EDITORIAL: Resources not about money, but economic opportunities

Monday July 21 2014

 

By The Citizen

A new report by the British market intelligence firm Business Monitor International (BMI) has ranked Tanzania highly in terms of attracting investment in the natural gas sector in Africa. 

The report, according to an article published by The Citizen on Saturday, has delighted the Tanzania Petroleum Development Corporation (TPDC), which says international oil and gas companies operating in the country have invested $4.7 billion (about Sh7.52 trillion) in the sector.

The amount is over a third of the $12.7 billion (Sh20.3 trillion) foreign direct investment (FDI) Tanzania attracted last year.

According to BMI, Tanzania has even overtaken South Africa in attracting oil and gas investments. TPDC attributes this to an increasingly competitive investment climate, which some analysts consider over-generous.

In terms of numbers, that indeed is good news. 

However, we, as a nation, need to be cautious and wary when dealing with numbers in natural resources because they often tend to blur the picture as far as the economy is concerned and raise false hopes.

A case in point is Nigeria, where half of the population lives in poverty despite the country being the world’s ninth largest oil producer and Africa’s biggest economy. 

Only a fraction of the population has access to electricity because the country is able to generate only 5,000 megawatts against the required 40,000 megawatts.

It is more or less a similar story in Angola, another major oil producer in Africa.

What counts at the end of the day is not how much has been invested, but economic opportunities created.

Instead of celebrating impressive numbers, we should be more interested in the extent to which FDI pumped into the natural gas sector so far has created opportunities for locals and its general impact on the economy.