United Republic of Tanzania: Selected Issues

This Selected Issues Paper takes stock of progress in the project’s expected timeline, investment and production prospects, and the project’s potential macroeconomic implications. Drawing from review of empirical literature, the paper also highlights key lessons for managing revenues from natural gas. This paper is the first step toward a more comprehensive assessment of the macroeconomic impact of the project, which will require information on the technical details of the projects as well as the fiscal regime. Tanzania’s Liquefied Natural Gas project aims to commercialize natural gas discoveries made in the deep offshore basin. Negotiations between the government and private sector developers have gained momentum recently and a Host Government Agreement is expected to be signed early this year. Meanwhile, preparatory technical work in terms of site selection and acquisition has advanced. Notwithstanding these achievements, several important steps remain, including amendment of relevant laws, preparing project blueprints, environmental assessments, and a final investment decision. If it goes through, the project has the potential to transform the Tanzanian economy.