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Tanzania is preparing to finalise a landmark liquefied natural gas (LNG) agreement worth an estimated USD 42 billion by the first half of 2026, a move that could reshape the country’s economic trajectory and elevate East Africa’s role in global energy markets. Spearheaded by Equinor and Shell, the project aims to develop roughly 47.13 trillion cubic feet of offshore natural gas, positioning Tanzania alongside Mozambique as a cornerstone of a future LNG export corridor serving Asian markets.
Kitila Mkumbo, Minister of State in the President’s Office for Planning and Investment, has confirmed that most commercial negotiations are complete, with discussions now focused on establishing a robust legal framework to underpin the project. Speaking at an investment briefing in London, Mkumbo noted that production could commence within eight years of signing, making the venture the largest single investment since Tanzania’s independence.
Alongside Equinor and Shell, the consortium includes ExxonMobil, Pavilion Energy, Medco Energi, and the state-owned Tanzania Petroleum Development Corporation (TPDC). The breadth of participation underscores both the scale of the gas reserves and Tanzania’s strategic intent to harness its natural resources as a catalyst for long-term economic transformation.
The project is expected to generate more than 100,000 jobs over its lifespan, offering a significant boost to local economies and aligning with the government’s development agenda. However, Mkumbo stressed the importance of legal clarity and stability, particularly given the project’s complexity and multiple stakeholders. Although initial financial terms were agreed in 2023, progress slowed following proposed government amendments aimed at securing stronger alignment with national interests.
Beyond the LNG initiative, Tanzania is pursuing several large-scale infrastructure projects. President Samia Suluhu Hassan has reportedly authorised the central bank to release part of the country’s gold reserves to enhance liquidity. This move comes as gold prices reach record highs—exceeding $5,100 per ounce—driven by global uncertainty and demand for safe-haven assets. The strategy is intended to bolster domestic financing amid shifting international funding dynamics.
Tanzania’s fiscal position has been further strained by international concerns surrounding the 2025 general election, which saw opposition candidates disqualified and political tensions intensify. Civil society groups, including members of the CHADEMA opposition party, allege that security responses to unrest led to significant loss of life—claims the government disputes and for which no official figures have been released.
In the aftermath, several European development partners have temporarily suspended financial assistance, withholding an estimated $2–3 billion from Tanzania’s $10 billion development budget. These funds typically support health, education, and infrastructure programmes. Acknowledging the shortfall, Mkumbo indicated that the government is exploring domestic revenue measures to reduce reliance on external financing.
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Against this backdrop, the proposed LNG agreement represents more than an energy project—it offers a potential pathway to economic revitalisation and regional influence. It also feeds into a broader continental conversation about African nations recalibrating their engagement with international capital, asserting greater sovereignty in resource extraction, and negotiating more equitable, long-term partnerships.
While critics caution against deepening fossil fuel dependence, proponents argue that fair and transparent energy partnerships remain vital for development, particularly in regions still grappling with infrastructure gaps and historical underinvestment. If managed inclusively and transparently, Tanzania’s gas strategy could meet domestic energy needs while reinforcing Africa’s pursuit of self-determined economic and industrial growth.