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FACTBOX-Key political risks to watch in Tanzania

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By Fumbuka Ng'wanakilala

DAR ES SALAAM, Feb 8 (Reuters) - Tanzania is facing growing public discontent over the beneficiaries of vast natural gas discoveries in the country, while simmering power struggles in the ruling party threaten to undermine the stability of the government.

East Africa's second-biggest economy wants to become a regional energy hub following major discoveries of natural gas offshore. But residents of a gas-rich region are threatening to block a major gas pipeline project until they see a bigger share of the benefits.

PIPELINE TENSIONS

Residents of the southern Mtwara region are threatening to block the 532 km (330 mile) pipeline - being constructed jointly by the government, Canada's Wentworth Resources and France's Maurel and Prom and financed with a $1.2 billion Chinese loan - until they see benefits of the gas finds.

The government has said the project will go on.

What to watch:

- Will the opposition spearhead demonstrations against the construction of the pipeline?

- Will unrest derail gas investments and spread to the mining sector in Africa's fourth-biggest gold producer?

OIL AND GAS SEARCH

Opposition politicians and activists have been calling for a halt to the issuance of new oil and gas exploration licences until Tanzania revamps its laws regulating its fast-growing energy sector. The government has unveiled a draft national gas policy and plans to have new legislation in place this year.

Tanzania has called for an international mediator to resolve a long-standing territorial dispute over Lake Malawi. Malawi says it owns Lake Malawi, while Tanzania claims their shared border runs down the centre. Tanzanian officials say any significant oil or gas finds in the lake could escalate the border issue.

What to watch:

- Delay in issuing more exploration blocks.

- Content of a new gas policy. There is no timeframe for completion of the bill. Tanzania has said it will not revoke existing contracts. The government is under pressure from politicians and the public to increase revenues from mining and energy.

- Failure of any border dispute talks.

RULING PARTY DIVISIONS

Tanzania's governing Chama Cha Mapinduzi (CCM) party has been split by a race to succeed President Jakaya Kikwete, who must step down in 2015 at the end of his second term in office.

The CCM party, in power since Tanzania's independence from Britain more than 50 years ago, is grappling with infighting as rival politicians look to succeed the president.

What to watch:

- Divisions in ruling party that may weaken the government.

- Police crackdowns on demonstrations of the main opposition CHADEMA party, which is enjoying increasing popularity, especially among youths in urban centres.

- Corruption further undermining the ruling party and the government, in the eyes of the opposition and investors. (Editing by Richard Lough and Oliver Holmes)

http://www.globalpost.com/dispatch/news/thomson-reuters/130111/factbox-key-political-risks-watch-tanzania