15 Years of Implementation of Tanzania Development Vision 2025 in the Extractive Industry Development By Eng. N.C.X. Mwihava, Eng. A. Samaje, Eng. B. Mshingwe & Eng. J. F. Mkobya Ministry of Energy and Minerals 5 Samora Machel Avenue, P.O. Box 2000, 11474 Dar es Salaam Abstract—The paper outlines the goals and targets so far developed for TDV 2025. The paper further presents the performance of the Extractive Industry development sector vis-à-vis the overall and set goals and targets by the year 2025. Challenges are identified and proposals for way forward are given in the paper.

1.

Introduction

Extractive industry generally includes activities which exploit resources from the environment. Most extractive resources are depletable in nature. Extractive Industry is any processes that involve the extraction of raw materials from the earth/environment to be used by consumers. The extractive industry consists of operations that remove metals, minerals and aggregates from the earth. Examples of extractive processes include oil and gas extraction, mining, dredging and quarrying (IMF 2010). In the energy and minerals sectors the extractive resources include; petroleum (oil and gas), peat, coal, biomass, uranium, geothermal and various types of minerals encompassing gold, copper, silver, tin, tungsten, platinum group of metals, gemstones (e.g. diamonds, tanzanite, rubies, etc), and industrial/construction minerals. These resources, if wisely exploited and invested in investment, have a big role to play in contributing to the economy of any resource country. On the other hand the extractive resources that cannot be depleted if proper management is in place have a better place in sustainable development. Such resources need to be promoted and appropriate systems to ensure their sustained availability is maintained. Considering the need to develop, Tanzania has been planning various developmental interventions which require exploitation of natural resources. It was in 1994, when Tanzania started the preparation of the Tanzania Development Vision (TDV) 2025 which the Government finally launched it in 1999 1. The National Development Vision 2025 aims at transforming Tanzania into a globally competitive, newly industrialized, middle income and prosperous country. The Vision seeks to ensure a high quality of life to all citizens in a clean and secure environment by 2025. The specific achievements to be attained by 2025 include: a strong and competitive economy with adequate level of physical infrastructure needed to cope with the requirements of the Vision in all sectors; and Infrastructural development whereby investment in energy, water and 1

Vision 2025 was designed to be implemented through a series of five year development plans. The Tanzania First Five Year Development Plan (2011/12- 2015/16), or FYDP I, meant to implement Vision 2025 in view of the new paradigm. Two more medium term plans are envisaged: the Second (2015/16-2020/21), or FYDP II; and the Third (2020/21-2025/26), or FYDP III.

telecommunications is central to the stimulation of local and foreign investment and for creating wealth and employment generating activities. This vision is reflected in the country's long-term development strategy, which identifies increased access to modern energy as one of the important pillars for socio-economic transformation. Specifically, the Tanzania Development Vision 2025 outlined the country's social, economic and political aspirations with an underlying drive to reaching the middle-income country (MIC) status, with a per capita income of USD 3,000 (in nominal terms) by 2025. This was and is still envisaged to be attained by having adequate, affordable, reliable and environment friendly energy supply. That is to say, Tanzania Development Vision 2025 recognises that energy is a prerequisite for proper functioning of any economy. It is an engine for growth. It is also worth noting that minerals have role to play achieving the targets of the TDV 2025 through its contribution to the GDP. The following sections of this paper are presenting the role that the extractive industry under energy and minerals has played and the potential to continue providing inputs to achieving the TDV 2025.

2. 2.1

Energy Energy Situation in Tanzania

Tanzania is endowed with abundant energy resources, these resources include natural gas, water rapids and falls (hydro), coal, uranium, and other renewable sources of energy. To enhance energy security, mitigate climate change, generate income and create employment, Nation we need to ensure energy security by diversifying sources of energy. To exploit these resources efficiently and sustainably, the energy sector requires robust legal and regulatory framework as well as sound institutional set up. The national energy balance indicates dominance of biomass in form of charcoal and firewood mostly for cooking and agro/rural based industries. Of the energy consumed, about 85% is biomass, petroleum products contribute about 9.3 percent, while electricity accounts for 4.5 percent and 1.2 percent from other non-hydro and non-conventional biomass renewable sources of energy. Utilization of coal, solar and wind for energy is still insignificant. On the other hand geothermal, tidal and waves are yet to be fully harnessed. 2.2

Petroleum Industry (Oil and Gas) in Tanzania

Petroleum resource found in Tanzania belongs to the people of the United Republic of Tanzania, and must be managed and utilized in a manner that benefits the entire Tanzanian society. The National Energy Policy, 2015, provides overall guidance in the Energy Sector while recognising specific policies in the Sub-sectors. The Petroleum Industry consists of petroleum upstream, mid and downstream activities. According to Strategic Plan 2011/12 - 2015/16 of the Ministry of Energy and Minerals (MEM), targets and goals in the petroleum industry are as detailed in Annex 1.

2.2.1 Petroleum Upstream Activities In the Petroleum Sub-sector, Upstream activities consist of exploration, development and production of petroleum as well as decommissioning of the facilities. The operational aspects pertaining to the upstream activities include: pre-licensing, licensing and exploration; information and data management; delineation and discovery assessment, development, production and decommissioning. Pre-licensing activities are conducted by data acquisition companies in collaboration with Tanzania

Petroleum Development Corporation (TPDC). However, in the existing policies and legislation, prelicensing activities are not fully covered. For the purpose of regulation and administration the prelicensing phase encompasses: ensuring adequate legislative and contractual frameworks; clarifying jurisdictional and trans-boundary borders; assessing petroleum resource potential; and licensing through bidding rounds. The petroleum data and information are valuable assets for the country in determining the potentiality and commerciality of the Tanzania sedimentary basins. The Government recognizes the importance of data and information dissemination as key elements for the short and long-term successful mapping, planning and administration of the petroleum resource. The Government is determined to establish a clear guidance with regard to the management and ownership of all data and information collected from petroleum operations in the country. Exploration companies are registered in the stock exchange markets and therefore require prompt reporting of any resource discoveries or change in operations as it has financial implications. The Government needs to make informed decision with regards to discoveries, which will further enable delineation of the discoveries, assessment of commercial viability, and development of fields, infrastructure and decommissioning of installations.

2.2.2 Achievements in Petroleum Upstream Activities The country's sedimentary basins cover an area of approximately 534,000 square kilometres. Over 130,375.248 km of 2D seismic data onshore and offshore and 37,486.044 square kilometres of 3D seismic data have been acquired onshore and offshore. As of June, 2015 a total of 89 wells had been drilled. Of these, 53 wells were drilled between, 2005 and mid 2015 leading to an average of five(5) wells per year compared to one(1) well per year before 2005. Out of 59 wells, 40 had gas discovery which translates to a well density of 1 well per 6,209 square kilometres, indicating that the country's sedimentary basins are still underexplored. Natural gas is being produced from SongoSongo and Mnazi Bay gas fields which are located onshore in Lindi and Mtwara regions respectively. Other discoveries located onshore and offshore are at various stages of development to establish economic viability. Up to 2015, exploration efforts in the deep offshore basins resulted in discoveries of large quantities of natural gas. The discoveries have increased the total estimated Gas Initially in Place (GIIP) in Tanzania basins from 8 TCF in 2005 to 55.08 TCF which is equivalent to 9.91 billion barrels of oil by March 2015. In the process of developing the natural gas industry in Tanzania, the Government will also promote extraction of unconventional natural gas including coal bed methane and shale gas in an environmental friendly manner. Despite explorations efforts, until now, no oil had been discovered in the country.

2.2.3 Mid and Downstream Activities This involves transportation, distribution and marketing of petroleum products. In terms of capital investment, these activities are less risky compared to upstream activities, but are of great significance in the socio-economic development. Petroleum is an important fuel for power generation, manufacturing industries, transportation, commercial and households for thermal applications. On the other hand, petroleum is can be used as feedstock or raw material for production of various products especially in petrochemical industries. With the increasing utilization of petroleum resource, it is important that necessary infrastructure such as pipelines, processing plants and storage facilities are developed to ensure sustainability of supply.

2.2.4 Achievements in Mid and Downstream Activities The existing major petroleum infrastructures are: Tanzania International Petroleum Reserve (TIPER) with storage capacity of 300,000 cubic meters. This is a result of conversion of the Tanzania Italian Petroleum Refinery (TIPER) into a petroleum products' storage facility in 2009; the Tanzania Zambia Pipeline (TAZAMA) which transports semi refined crude oil to Zambia; a 542km, 36" natural gas pipeline from Mtwara and SongoSongo (Kilwa - Lindi) to Dar es Salaam with capacity transporting 784 million standard cubic feet per day (mmscfd) but with compression the capacity can go up to 1,000 mmscfd. The construction of this pipeline is 100% complete.; SongoSongo to Dar es Salaam pipeline with capacity of 105 mmscfd; Madimba (Mtwara) Processing Plant with capacity of 210 mmscfd and SongoSongo (Lindi) Processing Plant with capacity of 140 mmscfd. Final touches to operationalize these processing plants are underway. It is important to note that the Government is determined to implement cross country oil and gas pipeline projects to serve the domestic market as well as neighbouring landlocked countries. As mentioned earlier, with no petroleum (oil) discoveries, Tanzania is a net importer of petroleum products. In 2000, the Government liberalized petroleum downstream operations. Since then, up to 2012 oil marketing companies both local and international were independently importing petroleum products. In 2012 the Government had to introduce Bulk Procurement System (BPS), to improve coordination and efficiency in the petroleum importation process. The results of BPS include: reduction of time for petroleum products offloading at the Dar es salaam Port from 15 to 40 days to an average of 2 to 4 days leading to decline of demurrage charges from an average of $45 per Metric Tonne(MT) before 2012 to approximately $2 per MT. The country demand for petroleum products has been growing at an average of 15 percent per annum. In 2014, the total petroleum products' consumption was about 2.9 billion litres. The natural As of July 2015, natural gas was used in power generation (441MW) 2, fuelling motor vehicles, households and institutions. In the quest to achieve the TDV 2025, the Government has continued to promote domestic use of petroleum products to accelerate socio-economic transformation. Given the growing demand for alternatives of wood based energy especially in urban areas, local Liquefied Petroleum Gas (LPG) plants are encouraged and some private operators have indicated desire to construct such facilities. In case of natural gas, a draft Natural Gas utilisation Master Plan (NGUMP) is being finalised ready for sharing with stakeholders for comments. The NGUMP envisages promoting domestic utilization of the resource but also allows export. Therefore the relevant technologies include:, Liquefied Natural Gas (LNG), Gas to Liquid (GTL) and Natural Gas Liquids (NGL). Natural gas will also be used as a raw material for production of fertilizer, methanol and ethanol. Furthermore, the Government will facilitate establishment of industrial parks for natural gas industries. In order to ensure efficiency and reliable supply of natural gas, the National Energy Policy (NEP), 2015 on petroleum industry stipulates that an Aggregator will be established.

2

Installed capacity of Ubungo I (102MW), Ubungo II (105MW), Tegeta GP (45MW) and Songas (189MW).

2.2.5 Other Achievements in the Energy Sector Other achievements during the period include availability of sector guiding instruments, such as the National Energy Policy, 2003 revised in 2015 to guide the sustainable development of the Energy Sector; Petroleum Act, 2015 which covers both: up, mid and downstream and hence repealing the Petroleum (Exploration and Production) Act, 1980, the Petroleum Act, 2008 which coverecovered mid and downstream; EWURA Act, 2001 and Regulator became operational in 2006 with the role for ensuring regulatory oversight and promotion of private sector investment in the energy sector; Occupational Safety and Health Act, 2003; Environmental Management Act, 2004; Petroleum Act, 2008; Public-Private Partnership Policy, 2009; Public-Private Partnership Act, 2010; Natural Gas Policy, 2013; and Tanzania Extractive Industries Transparency Initiative (TEITI) Act, 2015. It is worth noting that the Petroleum Act, 2015 establishes: the Oil and Gas Advisory Bureau, the Petroleum Upstream Regulatory Authority (PURA), National Oil Company - NOC (Tanzania Petroleum Development Corporation becoming a NOC) and an aggragator. In addition the Act legisilates the local content, integrity pledge, transparency & accountability, environmental, health and safety requirements in the oil and gas activities. It also requires enactment of oil and gas revenue management, this Act is already in place after the President of the United Republic of Tanzania's assent of the three related Bills which were passed by the Parliament in July 2015. 2.2.6

Challenges and the Way Forward

Local Content in the Petroleum Industry An increase in exploration activities and discovery of natural gas both onshore and off shore has attracted public attention on the potential benefits that are likely to accrue from oil and gas related activities. Most of the oil and gas activities in the country are done by foreign companies due to inadequate capital, technology and requisite skills from Tanzanians. To maximise such benefits, the Government recognizes the importance of Tanzanians' participation in the entire oil and gas value chain. The National Energy Policy (NEP) 2015 provides a framework for Tanzanians participation in the oil and gas industry. The key focus areas of the Policy include promoting capacity building and technology acquisition; Tanzanians and Tanzanian owned entities' participation; procurement and usage of locally produced goods and available services; and fabrication and manufacturing of machinery products within Tanzania. Oil companies are encouraged to build capacity to local companies/engineering firms to be able to meet the required standards for goods and services

Human Resource Capacity and Availability Tanzania has inadequate number of local experts to meet the current and future petroleum industry demands. In such a situation, petroleum industry companies operating in Tanzania are compelled to employ foreign experts. As of April 2015, out of 18 companies engaged in exploration activities, Tanzanians had shares in only one company. The ongoing discoveries of natural gas necessitate the country to fast track capacity building to nationals at various levels. In this regard, the NEP 2015 aims at developing adequate local workforce with the requisite knowledge and skills. The Government, Oil and Gas Companies, national private entities and professional organs including the Engineers Registration Board and Institution of Engineers Tanzania will have to work together to develop the requisite local skills for the petroleum industry.

Technology Availability and Application Oil and Gas Companies' exploration activities allow transfer of technology and knowledge based on the laws or contracts signed with the Government. However, Tanzania has not fully utilized this opportunity largely due to inadequate human resource with appropriate basic skills. The Government is has put in place policy and regulatory frameworks that will ensure transfer of technology in the oil and gas industry. These encompass the National Energy Policy, 2015 and the Petroleun Act, 2015.

Inadequacy of Funds and Financing Options Petroleum exploration is a capital intensive business that requires companies to insure any loss or damage to assets. In addition, local financing institutions have limited knowledge on the petroleum industry, which is a deterrent factor for local businesses and engineers to access commercial loans. This hinders acquisition of technology and expansion of local engineers' businesses to provide goods and services to the industry. As a result, there is mismatch between demand by Oil and Gas Companies and goods and services produced by local businesses. The Government will encourage financing institutions to acquire the industry knowledge and hence provide loans to local businesses. The Government also will encourage oil companies where applicable to insure their assets locally. For Tanzanian engineers, technicians and artisans to effectively participate in the petroleum industry and projects that will ensure Tanzania realizing its Development Vision 2025, the following needs to be expedited: a) Implement capacity building in relevant fields through formal and informal training. Entities and individuals have to put in place capacity building programmes which encompass on-job training exposure to emerging technologies and other appropriate further learning. b) Tanzanian engineering firms/individuals should form appropriate Joint Ventures (JV). The JV can be in form of local, foreign firms/individuals with relevant competencies or local (national) JV of firms/individuals with complementary capabilities to win project tenders in the petroleum sector. c) Making use of Public Private Partnership Policy, Act and Regulations opportunity to participate in projects that are sequenced for achieving the National Development goals as envisaged in the Vision 2025. d) Ensuring adherence to engineering code of ethics and in accordance to the oath taken by all practicing professional engineers.

3. 3.1

Mineral Sector Introduction

It has happened that countries and regions with abundance of natural resources, specifically nonrenewable resources like minerals and petroleum, tend to have less economic growth and worse development outcomes than countries with fewer natural resources. Richard Auty in 1993 describe how some resource rich countries have been unable to use that wealth to boost their economies and how, these countries have had lower economic growth than countries without or with less natural resources. Successful harnessing of extractive resources for growth,

poverty reduction and social development depends on good governance and sound management practices. Historically, Tanzania is known to have a conducive and prospective geological environment with abundant minerals' potential. So far mining has focused on gold, diamonds and a variety of coloured gemstones including diamonds whose mining started after the discovery and development of the world's largest diamondiferous kimberlitic pipe, a deposit that remains in production to this day. Shortly after achieving independence from the British, in 1961, Tanzania opted for socialism policies, leading to the nationalization of most private sector industries. However, beginning in the 1990's, in line with macro-economic reforms in many other developing countries around the world, Tanzania instituted several reforms to revert to a free market economy and encourage both domestic and foreign investment in all economic sectors. In the Mineral Sector, the reforms aimed at promoting the involvement of private sector in minerals exploration and development. In 1997, the reforms were supplemented by the formulation of a Mineral Policy and eventually a Mining Act in 1998. The Policy, legal and regulatory framework attracted a number of exploration and mining companies which boosted mining started and mineral trading in the country. The Mineral Sector development documents (the Minerals Policy and Mining Act) were reviewed in 2009 and 2010 respectively in order to enhance and promote achievements attained under the previous legislation. The Mineral Sector development is now governed by the Mineral Policy of 2009, Mining Act of 2010 and the Mining Regulations of 2010. 3.2

Minerals Endowment

Tanzania is endowed with variety of high economic potential of mineral deposits in the following geological systems:Craton, Nyanzian, Proterozoic, Ubendian, Usagaran, Karagwe-Ankolean, Bukoban, Karroo and Cenozoic sediments and volcanic zones. The minerals found in Tanzania include metallic minerals such as gold, iron, silver, copper, platinum, nickel and tin; gemstones such as diamonds, tanzanite, ruby, garnet, emerald, alexandrite and sapphire; industrial minerals such as kaolin, phosphate, lime, gypsum, diatomite, bentonite, vermiculite, salt and beach sand; building materials such as stone aggregates and sand; and energy minerals such as coal and uranium. In addition to vast mineral endowment, Tanzania has the following competitive advantages:a) Considerable unexploited mineral potentials; b) Accessible geological data and information; c) Transparent process of granting mineral rights; d) Attractive fiscal package; and e) Peace and political stability.

3.3

Targets and Goals of the Development of the Mineral Sector by 2025

The Tanzania Development Vision (TDV) was formulated with an aim of converting the country status from low income to medium income country by the year 2025. The implementation of the above TDV 2025 is through a series of three Five Year Development Plans (FYDPs). After the 2010 review of the TDV, the Series of three Development Plans are:a) 1st FYDP (2011/12-2025/16):Unleashing the Growth Potential; b) 2nd FYDP (2016/17-2020/21):Nurturing an Industrial Economy; and c) 3rd FYDP (2021/22-2025/26): Realizing Competitiveness - Export Led Growth. The Mineral Policy of 2009 was formulated within the framework of the Tanzania Development Vision 2025, aiming at having a strong, vibrant, well-organized large and small-scale mining industry conducted in a safe and environmentally sound manner with aaspects of public-private partnership. The overall objective of the Policy is to increase the contribution of the minerals sector to the GDP and in poverty alleviation in line with TDV 2025. Specific development objectives of the Mineral Policy includes:a) Strengthening integration of the mineral sector with other sectors of the economy; b) Improving economic environment for investment; c) Maximising benefits from mining; d) Improving the legal environment; e) Strengthening capacity for administration of the minerals sector; f) Promoting and facilitating value addition to minerals; g) Developing small scale miners; and h) Strengthening environment management in mining. Moreover, the Government will remain as the regulator and facilitator of the mineral sector; promoter of private sector investment in the mineral sector; and will participate strategically in mining projects. 3.4

Achievements of the Mineral Sector

The implementation of the Mineral Policy of 2009 witnessed a number of achievements from 2010 to 2015, which includes:a) Increase in contribution of the mineral sector to the GDP from 2.7% in 2010 to 3.5% in 2014; b) Geothermal mapping by Geological Survey of Tanzania (GST) increased from 1.5% in 2005 to 13% of Tanzania land area while the high resolution airborne geophysical survey increased from 3% in 2005 to 15.5% of Tanzania land area in June 2015; c) The geological work conducted in the last few years including by Geological Survey of Tanzania (GST) shows that Tanzania is one of Africa's Natural Resources rich country; d) Geological maps have increased from coverage of 84% of Tanzania land area in June2005 to 93% now, an increase that is equivalent to 60 quarter degree sheets (QDS) e) The mineral sector in Tanzania has experienced a boom in the past 15 years that coincides with high and stable economic growth; f) So far over US$ 2.5 billion has been invested in the mining Sector in 10 active large scale mines: 7 for gold, 1 for diamond, 1 for Tanzanite and 1 for coal; g) The country also has 28 active licenses for exploration and Production of oil and Gas;

h) Compensation and relocation: Mining projects have been adhering to compensation, relocation and resettlement plans in accordance to Laws of Tanzania. These are done before commencement of any project; i) Between 2006 and 2014 three large scale mines have been commissioned, they include; Buzwagi Gold Mine, New Luika Gold Mine and Ngaka Coal Mine; j) Mineral Royalties: Charged on Gross Value of diamonds and gemstone - 5%; Uranium 5%; Precious metals (gold, silver, copper, platinum etc) - 4%, polished and cut gemstones 1% and others (building materials, salt, industrial minerals) - 3% of gross value; k) 31 sites with total area of 227,670 have been set aside for small scale mining in which 11,097 licences have been issued to small scale miners; l) 2 drilling rigs have been procured for minerals exploration in small scale in mining areas; m) A small grants fund has been established for supporting eligible small scale miners; n) Establishment of two demonstrational small scale gold mines (Rwamgaza - Geita and Nyamongo - Tarime), is in final stages; o) Mining development Agreements (MDA): The Mining Act, 2010 requires Mining ventures with Special Mining Licences to enter into an MDA with the Government to provide a tax stabilization assurance for large projects of over US$100 million investments. Each MDA has to be reviewed after every 5 years; p) In final 2009 the Tanzania Minerals Audit Agency (TMAA) was established. Since it's establishment, TMAA has conducted 157 financial and tax audits of large and medium scale mines which enabled the Government to collect TShs. 624.7 billion as corporate tax and TShs. 22.1 billion as royalties,withholding tax, PAYE and service levy. TMAA has established inspection posts to curb mineral smuggling and a number of incidences, minerals have been captured at airports and border posts; q) In 2009 the State Mining Corporation (STAMICO) was de-specified, i.e. removed from the list of Government owned entities which were specified for privatization. STAMICO's main roles are to particpate in strategic mineral activities on behalf of the Government and to support small scale artisanal mining. Key STAMICO achievements include: 100% ownership of STAMIGOLD(previously owned entities by ..........), 50% stake in TANZANITEONE and 45% share holding in Buckreef Gold Mining; ownership of 43 mineral prospecting licenses, providing drilling services; and buying raw tin in Kagera to curb smuggling it to neighbouring countries; r) The installation of On-line Mining Cadastre Transactional Portal has enabled the increase in number of licenses issued from an average of 1,200 per year in 2005 to 6000 in 2014; s) As of March, 2015, of the 44,192 total number of licenses issued, 70% are owned by Tanzanians, 25% issued foreigners and 5% are under locals and foreigners joint venture arrangements; t) Minerals services have been increased by establishing new Zonal and Resident Mining offices. Between 2006 and 2014, four new Resident Mines and two Zonal Mines Offices were opened; u) The Mineral Resources Institute has been improved in terms of infrastructure, courses coverage and students' intake from 150 in 2005 to 668 in 2015; and v) The Tanzania Gemological Centre has been established in Arusha for the purpose of offering training courses in gemstone cutting/carving and theminerals' value addition. It should also be noted that presently, Tanzania is a significant producer of gold, diamonds and a variety of coloured gemstones including tanzanite, the trade name for generally heat treated bluish-

purple epidote. The recently discovered uranium deposit in the southeast area of the country is also under development. Tanzania is Africa's third leading gold producer, after Ghana and South Africa, with several major and junior companies producing and exploring for gold, mostly in north-western Tanzania and south of Lake Victoria, in an area known as the Lake Victoria gold belt. 3.5

Challenges

Despite these achievements, the mineral sector has continued to face challenges, particularly:a) b) c) d) e) f) g)

Low linkage/integration with other sectors of the economy; Low contribution to the GDP compared to the sector growth; Inadequate capacity to administer the sector; Low level of value addition/beneficiation; Environmental degradation due to mining activities; Illegal mining and smuggling of minerals; Inadequate infrastructures and other services to support the mining sector (roads, railways, power - availability, quality & reliability, water and ports; h) Social discontent on sector's contribution to national development; and i) Inadequate resources to develop small scale miners. 3.6

Way Forward

To address the mentioned challenges, there is need to continue administering the minerals and twosector through the use of the Mining Policy, 2009, Mining Act, 2010 and Mining Regulations, 2010 which will result into:a) Ensuring conducive investment climate to attract Foreign Direct Investment (FDI) to the minerals sector; b) Increase the contribution of minerals sector to GDP from the current level up to 10% by 2025 by enhancing integration/and linkage of the minerals sector with other sectors of the economy and having a fiscal regime which maximizes benefits to the economy; c) Promote growth in mineral value addition and beneficiation; d) Spearhead the upcoming of large scale mining projects and mines such as uranium, nickel, gold, rare earth elements, coal and iron ore; e) Support and encourage Government participation in strategic mining projects through STAMICO; f) To strengthen the Geological Survey in performing its main functions of conducting geological mapping and identifying mineral areas, carrying out mineral exploration and monitoring of geo-hazards; and g) Promote capacity building in various disciplines required in sustainable minerals industry, in particular those of engineering.

4.

Tanzania Extractive Industries Transparency Initiative (TEITI)

4.1

Background and highlights on transparency and transparency in executive industry

Tanzania Extractive Industries Transparency Initiative (TEITI) is the Tanzania Chapter of the global Extractive Industries Transparency Initiative (EITI) that set standards of transparency and

accountability in Extractive Industries (EI). For Tanzania at the moment, EI companies are those companies engaged in the extraction of gas, oil and minerals. Tanzania recognize that transparency is essential to ensuring that natural resources support sustainable national development. Tanzania strives to promote transparency and accountability in the management and use of natural resources. Tanzania and the G8 has established a partnership to entrench and enhance the extractives transparency agenda to: increase public access to comprehensive, timely and quality information on revenues; increase disclosure of revenue allocation and spending; increase accountability and reduce actual and perceived corruption; reduce social and political tensions; improve stakeholders' confidence; and create an improved and predictable business environment in both energy and minerals.. 4.2 Importance of transparency and accountability in oil, gas and minerals and role of engineers Petroleum can be used to stimulate development and growth of other sectors of the economy such as agriculture, education, electricity, health, mining, commerce, manufacturing, households and transport. In addition, activities in the petroleum industry, such as exploration, construction and system operations will further create demand for labour, goods and services. "More than 50 countries depend on oil, gas and minerals as their most important sources of government and export revenues. As the government is managing such resources in trust for the people, the people have a right to know what is being done with their natural wealth" (IMF, 2010). Transparency and accountability are crucial in the governance of natural resources, from the decision to extract to the granting of concessions, the collection of revenues and the management of resource revenues. This can increase the efficiency of government policies, reduce opportunities for selfdealing and diversion of revenues for personal gain, raise the level of public trust and reduces the risk of social conflict. "An informed and engaged public can hold the government to account, but will also help ensure that complex, large-scale projects meet government standards for environmental and social protection as well as revenue generation and also reduces the cost of capital"(Hameed, 2005). Given the EITI's relevance and importance, Tanzania subscribed to it in 2009 and became EITI compliant in December, 2012. As of June 2015 TEITI had published 4 reports covering 2008/9, 2009/10, 2010/11 and 2011/12. These reports provided comparison of what is reported in Government books and those of oil, gas and mineral companies. The TEITI Act, 2015 has been passed to ensure compliance of all players in the industry. As indicated in previous sections of this paper, engineers, technicians and artisans have key role to play in the petroleum industry in Tanzania for achieving the National Development goals as envisaged in the Vision 2025.

5.

REFERENCES

1.

POPC (2011), The Tanzania Five Year Development Plan 2011/12 - 2015/16: Unleashing Tanzania's Latent Growth Potentials, President's Office Planning Commission, June 2011 MEM (2012), Strategic Plan 2011/12 - 2015/16. MEM (2015), The National Energy Policy, 2015 IMF (2010), Managing Natural Resource Wealth: Program Document Hameed, F. (2005), Transparency and Economic Outcomes: IMF Working Paper. TPDC (2015), Taarifa ya mafanikioya Shirika la Maendeleo ya Petroli Tanzania (TPDC), July, 2015

2. 3. 4. 5. 6.

Annex 1 Ministry of Energy and Minerals Strategic Plan 2011/12 - 2015/16: Energy Department. OUTPUTS AND INDICATORS DESCRIPTION Output

Base ACTUAL TARGETS Year 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

Monitoring Upstream Petroleum Activities Indicator Number of Production 21 # 14 Sharing Agreements (PSAs) signed #15 Number of advisory 21 committee meetings (ACMs) attended #16 Number of exploration 8 wells drilled and appraised #17

Number of oil and gas 8 discoveries made Output Management and Monitoring of Petroleum Supply Industry Indicator % of petroleum facilities 60 #18 conforming to standards

Output Mtwara - Dar Gas Pipeline Indicator Number of industries using 0 #19 natural gas as source of energy #20 Number of institutions and 10 households using natural gas as source of energy #21 Number of vehicles using 0 natural gas as source of energy

Source: MEM

INITIATIVES

4

1

1

4

3

Pursuing promotion and negotiation on PSA

25

26

27

28

29

Attending the meetings as per requirements

4

3

3

2

2

To acquire more seismic data

7

2

3

2

2

Conducting more explorations

80

90

100

100

100

Strict regulatory environment

35

37

37

47

67

10

57

70

15,000

30,000

0

40

100

2,000

8,000

Construction of Dar es Salaam natural gas (low pressure) network Construction of Dar es Salaam natural gas (low pressure) network Construction of Dar es Salaam Natural Gasa Network and increasing number of CNG refuelling Station from 1 at Ubungo