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.
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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