15 January 2014

East Africa: EAC-IMF Workshop On Fiscal Management of Oil and Natural Gas in East Africa Opens in Arusha

Photo: EAC
Tanzania has been cautioned against pulling out of the East African Community.

press release

Arusha — A three-day workshop on Fiscal Management of oil and Natural Gas in East African organized by the East African Community together with the International Monetary Fund (IMF) opened today at Mount Meru Hotel, in Arusha,Tanzania.

The 15-17 January workshop is designed to discuss key issues that EAC governments face in managing the fiscal impacts of oil and gas development and emphasize how the issues and policy choices are interlinked.These relate to design of the fiscal regime (tax and non-tax instrument) and revenue collection; options for the macro-fiscal policy framework and fiscal anchor as well as institutional reforms to integrate natural resources revenues into the budget and credible medium-term frameworks.

Delivering the keynote address, the Cabinet Secretary, Ministry of Energy and Petroleum in the Republic of Kenya Hon. Davis Chirchir said that the timing and importance of the workshop to the East African Partner States cannot be over-emphasized due to the fact that the East African region is rapidly emerging as the preferred investment destination by international oil companies who own the risk capital for conducting upstream oil and natural gas operations.

The Kenya Cabinet Secretary disclosed that in Africa out of a combined East African sedimentary basin surface area of about 900, 000km2, only an insignificant number of about 190 exploration wells have so far been drilled in that expansive area.

He noted that number of the wells drilled relative to the expansiveness of the regional sedimentary basins according to international standards translates into a very low average well density of about one well in every 5000 km. The current developments have had a very positive impact of projecting East Africa as a promising alternative destination for exploration and production of commercially viable oil and gas resources, added Hon. Davis Chirchir.

"I am happy that the International Monetary Fund team and the East African Secretariat have, through this workshop, provided East Africa with the a forum to benefit from the invaluable knowledge, skills and experience that the IMF team has built over a long period of time".

The Kenya Cabinet Secretary underscored the importance of working together to address and mitigate the challenges that either delay or become impediments to enabling the people of EAC region realize the full benefits across the whole value chain of oil and gas production and sale.

Minister of State for Finance, Planning and Economic Development in charge of Privatization in Uganda, Hon. Aston P. Kajara, reiterated that extraction of natural resources-oil, gas, and hard minerals can play a large role in the regional economies provided that a good framework is in place for effective management.

"I look forward to the ensuing discussions as we marshal experiences on how best to manage these new revenues in ways that can expand our economies and consolidate and build on the gains that have been made in living standards over the past decade in EAC Partner States".

Hon. Aston P. Kajara reminded the participants that good decision making in the management of natural resources wealth are exceptionally high and at the same time the damage caused by bad decisions can be carried by future generations for many years to come.

On his part, the EAC Secretary General Amb. Dr. Richard Sezibera said the workshop on Fiscal Management of Oil and Natural gas will in no doubt make a big step in fiscal policy management since revenue from finite natural resources such as oil and natural gas must definitely present opportunities for EAC's solid economic development but can also destabilize macro-economic management if not well managed.

Amb. Sezibera informed the workshop that discoveries of natural gas in Tanzania, and oil in Uganda and more recently in Kenya with mineral exploration proceeds in Methanol Gas in Rwanda and possible reserves in Burundi calls for robust frameworks for managing revenue from this resource in order to benefit the East Africans.

The EAC region is bound to take off to the emerging economies if the revenues from natural resources are well managed compounded with the establishment of the single currency and adherence to prudent and sound fiscal and monetary policies, remarked Amb. Sezibera.

Among the delegates in attendance were; the EAC Deputy Secretary General in charge of Planning and Infrastructure Dr. Enos Bukuku; Mr. Roger Nord, Deputy Director, Africa Department, IMF; Mr. Michael Keen, Deputy Director, Fiscal Affairs Department, IMF; and experts of natural gas and oil in the EAC Partner States.


Owora Richard Othieno,

Head of Department;

Corporate Communications and Public Affairs;

Tel: +256 754 473 574, +255 784 835021;


Corporate Communications and Public Affairs Department

EAC Secretariat Arusha, Tanzania


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