A team of overseas researchers discovered 54 billion cubic feet of helium gas in Tanzania’s Rift Valley, according to The Guardian. Helium is a rare gas used for research and medical purposes, and its scarcity has sent prices skyrocketing over 500% in the past decade. Norwegian firm Helium One has three extraction licenses pending with the Tanzanian government.
There is little word on the commercial aspect of helium production in Tanzania, but it is another element that could produce more wealth to an economy that is relatively robust, but still needs vast improvement. Helium is rare to the point where many doctors have urged a ban on its use in balloons.
The gas is a precious find for Tanzania as the county struggles with dire poverty. The East African nation retains other precious minerals and natural gas resources, including gold and diamonds, but natural resources have not provided wide-scale prosperity. Market instabilities in oil and commodities have added some instability to an economy that has remained above water for the most part, but will see some troubles along the way. Food shortages will continue to be a problem, and the economy must produce a surplus of high-quality jobs to satisfy a growing labor force.
The good news is that Tanzania’s economy expanded 7.0% in 2015, and leaders see a growth target of 7.4% in 2017, notes Standard Digital. With that, corruption is a primary issue preventing economic advancement. President John Magufuli has campaigned on a pledge to reduce graft, and his policies are popular with the public.
Reducing corruption will place the economy on stable footing as it ventures into new projects such as helium production, including overall diversification of the economy. Tanzania relies heavily on agriculture production, but officials have diversified into other ventures, such as construction and finance, and the new helium discovery could add to Tanzania’s diversification portfolio. Such a strategy is the right path as other economies around the world struggle with lower commodity and energy prices.
Helium extraction would prove to be a more lucrative venture than oil and natural gas, especially as the oil market contends with a glut, and heightened helium prices would provide more revenue in the short-term at a time when the government needs to capitalize on its momentum. It remains to be seen what role helium would play in Tanzania’s economy, but policymakers would see some significant gains as their country becomes a primary supplier of a scarce resource.