A how-to guide for the government and local ‘wananchi’ on managing natural resources was launched in Dar es Salaam aimed at ending or preventing the so called ‘resource curse’ plaguing the economic development of many countries with such resources.
Chief Secretary, Ambassador Ombeni Sefue
Dubbed the Tanzania natural resource charter, the Chief Secretary Ambassador Ombeni Sefue launched its pane of experts yesterday asking them to take the responsibility very seriously for it has huge implications for the country.
He asked them to accommodate all views of skeptics and enthusiasts and to consider national interests and not of interests of their constituencies.
He also asked them to be open minded and not to feel constrained by their positions or where they come from. “Put Tanzania first. Let resources lead us to fortunes,” he said.
Ambassador Sefue said the government is determined that resources generate most possible revenues. “Management of resources will be a big economic driver to bring gains of resources to the people,” he said.
He added that the Charter would help citizens develop this for the good of the country. He said all this is aimed at fair and sustainable development The Charter has also been adopted by NEPAD.
He said the process is not externally driven, but moved by the government to ensure local resources benefit. The panel would support the government to see opportunities along the value chain in the extractive sector. The Panel members cover a cross section of disciplines.
“The entire team is local. This is our process,” he said. Presenting a paper at the launch, Prof Paul Collier from Oxford University, said the Charter gives both the government and ordinary citizens the knowledge they need in order to male the right decisions.
He said the Charter gives knowledge and understanding to both parties to make the right decisions. He said the experts, who are Tanzania, would help the government to get knowledge and see what the country’s needs are and harness the existing opportunities. He said the knowledge would help in building of institutions and set rules.
“It is a good start. You will be building and thinking for years to build capacity and critical understanding. It is being hosted by Uongozi Institute in the country.
Globally, the Resource Charter is an 11-point plan prepared by a group of highprofile economists, lawyers and political scientists, including Michael Spence, 2001 laureate of the Nobel prize in economics; Robert Conrad, an expert on natural resources economics at Duke University, and Tony Venables and Paul Collier, professors of economics at Oxford University. One of the key steps recommended by the Resource Charter is to use the revenues of natural assets to boost domestic investment.
“Saving the money into a sovereign wealth fund is wrong for these countries, as their big problem is lack of domestic capital,” said Collier. “ Neither should the revenues be used in the ordinary state budget because they come from a depleting natural resource.
Instead, nations should invest in investing, by increasing the mass of domestic capital available.” When it comes to fighting corruption, countries should auction extraction rights, rather than engage in one-onone negotiations. “Auctions force companies to inadvertently reveal the real value of extraction rights, something that the government may not know,” explains Collier.
“In a straight negotiation, there is also a strong incentive on the side of the company to bribe the government officials taking the decisions,” he says.
“In an auction, the bid’s winner is usually the closest to the true value of the natural assets.” Recent natural gas finds and ongoing mining activities in Tanzania present an extraordinary opportunity for development.
Government revenues could be as much as $2.5 billion per year, large enough to dwarf aid flows and finance sustained human development gains.
At this size, revenues will also be large enough to pose well known political and economic ‘resource curse’ risks.
These, among other challenges relating to the governance and economic management of natural resources will be addressed by the Natural Resource Charter, which is a government led initiative supported by the Natural Resource Charter-Revenue Watch Institute (NRC-RWI), and housed at UONGOZI Institute.
By ORTON KIISHWEKO, Tanzania Daily News
