This archive report was first published on 28 October 2019.
Published on October 28, 2019, a report by the Economist Intelligence Unit (EIU) has cautioned that Tanzania's protectionist policies and erratic decision-making may deter the kind of private investment needed to achieve its industrialisation goal within the next five years.
The report, which was published this month, also warns that President John Magufuli's continued squeezing of political space within the country could fuel public discontent in the run-up to the 2020 general election.
"Tanzania will remain politically stable during the period 2020-24, but we expect some volatility in the political landscape as electioneering picks up next year," the report says.
According to the EIU, early signs of this have already started emerging amid speculation about divisions within the ruling CCM party, owing to President Magufuli's centralised style of leadership and his intolerance to opposing views.
Despite this, the EIU is confident that President Magufuli enjoys sufficient support within the ruling CCM party to ensure he sails through on the back of the party's well-oiled party machinery in 2020.
On the economic front, the EIU believes that while rising public and private infrastructure investment will support average economic growth of 5.8 per cent between 2020-2024, real GDP growth in those years will be lower than the estimated 6.5 percent at present due to declining business confidence.
The Tanzanian shilling is expected to weaken from an estimated Tsh2,289 at present to Tsh 2,641 against the US dollar by 2024, due to twin fiscal and current-account deficits pressure.
However, the EIU cites competition for regional trade between Tanzania and Kenya, and the impediments this is causing to the East African Community integration, as a major risk scenario for Tanzania in the sense of triggering potential developments that might substantially change the country's business operating environment over the coming two years.
