Country Report Tanzania October 2017

Country Report Tanzania October 2017

  • October 2017 •
  • Report ID: 325950 •
  • Format: PDF

Outlook for 2018-22



  • The long-ruling Chama Cha Mapinduzi (CCM) will remain in power, under the leadership of the president, John Magufuli, but rising tensions between rival factions within the CCM will stoke volatility.
  • A narrowing of the democratic channels for political opposition will stir discontent, but, provided the government makes some progress on raising living standards, popular frustrations will not pose a threat to stability.
  • The government's overall policy will focus on industrialisation and job creation. Protectionist tendencies and erratic policymaking will, however, deter the private investment that is needed to achieve these policy objectives.
  • The fiscal deficit is forecast to widen to 3.9% of GDP in 2018/19, as aggressive efforts to increase tax revenue and trim recurrent spending are offset by higher capital expenditure, before it contracts to 2.9% of GDP in 2021/22.
  • We expect economic growth to weaken over the forecast period as business confidence slumps. Robust consumer demand will nevertheless support the economy, with real GDP growth forecast to average 5.5% a year in 2018-22.
  • The current-account deficit is forecast to widen to 6.8% of GDP in 2019, on the back of firmer import demand, before contracting gradually to 6.1% of GDP in 2022 as earnings increase from goods and services exports.


Review



  • The registrar of political parties, Francis Mutungi, has pushed forward with efforts to amend the Political Parties Act of 1992, issuing a notice in September that requested comments from political parties and other stakeholders.
  • Parliament has approved the Electronic and Postal Communications (Online Content) regulations, which criminalise online content (including blogs and social media) that causes annoyance or that could lead to public disorder.
  • The government announced in October that it had relinquished its equity stake in the Bagamoyo port development, owing to a lack of funding. Chinese developers have since confirmed that they intend to progress the project.
  • Speaking at a press conference in Paris in September, Patrick Pouyanné, the chief executive of France's Total, mooted the possibility of using a planned pipeline from Uganda to Tanzania to export Kenyan oil.
  • Acacia Mining, Tanzania's largest gold mining company, has announced that it will reduce some of its operations at its largest mine, Bulyanhulu, because the government's ban on raw-mineral exports renders them unprofitable.
  • The government confiscated diamonds in September from the Williamson mine, which is majority owned by London-listed Petra Diamonds, amid accusations that the firm had undervalued its exports to evade tax.


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