Monday, August 12, 2013

An economist outlines benefits of gas exploration to southerners

A Senior Lecturer at Economics department of the University of Dar es Salaam (UDSM) has said that, the Mtwara and Lindi regions would be the most beneficiaries of the natural gas once it’s exploration is completed. Dr. Haji Semboja  who is also an economic consultant made his observations on Wednesday last week in Dar es Salaam when presenting a paper during the post budget discussion forum for 2013/14 financial year which was organized by an Economic and Social Research Foundation (ESRF). The forum discussed the budget of the of two ministries in relation of the developing sectors of Energy and agriculture in the country. The ideas were focused on gas exploration as well as the current development of Kilimo Kwanza initiatives.  The forum drew participants most of whom economists, agriculturalists and staticians, scholars and accountants who gathered to share information which could bring improvement later on for the incoming national budget if such sectors would be encountered with unpredictable challenges.  Elaborating on the main challenges of the recent budget for the Ministry of Energy and Minerals which was read in Parliament in May this year, Dr. Semboja said that, there were some elements which the Minister did not quote as part of the benefits to be attained by southerners out of this project. He outlined some of the issues that, about 0.3 percent of the total sales on gas would be retained to run various social and economic development activities for the people of Mtwara and Lindi regions respectively. Unlike other regions in the country, the don further noted in his paper presentation that,  the two regions would be entitled to social services such as dispensaries, schools, electricity and water supplies as well as free sponsorship in vocational training colleges and secondary school studies to be awarded for the best performing candidates. Others he mentioned are construction of various industries such as that one of the fertilizer and cement products of the Dagote company. In Mtwara town the American company of Symbion would be stationed to generate 400 Mw of the electricity. He also noted that, there will also be constructed a transmission line of KV 220 from Mtwara town to Songea which will be constructed by an American Schlumberger company based in Houston USA which currently is constructing a large workshop which will be making equipments used for extraction of the underground gas and oil natural resources. He also noted that, in the budget, the participation of the Tanzanian indigenous sector is not involved in the development of gas extraction in the country as compared to what other countries are doing. 

He mentioned Norway who he said have empowered their local companies largely in the extraction of their local resources. To illustrate his idea, he noted that the government should think of ways to give indigenous capacity to run the local gas exploration in order to pave the way for the future generation. He mentioned such local organizations such as the Tanzania Petroleum Development Corporation (TPDC), State Mining Corporation (STAMICO), National Development Corporation (NDC) and other national institutions should have been involved so that the government should get an easy access when it comes in the issue of tax collection. The Executive Director of the Agricultural Non State Actors Forum (ANSAF) Audax Rukonge outlined various challenges that impedes small scale farming activities in the country, noting that such challenges constrains the move to promote the development of “kilimo Kwanza”  initiative in the country. He said that, there are some issues which are not taken into account when the budget for the Ministry of agriculture was being prepared. The issue of the inflation is growing at a higher rate level in the country and thus it’s a great burden to local practitioners. It is high time the government should fight counterfeit agricultural input such as the fertilizer sulphate. Some of these input are overpriced but the government has not shown how it takes the situation and how is going to overcome the impeding situation in the country. Lack of incentives for the private sectors to grow such as infrastructure, roads, energy and the creation of a conducive working environment is among the major challenges the budget has to look at for the development of the sector. Non tariff barriers are among the challenges that impede the development of agricultural sector as small scale farmers would not get access of enjoying their commodities as they would be obliged to taxation charge while transporting their commodities. He however urged the government to concentrate more on local investments and not only to foreigners as is the case now, saying that it should be concentrated more on small scale farmers. He noted however that, farmers are still poor and cannot produce more with the currently available incentives. Lack of credit facilities is a major problem. Farmers would continue remaining poor all the time if their market potentials is not given priority it deserve as most of them entirely depends on the agricultural produce for sale in order to earn their livelihood. A distraught agriculturalist has also expressed his concern that the country has lost 40 percent in post harvest. Also an agricultural statician from the Ministry of Agriculture Nganga Nkonya said that, investors on agriculture should be empowered and given the necessary incentives for the promotion of the sector. He says that, the government should merely stick on revamping the agriculture policies and should not only look at the salaries for the extension staff and administration for the ministry, but policies should be strengthened and added that if this is done, the agricultural development would remain intact.

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