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Public Sector and Governance

Tanzania can benefit from natural gas by empowering people

Jacques Morisset's picture

If you are looking for a house in Dar es Salaam, hurry up. With the recent discovery of massive natural gas reserves, affordable houses will soon become a rarity. The cost of living in African countries with abundant natural resources (Angola, Gabon, etc) is among the highest in the world. Today Tanzania sits on about 15 trillion cubic feet of proven natural gas reserves, equivalent to approximately US$150 billion at current prices, or 6 times Tanzania's current GDP.

These proved and potential reserves can be a game changer for Tanzania. Yet, extracting and producing is not a simple affair. Massive up-front investments (larger than the country’s current GDP of US$22 billion) and new technologies are necessary, while benefits will typically spread over 25 to 30 years. Short of cash and expertise, Tanzania will have to partner with global companies. Potential candidates (British Gas, Statoil) are already knocking on the door.

100% pass rate in South Africa’s township schools?

Sandeep Mahajan's picture

Residents of the pukka houses (formerly temporary shacks) in front of the apartment complex where my family lives in New Delhi have decided to send their kids to private, English-medium schools, cutting corners to save enough to be able to afford it.

Professional Hazard: Migrant Miners Are More Likely to Be Infected with HIV

Damien de Walque's picture

Gold mine in Johannesburg, South AfricaSwaziland and Lesotho are among the countries with the highest HIV prevalence in the world.
Recent nationally representative estimates reveal an adult HIV prevalence equal to 26% in Swazilandand 23.2% in Lesotho2.

These countries have two other main features in common: they are small countries bordering South Africa and, during the past decades, they were exposed to massive recruitment efforts to work in South African mines. For more than a century, about 60 percent of those employed in the mining sector in the Republic of South Africa were migrant workers from Lesotho and Swaziland3.

In a recent paper4 with Lucia Corno, we started from this set of facts and investigated whether the massive percentage of migrant workers employed in the South Africa’s mining industry for a long period might be one of the main explanations for the high HIV prevalence observed in Swaziland and Lesotho.

The East African ride to Middle Income

Wolfgang Fengler's picture

You have embarked on a long train ride in Africa. The train is in bad shape, the ride is bumpy and breakdowns frequent. You wonder when you will arrive at destination or if you ever will. But after a tortuous first half of the trip, the train is starting to gain speed. There are still a number of unnecessary stops but the destination is now in sight and passengers are becoming upbeat. Just as the train is about to enter the station you are overtaken by three trains, which had been accelerating even faster.

This train could be Kenya in East Africa’s race to Middle Income. The country remains the richest in East Africa and with almost US$800 income per capita is the closest to meeting the international Middle Income threshold of US$1000.  But its EAC partners Rwanda, Uganda and Tanzania are catching up fast.

Tanzania: Building bridges through education and small businesses

Jacques Morisset's picture

Attracted by the prospects of large unexploited natural gas reserves in the south of Tanzania, big players are in town. The British Gas Group has publicly announced that it may invest over US$35 billion in the next 25 years – 1.5 times Tanzania’s current GDP. Policymakers and donors are jockeying to position themselves and understand what is at stake.

The excitement is well founded but perhaps a little bit premature. According to the most optimistic projections, revenues from natural gas will not materialize for 5-7 years. Moreover, international experience shows that commodity-driven growth does not guarantee success. The Tanzanian authorities are therefore right to prepare for the future by setting up the fiscal and financial rules required for future transparent and rational use of these funds now. They should not forget also to focus on the coming 5-7 years because the economy is facing a number of challenges.

Impact evaluation as leverage

Shanta Devarajan's picture

While banks, homeowners and a few governments in the US and Europe are "de-leveraging," the buzzword in the aid business is "leveraging"--using scarce aid resources to crowd-in other resources, such as tax revenues and private capital flows.  The reason is simple:   aid resources are limited (partly due to the economic slowdown in donor countries from their de-leveraging) but development needs are great, so using aid money to stimulate tax revenues or guarantee private investors' risk could square the circle.

But we don’t just want to increase the amount of resources available:  we want to make sure those resources are spent on activities that reduce poverty.  This suggests a different way of thinking of leveraging. 

Creating a level playing field

Wolfgang Fengler's picture

Throughout the slums of this world, poor children are dreaming of becoming football stars and playing in the World Cup. Some of them from Kibera—Kenya’s largest slum—had a shot last weekend, when the International School of Kenya hosted the third “Mini World Cup”.

The event involved more than sixty teams made-up of Kenyan and international children from all walks of life. Two teams from Kibera made it to the top eight teams of the tournament, keeping their dream alive to win the “Cup” in one of the next years. The great thing about football is that all teams, no matter what their social background, have an equal opportunity to win. They start on a level playing field, and they all play by the same rules. When the final whistle blows, there is no reason why one of the teams from Kibera should not lift the Mini World Cup next time, just as Ghana’s Black Stars overcame Team USA in the 2010 World Cup, despite the huge disparity in wealth between the two nations.

In economic development, the equivalent of having a level playing field is equality of access to basic services.

Recent reforms in Sierra Leone: Beating the effects of global economic downturn

Vijay Pillai's picture

Pay phone operator in FreetownThe year 2011 ended on a high note for the reformers in Sierra Leone.  There were two significant reforms which the government saw through – reforms that had been long overdue, but which now hold the potential of unleashing new investments and economic growth in the country.  Can Sierra Leone’s use these reforms to beat the potential effects of a global economic downturn?  One hopes so.

The energy sector in Sierra Leone has long faced under-investments. Not very long ago Freetown had the dubious distinction of being the darkest capital in the world and the Bumbuna dam remained elusive.

Landlocked or Policy-Locked?

Aaditya Mattoo's picture

We are used to thinking of landlocked countries as victims of geography.  We worry that Ethiopia, Mali, Rwanda and Zimbabwe, among others, cannot benefit fully from flows of trade, tourism and knowledge.  But do these countries use policies to improve connectivity and offset the handicap of location?

A new services policy database shows a perverse pattern. Landlocked countries tend to restrict trade in key “linking” services like transport and telecommunications more than other countries. 

Zambia, for example, bravely liquidated its national airline in 1994, but it still denies “fifth freedom rights” to Ethiopia to fly the Addis Ababa-Lusaka-Johannesburg route, and to Kenya to fly the Nairobi-Lusaka-Harare route.  In fact, the restrictive policies of many African countries make a mockery of the decade- old Yamoussoukro Decision (and a subsequent COMESA agreement) to liberalize air transport.

Is democracy bad for Kenya’s economic development?

Wolfgang Fengler's picture

When you are overtaken by yet-another reckless Matatu driver you may have sympathy for Lee Kuan Yew, Singapore’s long-time autocrat, who is credited with Singapore’s transformation from third world to first world. He once famously claimed: “Developing countries need discipline more than democracy.”

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