Tanzania Is Poised to Become a Large Exporter of Gas After Recent Discovery of Large Gas Deposits. How Would Gas Export Make Tanzania Vulnerable to the “Dutch Disease”?. What Policies Can Be Introduced to Offset This Effect?

In Tanzania the gas was discovery on lately 1970s but the exploration has not begun yet at that time. The gas exploration start on early 2000s and the production was begun on 2004 by generate gas from Songo Songo Island using to produce electricity power and some gas were direct to the manufactures sector industry like cement industry. The current data show that Tanzania have reserve of 30 Trillion cubic feet of gas from its onshore field and offshore field like Kiliwani, Songo Songo, Mnazi Bay, Mkuranga, Zafarani, Jodari,Chaza, Chewa and Pweza. Tanzania is the among of the richest natural resource African countries which have huge reserve of minerals like gold, diamond, copper, uranium, rubies, gypsum, limestone, vanadium, cobalt, iron, phosphate, titanium, nickel, tin ,coal and tanzanite. In Tanzania there are fourteen companies which were engages in exploration of gas those companies are BG Group, Ophir Energy, Statoil Tanzania, ExxonMobil , Petrobras, Heritage, Solo oil, JV,Shell, Orca Exploration Group and Aminex. Gas discovery and exploration in Tanzania may bring huge revenues of foreign currencies which will be using for developments programmes but country like Tanzania must be strategically on exploration, processing, transformation, transportation and exporting the gas resource. The gas exploration may bring a lot of adverse effect to the country like disagreement between the main government and the provinces for example the conflict between Tanzania government and peoples of Mtwara region and also may cause the local currency Tanzania Shillings to appreciate its exchange rate against to the foreign currency, this will make the export to be very expensive compare to import so the agriculture and manufacture sectors will decline hence lead to the Dutch disease. The Dutch disease means that when gas sector may suffocate the other sectors by making them more expensive and less competitive due to the exchange rate fluctuation. This passage will give

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