Editor’s Note: This article was originally published by THE GUARDIAN
PRIME Minister Dr Mwigulu Nchemba has declared that there are no legal or regulatory barriers stalling the implementation of the 100trn/- Liquefied Natural Gas (LNG) project.
Instead, the government is engaged in meticulous negotiations with international investors to ensure that Tanzania’s national interests are fully protected before the massive undertaking commences, an intervention intended to quell concerns regarding the timeline of the flagship project, the largest single investment in the nation’s history.
Responding to a query from Mtwara Rural MP Arif Premji, during the direct question and answer session in the National Assembly yesterday, the premier referred to the complexity and scale of the investment as a problem.
It requires a level of diligence that cannot be rushed, as the government seeks to avoid pitfalls of previous large-scale resource agreements, as the premier addressed causes of the delay in starting construction works.
The MP sought to understand why the project, under discussion since 2014, has yet to break ground despite its status as a top national priority.
The premier asserted that ongoing discussions are focused on strategic clauses that will define Tanzania’s benefits for decades to come.
As the country has never entered into an investment of this magnitude, the government must be careful to do justice to its natural resources, he explained.
While talks are in advanced stages, the government remains firm on a domestic market obligation, ensuring that three percent or more of the produced gas is reserved for internal use to power local industries and domestic energy needs, rather than being slated entirely for the export market.
In addition to energy security, he highlighted that strict directives exist regarding local content provisions, where the government is firm on legal frameworks that mandate the active participation of Tanzanian companies throughout the project’s value chain.
This strategy is designed to build a resilient national economy by empowering local entrepreneurs and ensuring that the wealth generated by natural gas stays within the country to foster secondary industries and technical expertise, he stated.
In other remarks, the premier said that the government has allocated 280bn/- for a new credit guarantee window to be administered by the central bank, specifically targeting young entrepreneurs who often struggle to secure bank loans due to a lack of collateral.
By providing these guarantees, the government expects to unlock capital for youth-led startups and small businesses often locked out of the formal financial system, he explained.
Special Seats MP Timida Fyandomo had inquired about government strategies to link youth with domestic and foreign investors, where the premier remarked that the newly passed Investment Act provides for young investors to enjoy the same incentives as major international players.
These benefits include streamlined land occupancy processes and significant waivers on taxes and levies, for a more inclusive investment environment widening the scope of job creation in the private sector.
