Reforming Tanzania’s oil and gas sector: Strategic analysis of commercialization constraints and future prospects
DOI:
https://doi.org/10.21839/jaar.2025.v10.9702Keywords:
Oil and natural gas, Regulatory and policy reforms, National oil company, Public private partnership, Investor confidenceAbstract
Tanzania’s vast natural gas reserves offer significant potential for economic transformation, yet commercialization efforts have consistently failed. Despite numerous regulatory and institutional reforms, the sector remains hindered by fragmented policies, inadequate infrastructure, weak governance, and limited investor confidence. These challenges have delayed critical projects such as the Liquefied Natural Gas (LNG) plant and constrained the sector’s capacity to support industrial growth and energy security. This study examines key barriers to commercialization, focusing on five interrelated challenges: policy incoherence, limited infrastructure, weak investment facilitation, ineffective local content and corporate social responsibility (CSR) frameworks, and inadequate environmental governance. A particular concern is the inefficiency of the national oil company (NOC), burdened by non-commercial responsibilities and limited operational flexibility. To address these issues, the study proposes a shift from state centric control to a transparent, investor-responsive, market-driven framework. Recommended reforms include restructuring the NOC, strengthening regulatory autonomy, expanding private public partnerships, aligning local content policies with domestic capacity, and introducing financial risk management tools to protect the sector from global shocks. Unlocking Tanzania’s commercialization potential depends on institutional realignment and effective policy execution. Bridging the gap between reform ambition and implementation is essential to transforming the oil and gas sector into a foundation for long term, sustainable development.
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