Business Times (businesstimes.co.tz ) editorial today:
A RED carpet is being laid for years of instability and sabotaging of
a projected pipeline, if its construction starts amidst a hue and cry
fueled by opposition parties and everyone who wishes to be praised by
the crowds. There is a Niger delta syndrome in the offing, that
sentiments are sharp and acute about who will benefit from the
project, that it will be necessary to meet those demands halfway so
that the matter can go ahead with less heat, greater calm. So far the
Ministry of Energy and Minerals has not given an indication that it
has a Plan B up its sleeve, apart from the tired nomenclature of
providing ‘education’ to people on the issue!
While the minister, Prof. Sospeter Muhongo and other experts who have
insisted on transporting the gas for processing in Dar es Salaam since
it is the nerve-centre of the country’s economy are perfectly right,
there is a catch to it. The government seems to refuse to reap where
it has sown, as for several years it has treated the issue of value
addition as the key to development in rural areas in particular, that
to sell products raw was tantamount to being robbed in broad daylight.
If that is true of nearly all local products and even tanzanite must
be cut locally, why not the gas?
The idea that resources belong to all people of this country does not
invalidate the wish to apply the value addition panacea for the gas
produce as it is also finally a local product in terms of its
location, not its investments. But the proper problem is not where
value addition should be done but the hype and excitement that has
been built about natural gas, which invites conditions of fratricidal
contests not just between the local residents and the government but
within the government itself. Watch out for subsequent sittings of
Parliament, and the issue of who manages the gas issue and who gets
the contracts from TPDC titans could paralyse the House.
One reason why there is going to be a fratricidal contention
concerning the gas is that it has been given undue prominence on
account of its profitability potential not in commerce but in the
bureaucracy, due to its many business openings. Such a situation opens
the floodgates to traffic of influence – which is always prone to
conflicts, the reason why private ownership and due payment of taxes
if the land on which the gas stands was privately owned ends
conflicts, as in the Middle East. They don’t fight over gas, petroleum
since everyone knows his place on land, taxes.
Bureaucrats here have twisted the issue of avoiding a resource curse
into one of avoiding a situation where the profits are stashed abroad
instead of being used for national development, whereas the issue is
that gas, petrol destroy national unity where property relations are
weak.
But if the bureaucracy had recognized the use of property relations
they would have continued with economic reform, but they rely on ‘good
governance,’ that is, to extract a promise from the cat that it shall
desist from sucking up the milk it has been given to guard. So the
union with Zanzibar is collapsing over gas, now the south is in
rebellion over gas, and more.
TPDC and the ministry are focusing on using gas for electricity by
pointedly ignoring the Stiegler’s Gorge hydro-power potential, and
that the Brazilians are ready to develop the project in partnership
with RuBaDA. TanESCo titans do not want to hear of the project as it
is not under their wings, and the government is not ready to
liberalize so that the sector is commercialized and anyone sets up
projects and sells power in the vicinity. There is no clear need for
use of gas in electricity save for thermal plants already in place,
not to start planning for new thermal generation systems simply
because there is gas in place, plentifully so.
With proper planning the gas would be directed for export markets to
generate dearly needed foreign exchange, instead of being wasted on
electricity generation as power shall in that manner remain expensive.
Natural gas extraction, taking to plant and processing, and then
burning it for electricity is incomparably costly in comparison with
hydro-power, but then no one in the government is likely to gain from
the Stiegler’s Gorge project. They turn to gas, forsake the foreign
exchange and then start discovering that their ‘cashmania’ is equaled
by the same mania on the part of their detractors in the opposition,
and misplaced dreams of local people.