Since 2017, the African Development Bank (AfDB) has been supporting Tanzania in a crucial journey toward sustainable and inclusive growth through the “Institutional Support Project on Domestic Resource Mobilization and Natural Resources Management”.
With an investment of USD 26.55 million, the project has been instrumental in strengthening governance, enhancing local capacity, and unlocking opportunities in Tanzania’s natural resource sector both on the Mainland and in Zanzibar. As the project approaches its completion in June 2025, Dr. Patricia Laverley, the AfDB Country Representative in Tanzania, shares insights on its significance, achievements, and lessons for the future.
Q: Why did the AfDB choose to fund this particular project in Tanzania?
ANSWER: The Bank (AfDB) recognized that Tanzania’s vast natural resources present a powerful opportunity for inclusive and sustainable growth, if managed effectively. The project, worth USD 26.55 million, was approved in March 2017 and implemented nationwide through the Tanzania Petroleum Development Corporation (TPDC). Its design reflects our commitment to help Tanzania strengthen its institutional capacity to manage resources transparently and mobilize domestic revenues to finance its own development priorities.
Q: What were the main goals and expected impacts from a funding perspective?
ANSWER: The project aimed to promote inclusive growth by developing Tanzania’s natural resource sector and enhancing domestic resource mobilization. By strengthening governance and fiscal systems, the project helps ensure that natural wealth translates into tangible national benefits. We worked with key institutions such as the Ministry of Energy, TPDC, Petroleum Upstream Regulatory Authority (PURA), Energy and Water Utilities Regulatory Authority (EWURA), National Economic Empowerment Council (NEEC), and Tanzania Revenue Authority (TRA) on the Mainland, and the Ministries of Energy and Minerals, Utilities and Regulatory Authority (ZURA), and Zanzibar Revenue Board (ZRB) in Zanzibar. Collectively, these institutions now have improved capacity to manage resources, regulate effectively, and maximize revenue generation.
Q: How does this project align with AfDB’s broader development strategy in Tanzania?
ANSWER: This initiative sits at the heart of AfDB’s Country Strategy for Tanzania, which emphasizes improving financial governance and fiscal resilience. We have been supporting the Ministry of Finance in implementing its Public Financial Management Reform Strategy, particularly in fiscal consolidation and domestic resource mobilization. Tanzania has already developed its own Domestic Resource Mobilization Strategy, and our project directly complements these national efforts by strengthening the systems and skills needed to execute that vision.
Q: How do you assess the progress and achievements of the project so far?
ANSWER: I’m very pleased with the results. Over 800 professionals have been trained across various fields, including oil and gas management, policy implementation, negotiation skills, and environmental protection. A notable highlight is the successful negotiation of the Host Government Agreement for the Liquefied Natural Gas (LNG) project in the Rovuma Basin, an achievement made possible by the project’s support to the Government Negotiation Team.
In addition, we’ve seen strong institutional strengthening—TPDC staff trained in specialized petroleum management skills, PURA fully operationalized with 85 staff, and EWURA completing major studies on the oil and gas market. On the fiscal side, TRA now benefits from modern tax administration tools and two X-Ray scanners at Dar es Salaam Port. Zanzibar has equally advanced with policy reforms, establishment of ZURA, and the drafting of mining and petroleum laws.
Q: What do you consider as the most transformative outcomes of this project?
ANSWER: The transformation lies in human capital and institutional maturity. For the first time, Tanzania’s key regulatory agencies now have the capacity to handle complex negotiations, manage extractive industry revenues, and enforce regulations. The establishment of fully staffed and equipped authorities such as PURA and ZURA represents a lasting legacy. The LNG Host Government Agreement alone will unlock multibillion-dollar investments, positioning Tanzania as a major energy exporter.
Q: How has the project specifically benefited Zanzibar?
ANSWER: Zanzibar has made remarkable progress under this project. The Government has developed a draft Petroleum Revenue Management Act, updated tax laws, and improved its fiscal data systems. The Zanzibar Revenue Board now has a robust data warehouse, revenue forecasting models, and upgraded ICT infrastructure. The Ministry of Energy and Minerals is finalizing the new Mining Policy and Law, while ZURA is now a fully functional regulatory body with trained staff and advanced operational systems. These achievements lay a solid foundation for Zanzibar’s sustainable resource governance.
Q: What challenges were encountered during implementation, and how were they addressed?
ANSWER: Like any large-scale reform project, challenges included aligning multiple institutions, ensuring timely procurement, and navigating the complexity of oil and gas negotiations. However, strong government ownership and close collaboration with our partners enabled us to resolve these issues. The use of technical assistance and capacity-building programs was key in maintaining momentum and ensuring that reforms were not only implemented but also internalized by national institutions.
Q: What are the key takeaways from this project that could inform future financing decisions?
ANSWER: The most important lesson is that capacity building and institutional strengthening are long-term investments that pay off. Tanzania’s ability to mobilize its own resources is growing steadily, and that’s the essence of true development—financial sovereignty. As we look forward, AfDB remains committed to supporting Tanzania in deepening fiscal reforms, promoting value addition in natural resources, and ensuring that the benefits of growth are equitably shared across the country.
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