Joint Country Session: Mozambique, Tanzania and Uganda
The session was chaired by John Page (Brookings Institute) and was opened by Tony Venables (Oxford). Venables drew from international experiences to identify the points and issues to be thought at this particular point in time. He stressed the critical importance to manage expectations of both citizens and governments in these countries. Governments will in addition need to anticipate and prepare for a large demand shock and associated boom as foreign investment flies in. Mark Henstridge (Oxford Policy Management) highlighted the fact that the resource scene is changing and the importance to put a realistic scale on the energy discoveries and on the boom that will be associated. Two different perspectives are to be considered the firms’ and government’. Complex sets of decisions on both side will lead relatively long time horizon.
Louis Kasakende (Bank of Uganda) emphasized the importance of understanding the difference between proven reserves and what is commercially recoverable (with an estimate of 35% of the Ugandan reserves). Critical decisions are to be made on both infrastructures –build a refinery or a pipeline- and macro-economic management – deal with the volatility in international prices, ensure the management of increased governmental expenditures and avoid a Dutch disease syndrome.
Claudio Frischtak (IGC) presented the Mozambique case. Resource discoveries of both coal and natural gas are of significant amount and Mozambique could become a new energy hub. Claudio emphasized the non-trivial issue of managing rising expectations and increasing asset prices in the short term in the absence of perceived life improvements for citizens. In addition, Mozambique will have to prepare for a wise use of these new resources on both and internal and external markets.