Gas exports to bridge Tanzania’s widening current account deficit

LNG Ship11 December 2013, Dar es Salaam – TANZANIA will reduce its current account deficit in the next few years when it begins exporting high value commodities like the liquefied natural gas (LNG).

Currently, the government is looking at erecting a facility to export LNG to be located in Lindi Region by 2020, that will be similar to those developed by the biggest gas exporter Qatar in the world. Similarly, it is pushing to start natural gas exports to the East African countries by 2015.

The Tanzanian Ambassador in Belgium and the European Union (EU), Dr Diodorus Kamala said this in an interview with the ‘Business Standard’ at the conclusion of a tour by the businessmen from Belgium, Greece and Italy (BELGREITA) who came to explore business and investment abundant opportunities in the country.

“To export goods with high value in order to lessen current account deficit, heavy investments on value addition to ensure such commodities qualify the level of international standards is of paramount importance,” he said.

“It is from this reason that the government is struggling to attract serious investors to invest in the exploration of natural gas and other mining and agriculture activities for the country to export high value goods.”

Tanzania is estimated to have more than 40 trillion cubic feet (TCF) of gas, which it said can rise for over five-fold over the next five years, putting it on par with some Middle East producers. It already uses it locally for power production for the national grid as well as in the industries like cement, textile and glass manufacturing, breweries and steel mills.

“The BEGREITA’s business mission to Tanzania has added value to the efforts geared at reducing current account deficit,” he said. Similarly, as ambassador to the EU, Dr Kamala said the country’s trade with the European Union (EU) remains crucial and key economic relations necessary for the growth of local manufacturing companies which are engaging in agro-business activities.

Tanzania is still heavily dependent on traditional exports namely of cashew nuts, coffee, cotton, sisal, tea and tobacco. Over 70 per cent of the population engages in agriculture activities for income generation.

Thus, attracting investors into value addition of agro products would in the same way help to the great extent boosting exports of high value goods to fetch premium prices in the international markets and in the end lessening current account deficit.

– Tanzania Daily News

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