Monday, August 31, 2015

No potentials on gas revenues in Kilwa and Mtwara district councils-Study

HOPES by Tanzanians that revenues out of gas production would help transform lives of millions of people in the country might hit a snag after the study has discovered that, the service levy paid is too minimal compared to other income generating activities in areas where its production has picked up. The Professor of economy Prosper Ngowi of the Morogoro based Mzumbe University made a concern yesterday in Dar es Salaam in his study report when contributing to a debate on a topic titled, “Tanzania’s gas economy: Examining local and national perspectives” which was presented for discussion at Breakfast talk organized by Policy Forum held at British Council. In his study report titled, ‘‘Service levy revenue from gas companies in Kilwa and Mtwara District Councils’ Prof. Ngowi has disclosed that the two districts which are endowed with natural gas reserves receives lesser amount paid as service levy by Pan-African Energy Company Ltd and M & P Company. Initially the Pan-African Energy firm was paying the levy at Ilala District Council in Dar es Salaam region for reasons that had stated earlier that it was where it is registered, but later the Ministry of Energy and Minerals ordered the diversion of such funds to Kilwa district whereby the firm is currently doing its business activities in gas as in accordance to the Petroleum (Exploration and Production) Act, 1980. The firm was tasked by the Tanzania Petroleum Development Corporation (TPDC) to deal with gas business activities in the district over seven years ago and is required to pay 0.3 percent of the service levy attained out of the company’s gross annual sales as stipulated in Local Government Finance Act of 1982. Findings by Professor Ngowi show that, Kilwa District Council has received a total of Sh. 1.1 billion for the service levy from the company from April 2012 and July 2014 which is equivalent to the annual average rate of Sh. 391.1 million. Likewise, study findings at Mtwara District Council show that during the same trading period, the council received a total of Sh. 93 million from M and P Company for gas production at Mnazi Bay.  This is less compared to other sources of revenues such as Cashew nuts being the main source of income generating fund for the people and which has produced a whooping Tsh. 932 million in 2014/15 trading period alone. Revenue incomes of the same crop as indicated in figures for the preceding years put in brackets are  2014 (Tshs. 358 million), in 2013 (Tsh. 337 million) and in 2012 (Tsh. 1.1 billion) whereas in 2011 (Tsh. 450 million) Professor Ngowi noted in his study report that, other companies which he could not mention re at exploration stage and that are not allowed to pay gas service levy yet. 

Exploration equipment for gas doing the work at the sea off shore in Mtwara region.

However, he further noted that the Mtwara District Council stands to potentially get huge amount of gas service levy when mass production starts based on ongoing explorations. Earlier, discussants over the topic poured much blame to the government when the topic was put across to the audience for discussion, with some saying that, the government is not serious and open with the gas business activities and its ongoing exploration. Contributed in the debate, Flaviana Charles a Programme officer of the Legal Human Rights Centre (LHRC) noted that, if Tanzanians citizens would not be careful the same gas will be like what is still in a nutshell with the minerals such as gold. Flavian who is also the Vice-President of Tanganyika Law Society is of the view of the fact that there is a need to review various gas contracts which might have been put in place and see if Tanzanians will benefit from the natural rich resource. Rose Tesha, a progtramme officer of VSO Tanzania Ltd suggested that, the government should look at other means to increase revenues and concentrate on small scale income generating activities rather than giving hopes to achieve benefits on gas whose destiny is yet to be known among Tanzanians. A retired Professor Adolf Mascarenhas of the University of Dar es Salaam has called on Tanzanians to wake up and see to the production of gas in the country and have all the details in hands instead of politicizing about the matter which would later on put a nation in danger. He is of the opinion that, the politicians and the local people must work together in close ties to ensure that the natural wealth such as gas is publicly addressed and not leave the matter for the few to make decisions. The Managing Director of the Abnsaf Ltd, Aidan Rukonge said that, the government should not have concentrated much on exploration and rather it should have put in place strategic means that could enlighten Tanzanians on the basic use of gas. A renowned Engineer Steven Ndazi of Shaloom Engineering Company suggested that, politicians should get away with the exploration and mining activities of the underground natural wealth and leave the task to be guided b y experts. He is however, on the view of the fact that, the policies that the government has put in place are likely to spoil the future of Tanzanians as this has been compiled by politicians who are not knowledgeable with the related gas exploration activities going on in the country.

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