Statement by Ms.Mandisa Mashologu, UNDP Deputy Country Director- Programmes on the Workshop on Development Challenges and Policy Options for Managing the Extractive Sector

26 Apr 2013

University of Dar es Salaam; DSM

Members of the Academia, Dear UN Colleagues, Distinguished Guests, Ladies and Gentlemen.

On behalf of the UN Resident Coordinator and UNDP Resident Representative, I feel honoured to be invited to the opening of this workshop on the ‘Development Challenges and Policy Options for Managing the Extractive Sector’, organised by the United Nations Conference on Trade and Development (UNCTAD) in collaboration with the University of Dar es Salaam Business School (UDBS).

This workshop forms an important part of the UN contribution to enhancing national capacities to address development challenges and policy options for sustainable development. Our added value is through better informing national dialogue through best practices and lessons learnt from other economies. The UNCTAD Virtual Institute is one such capacity building and networking initiative that complements the broader UN role to support Tanzania. This workshop comes at a particularly opportune time. The recent offshore gas discoveries in East Africa are catapulting the region into a major player in the global energy arena, bringing billions of dollars in investment that could transform entire economies. However, the discoveries present both an opportunity and a challenge for sustainable development and good governance – issues that have plagued the continent as we work towards the end of the globally agreed Millennium Development Goals and undertake a more engaged process to determine the post 2015 development agenda. 

Tanzania stands to gain substantially from the continuing explorations of oil and gas. This most certainly can lead to exponential growth in income and employment opportunities for the country that can be further harnessed to improve human development. However, unless concerted and deliberate policies, strategies, programmes, institutional capacities and systems are in place to ensure that growth is more inclusive, and Government is held accountable to meet the people’s needs as articulated in several development plans, the risk is high that the expansion of the extractive sector will lead to economic growth, but still have the social inequalities that have plagued most resource rich countries in Africa. (Nigeria, DRC, Sierra Leone and Liberia).

Ladies and Gentlemen,

Critical factors for any country to benefit from its extractive sector include the robustness of its legal and institutional structures, programmes and processes that benefit the people economically and socially. This begs the question as to whether Tanzania’s legal and institutional structures are robust enough to ensure effective governance of the extractive industry and sustainable human development. How does Tanzania move towards the direction of countries that have successfully managed their natural resources such as Norway, Ghana, Botswana, and Canada? We as development experts and academics have to analyze, and at best, provide credible answers to these tough questions and work closely with all stakeholders to ensure the country maximizes opportunities for the people of Tanzania through sound evidence based analysis and good practices. 

Ladies and Gentlemen,

According to UNCTAD’s report on extractive industries, 6 out of the 10 largest companies in terms of revenues were from the energy and mining sectors. These companies have enjoyed record profits, fuelled by significant and sustained increases in commodity prices.

Paradoxically, in developing countries where these extractions occur, the majority of the people still remain in absolute poverty[1]. The gap between the profits of operating companies and local economic benefits is likely to widen if resource owners do not put appropriate policies in place to capture and retain value-added opportunities and backward linkages for the people.  There is a need to adequately invest in building national capacities required to ensure better management of the extractive industries in Tanzania.

Coincidentally, this workshop is being held at a time when the government is planning the implementation of the Big Results Now (BRN). The BRN aims at strengthening delivery across six critical areas including energy – which includes Oil & Gas.  Looking at the programme of the workshop, I am pleased to note that you will get an opportunity to further discuss and constructively review practical aspects of how the extractive sector can better support sustainable development in a more focused, nationally relevant and evidence based development process. It is also encouraging to note that you will also have an opportunity to review challenges, opportunities and the impacts (both positive and negative) of the extractive industries in other countries so that lessons can be learned and adapted to strengthen the debate and dialogue within Tanzania’s unique context.

I am therefore confident that your engagement over the next two days will enhance your analytical skills to better engage on issues related to the national economy and development outcomes through open and constructive consultations. 

Ladies and Gentlemen, 

To conclude, on behalf of our Resident Coordinator, Alberic Kacou, I would like to re-assure you that the UN Country Teams response to implementation of national development priorities is firmly grounded in the context of Delivering as One. We remain committed to support initiatives that provide viable technical support and programmes to the government and stakeholders in order to achieve Sustainable Development for all Tanzanians.

Asanteni Sana.