Tanzania's investment climate will feel the effects of continued policy uncertainty over the coming quarters which will keep economic growth below potential. Despite the passing of a peaceful and largely credible election on October 25 that in the end saw the incumbent Chama Cha Mapinduzi (CCM) party post a relatively comfortable victory, a number of lingering political issues will keep economic output below potential and growth someway short of its five-year trend levels.
Economic growth in Tanzania will feel the effects of policy uncertainty in the energy and mining sectors up to, and likely well beyond, the general election on October 25. While we expect growth to return to trend from mid-2016 onwards, risks to the medium-term growth picture are increasingly to the downside.
Putting post-electoral uncertainty to one side, we believe that Magufuli's position as president is secure and his mandate solid. A former public works minister, he is regarded as an effective and hard-working technocrat. His credentials as leader and statesman are less proven, and his ability to exert influence and direct events will depend on how quickly he can build a power base and network within the party.
Monetary policy in Tanzania is likely to remain relatively tight over the coming months, despite an improving inflation outlook and easing external pressures on the shilling. While the shilling has been more stable in recent months amid more supportive conditions for EM currencies generally, we believe the authorities are likely to maintain a hawkish monetary policy bias for a time longer given the potential for further bouts of EM risk-on sentiment.
Key Ri sks
A major risk to our economic outlook comes from the weather. Poor rains would not only exacerbate tight food supplies (food price inflation was the major driver of rapidly rising headline inflation in 2011) but would also once again hamper hydroelectricity production, raising costs for businesses and, by extension, consumers.
|Real GDP growth, % y-o-y||8.2||6.1||5.7||6.0|
|Nominal GDP, USDbn||44.2||48.5||43.8||43.8|
|Consumer price inflation, % y-o-y, eop||5.6||4.8||4.9||6.0|
|Exchange rate TZS/USD, eop||1,590.00||1,733.00||2,250.00||2,340.00|
|Budget balance, % of GDP||-3.6||-2.8||-4.2||-3.5|
|Current account balance, % of GDP||-10.6||-9.8||-9.3||-9.7|
The Tanzania Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in The Tanzania and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..
An influential new analysis of The Tanzania's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).
- Forecast the pace and stability of The Tanzania's economic and industry growth through end-2017.
- Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
- Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
- Contextualise The Tanzania's country risks against regional peers using BMI's country comparative Risk Ratings system.
- Evaluate external threats to doing business in The Tanzania, including currency volatility, the commodity price boom and protectionist policies.
BMI provides our fully independent 5-year forecasts for The Tanzania through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.
Economic Outlook Contents
The Tanzania Country Risk Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.
Key Areas Covered:
- Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
- BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.
- Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
- Balance of Payments - trade and investment, current and capital account.
- Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
- Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
- Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
- Foreign Direct Investment - approvals, inflows and climate.
- External Debt - debt profile (short and long-term plus public and private sector exposure).
- Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.
- Rely upon BMI's 100% independent forecast scenarios for The Tanzania and underlying assumptions - we take no advertising and are privately-owned.
- Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on The Tanzania, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
- Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.
What are the political risks to doing business in The Tanzania over the next 5-years?
BMI's The Tanzania country Risk Ratings evaluate the short- and medium-term threats to political stability.
Political Outlook Contents
- SWOT Analysis for the Tanzanian Market - Political Strengths, Weaknesses, Opportunities and Threats facing The Tanzania.
- Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for The Tanzania's risk are compared with regional and global averages.
- Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
- Benchmark The Tanzania's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
- Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
- Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.
Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for The Tanzania, benchmarked against ratings for regional neighbours.
Country Competitiveness - Competitiveness of The Tanzania's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.
Business Environment Contents
- Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
- Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
- Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.
- Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
- Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.