with the National Development Vision 2025 that focuses on making Tanzania a middle-income country by 2025.

Emmanuel Rubagumya is a freelance journalist.

This article was first published by Daily News

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