Tanzania, the third-largest economy in East Africa is an agrarian and markedly diversified economy, characterized by robust private consumption, substantial public spending, strong investment growth, and an upturn in exports underpinned the positive outlook.
Tanzania’s agriculture sector is among the most diverse in East Africa. The country’s primary exports include coffee, cotton, tobacco, cashew nut, and tea. It also produces significant quantities of fruits and vegetables, pyrethrum, and sisal.
Tourism, mining, services, construction, agriculture, and manufacturing are notable sectors. Growth was projected to be broadly stable at 6.4% in 2020 and 6.6% in 2021, subject to favorable weather, prudent fiscal management, mitigation of financial sector vulnerabilities, and implementation of reforms to improve the business environment.
The fiscal deficit, financed mainly by concessional external debt, stood at 2.0% of GDP in 2019, up from 1.3% in 2018, and is projected to stabilize at 1.9% in 2020 and 2.2% in 2021. External public debt, 63% of it concessional, constituted 70.4% of total public debt in 2019. The current account deficit slightly widened to 3.4% of GDP in 2019 from 3.3% in 2018.
African Development Fund (ADF) approves $50.7m Covid-19 crisis response budget support
The Board of Directors of the ADF on October 19, 2020, approved a loan of UA 36 million ($50.7 million) to Tanzania, to finance the nation’s response to the COVID-19 pandemic.
The loan, from the African Development Bank Group’s COVID-19 Response Facility (CRF), will support the Government of Tanzania’s $109 million national COVID-19 response plan, which is jointly supported by the country’s other development partners. The plan is aimed at building economic resilience, while mitigating the socio-economic and health impacts of the COVID-19 pandemic, particularly on local businesses, vulnerable households, and the country’s health system.
The pandemic has put increased pressure on Tanzania’s health facilities, social protection systems and has dampened the country’s projected growth of over 6.2%, the average over the last five years, and which had made it one of the best performers in Eastern Africa. Growth is now projected to decline from the pre-COVID projections of 6.4% to between 3.6% and 2.6%.
Commenting on the operation, Nnenna Nwabufo, the Acting Director-General of the Bank’s East Africa regional office, said it was part of a larger, more comprehensive support package for the Bank’s regional member countries, including Tanzania.
“The evolution of COVID-19 and changing containment measures remain dynamic and unpredictable; the medium and longer-term impacts of the crisis are yet to be fully understood. The African Development Bank Group is stepping up its coordination with governments, as well as with other development partners to adapt and strengthen its monitoring and response to the pandemic,” Nwabufo said.
Rebound in Tourism
AT least 1,180 tourists from Eastern Europe landed at Zanzibar's Abeid Amani Karume International Airport on Saturday, October 31, recording an increase of visitors in the Isles since the outbreak of Covid-19.
"We should be happy with the increasing number of tourists after the ease of covid-19 in our country. We expect more tourists to arrive in the country as days’ pass. I can assure the public that the business is getting back to normal," said Tourism Commission of Zanzibar (TCZ) Director Dr. Abdalla Mohamed.
The TCZ chairman attributed the improvement to the ongoing global advertisements on tourism attractions in Tanzania considering the measures taken by the country in combating Covid-19.
"We are a free Covid-19 nation, this is well explained and understood by tourists across the World," he noted.
He said since the resume of tourist business in June, this year, the government came up with workable strategies with tourist operators, and also wrote to Tanzania ambassadors to various countries to implement a special work plan for promoting the sector.
"We also had an Italian ambassador to Tanzania to confirm that all is good in the country. Over 60 percent of tourists' visiting Zanzibar are from Italy," he said.
The Deputy Chairman of Tourism Commission of Zanzibar, Mr. Khamis Mbeto Khamis told the 'Daily News' that on October 24, a total of 180 tourists arrived from Poland, followed by 250 tourists from Ukraine two days later, on October 28 a total of 400 tourists and 350 others arrived from Russia and Ukraine respectively.
"Everyone in Zanzibar must be happy with this development. Tour operators, taxi drivers, suppliers of commodities, Hoteliers, and their staff are getting back to work. Also, our local flights are busy flying tourists to Tanzania mainland's National Parks," said Mr. Khamis.
Mr. Khamis said that the target is to record 800,000 tourists' arrival by 2025 as it appears in the Chama Cha Mapiduzi (CCM) manifesto, but if all goes well, he said the target will be met within one year.
On average tourists spend five to eight days in the country, and in addition to spending, they pay 50 US dollars on arrival. He said this week, about 350 tourists are expected to arrive in the country from South Africa followed by 550 others from Russia.
The outgoing Minister for Information, Tourism, and Heritage Mr. Mahmoud Thabit said tourism is one of the most important industries, employing 60,000 people, supporting economic growth, and building the country's image.
President John Magufuli secures a second term in office
Tanzania’s populist President John Magufuli has been sworn into office for a second five-year term amid tight security by the police and the army.
The swearing-in on Thursday, November 5 came off despite the opposition calling for a fresh election, the disbandment of the electoral commission, and an “endless peaceful demonstration” over the October 28 elections.
Magufuli said the weekend before he was sworn into office that he would not pursue another term amid concerns that the governing party, which won nearly all parliament seats, might try to extend the presidency’s two-term limit.
Magufuli received 12.5 million votes which represent 85 percent of total votes cast while his main challenger, Tundu Lissu of the Chadema party, got 1.9 million votes, or 13 percent, the electoral commission said.
“The commission declares John Magufuli of Chama Cha Mapinduzi (CCM) who garnered the majority of votes as the winner in the presidential seat,” said commission chairman Semistocles Kaijage.
The turnout was roughly 50 percent with only a few international observers allowed to observe the vote. The governing party also secured nearly every seat in parliament, giving it the power to change the country’s constitution.
Widespread Election Irregularities
The opposition however, described the elections as a “travesty” because of widespread irregularities.
The vote “marked the most significant backsliding in Tanzania’s democratic credentials”, Tanzania Elections Watch, a group of regional experts, said in an assessment released on Friday, October 30. It noted a heavy deployment of military and police whose conduct created a “climate of fear”.
“The electoral process, so far, falls way below the acceptable international standards” for holding free and fair elections, the group said. However, the national electoral commission, in its announcement late on 30th October, called all votes legitimate.
The US embassy in the East African country said on 29th October that there had been “credible allegations of significant election-related fraud and intimidation” in Wednesday’s vote for a president and politicians.
The election was marred by allegations of arrests of candidates and protesters, restrictions on agents of political parties to access polling stations, multiple voting, pre-ticking of ballots, rejection of thousands of election observers, and widespread blocking of social media.
Observers say Tanzania’s reputation for democratic ideals are crumbling, with Magufuli accused of severely stifling dissenting voices in his first five-year term. Opposition political gatherings were banned in 2016, the year after he took office. Media outlets have been targeted.
Zitto Kabwe, leader of the main opposition party in Zanzibar, ACT-Wazalendo, and Chadema’s leader in parliament Freeman Mbowe were among dozens of opposition candidates who lost their seats to the ruling party.
“What happened on October 28 was not an election but a butchering of democracy,” CHADEMA chairman Freeman Mbowe told reporters, asserting that more than 20 people were killed during the election.
“We demand the election repeated with immediate effect and the dissolving of the national electoral commission”, Mbowe said.
In the run-up to the October 28 polls, opposition parties have complained of threats and repression, and rights groups have accused the government of curtailing free expression and press freedom. The government has previously rejected such accusations.