BY ELLY MANJALE
Tanzania’s recent discovery of an estimated 223 billion cubic feet (bcf) of natural gas at Mnazi Bay in Mtwara Region presents an important opportunity to accelerate the country’s industrialisation ambitions. Exploration undertaken jointly by the Tanzania Petroleum Development Corporation (TPDC) and French energy company Maurel & Prom offers the prospect of strengthening energy security and advancing industrial development.
The discovery is small compared with the country’s previously discovered gas resources of 57.54 trillion cubic feet, adding approximately 0.4 per cent to the total. However, it is significant because it reinforces Tanzania’s already substantial natural gas resource base, which could fundamentally influence the country’s economic future.
Tanzania’s challenge is no longer simply to discover more gas; it is to convert its considerable gas endowment into industries, jobs, exports, technological capabilities and lasting national prosperity. The opportunity is considerable. Natural gas can provide a reliable energy source for electricity generation while serving as feedstock for fertiliser manufacturing, petrochemicals, plastics and other industrial products. Furthermore, the proposed offshore liquefied natural gas (LNG) project offers prospects for substantial foreign exchange earnings, investment inflows and government revenue.
However, becoming a gas-driven economy requires more than discovering and extracting natural gas. It requires a deliberate policy shift from treating gas primarily as an energy commodity to recognising it as a strategic industrial input. Tanzania should pursue domestic value addition by encouraging investment in gas-based manufacturing, fertiliser production, petrochemicals and other industries that generate higher economic returns than the mere extraction and sale of raw gas.
The towns of Mtwara and Lindi are particularly well positioned to form the foundation of a natural gas-based industrial corridor. The government should accelerate investment in gas processing, electricity transmission, transport, water supply and industrial infrastructure to attract domestic and foreign investors. It should also expand domestic gas distribution to factories, households and commercial establishments.
Equally important is ensuring that Tanzanians derive meaningful benefits from the discovery. TPDC’s 40 per cent participation in the Mnazi Bay venture provides an opportunity for greater national involvement and revenue generation. Local content requirements should go beyond employment to include technology transfer, technical training and the development of indigenous enterprises capable of participating in the petroleum value chain.
Nevertheless, caution is necessary. Tanzania should avoid excessive dependence on natural gas. International price fluctuations, the global energy transition and the high cost of petroleum infrastructure make economic diversification essential. Natural gas should complement the country’s hydropower, solar, wind and other renewable energy resources.
Tanzania should learn from Qatar’s approach to large-scale gas exploration, LNG development, international partnerships and strategic investment. Lessons can also be learnt from Trinidad and Tobago’s approach to gas-based industrialisation, particularly fertiliser, ammonia, methanol and petrochemical manufacturing.
Ultimately, the Mnazi Bay discovery provides an opportunity to advance a much bigger national ambition: transforming Tanzania from a country that possesses and produces natural gas into one whose industrial competitiveness, manufacturing capacity and economic growth are substantially driven by gas.
Elly Manjale is an economic, business and management consultant based in Arusha who writes on economic, business, social and political issues. Email: emanjalle@gmail.com
