However, in many countries, governments have often failed to challenge, caveat or highlight uncertainties inherent in over-optimistic projections by companies and IFIs; and have done little to temper inflated public expectations. In some countries, governments and politicians have actually exacerbated them.

Celebrating Ghana’s giant oil discovery in 2007, President John Kufour said “Even without oil, we are doing so well... With oil as a shot in the arm, we’re going to fly” (Kufuor, 2007, cited in BBC, 2007). A year later, before any government revenue projections had been published, the opposition’s presidential candidate stated that “In five years, Ghana will earn US$15 billion” (Addo, 2008). Then, in 2010, President John Atta Mills promised that “The petroleum resources will take Ghana into an industrial revolution in the next 10 years,” (Mills, 2010).

In Tanzania, when campaigning to be re-elected in 2010, President Jakaya Kikwete stated about the town near one of the large gas discoveries: “Mtwara will be the new Dubai” (Must and Rustad, 2018).

One explanation for the lack of government questioning of over-optimism by companies and IFIs may be limited capacity to interrogate it and develop countervailing analysis. However, some have pointed to political advantages to explain government encouragement of such over-optimism. (Bawumia and Halland, 2017). Similar political influences may have been at play in Tanzania (Dupuy and Katera, 2019).

Support for a government as a result of such promises is likely to dissipate when those promises are not fulfilled. Therefore, mismanaged expectations may be politically disadvantageous in the longer term. However, in the interim, these inflated expectations can have a tangible and damaging impact.

_Suboptimal policy and institutional frameworks_ The second impact of unrealistic projections is adoption of suboptimal policy and institutional frameworks. As we have discussed, the discovery events presented in Section 2 were followed by a surge in interest in further exploration as well as development of some potentially viable finds. These developments certainly warranted changes to the policy framework. However, our review found several cases where the changes implemented, often based on perceived ‘good practice’ for resource-rich countries, do not appear, in retrospect, to be well aligned with the new realities.

**Establishment of new government institutions.** In several countries, new government institutions have been established to focus on the sector. For example, Sierra Leone’s Petroleum Directorate was established in 2011, shortly after the country’s first discovery. Liberia’s Petroleum Regulatory Authority (LPRA) was established in 2018. Similarly, Uganda’s Petroleum Exploration, Development and Production Act 2013 provided for the establishment of a new regulatory authority, the Petroleum Authority of Uganda (PAU).<sup>24</sup>

Setting up such institutions ensures resources are focused exclusively on developing and/or regulating the sector. However, in countries with limited financial and human resources, establishing these specialized entities needs to be carefully timed. If premature, they can hamper the strengthening of regulatory capacity and impact other areas of sector governance by spreading scarce resources too thinly or necessitating prioritization of one objective over the other (Heller and Marcel, 2012). Considering that Sierra Leone and Liberia are yet to make a commercially viable discovery, these countries may have benefited from waiting longer before investing substantial public resources in the development of new institutions. Indeed, Liberia’s 2012 National Petroleum Policy offered useful flexibility, only requiring the LPRA to be established “as soon as practicable and 24 The same Act also established the Uganda National Oil Company.

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