There is a reasonable chance that foreign investment in the LNG project will not happen under current conditions. If the project does proceed, the government revenues it generates are unlikely to be transformative.
Fiscal rules—permanent quantitative constraints on government finances—are an important tool to help mitigate the macroeconomic challenges associated with managing natural resource revenues. This paper sheds light on large gaps in compliance and oversight of fiscal rules, and provides policy recommendations on how fiscal rules can be further strengthened.
The weaker price outlook has plunged potential investments in Tanzania’s promising offshore gas sector into uncertainty, and reduced the likelihood that gas will have a major impact on Tanzanians’ well-being. This revised outlook also impacts important policy decisions the government must make about the management of public finances.