Tanzania Country Risk Report Q3 2018
Growth in Tanzania is likely to decelerate in the coming quarters, due to a slowdown in lending and gold exports. That said, the level of headline growth will remain relatively robust given large infrastructure projects boosting fixed investment.
Slow credit growth in recent quarters will likely lead to the Bank of Tanzania undertaking monetary loosening after implementing a new monetary policy framework. This is despite moderately higher inflationary pressures in H218.
After range-trading in the short term, the Tanzanian shilling is set to weaken over the coming quarters. A pullback in investor confidence brought on by a more hostile investment environment and weakening exports will drive downward pressure.
Declining freedom of the press and civil society organisations in Tan-zania over recent quarters reflects government efforts to consolidate power. While some backlash from Western media and domestic civil society organisations is likely, President John Magufuli's govern-ment's mandate will remain robust.
Tanzania's current account deficit will widen in the coming quarters owing to weaker export growth and a higher import bill. A deteriorating regulatory environment is likely to see foreign direct investment slow.
Executive Summary Core Views Key Risks Chapter 1: Economic Outlook SWOT Analysis BMI Economic Risk Index Economic Growth Outlook Weak Lending And Gold Export Ban Will See Growth Slow GDP By Expenditure Outlook TABLE: GDP GROWTH FORECASTS TABLE: PRIVATE CONSUMPTION FORECASTS TABLE: GOVERNMENT CONSUMPTION FORECASTS TABLE: FIXED INVESTMENT FORECASTS TABLE: NET EXPORTS FORECASTS External Trade And Investment Outlook Deficit Will Widen As Trade Balance WeakensOutlook On External Position Foreign Financing Will Support External Position Monetary Policy Monetary Loosening Likely Despite Higher Inflationary Pressures Monetary Policy Framework Structural Fiscal Position Broader Revenues Will Boost Budget In The Long Term TABLE: FISCAL AND PUBLIC DEBT FORECASTS Currency Forecast TZS: Waning Confidence And Competitiveness Will Offer Headwinds TABLE: BMI CURRENCY FORECAST Chapter 2: 10-Year Forecast The Tanzanian Economy To 2027 Regulatory Challenges Pose Risk To Otherwise Bright Growth Story TABLE: LONG-TERM MACROECONOMIC FORECASTS Chapter 3: Political Outlook SWOT Analysis BMI Political Risk Index Domestic PoliticsWeakening Press Freedom Highlights Magufuli's Consolidation Of Power TABLE: POLITICAL OVERVIEW Long-Term Political Outlook Continuing CCM Rule Will Sustain Stability Chapter 4: Operational Risk Operational Risk TABLE: OPERATIONAL RISK Business Crime TABLE: BUSINESS RESPONSE TO WHITE COLLAR CRIME AND ORGANISED CRIME RISKS Education Chapter 5: BMI Global Macro Outlook Key Divergences Emerging In World Economy TABLE: GLOBAL MACROECONOMIC FORECASTS TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y TABLE: TANZANIA – MACROECONOMIC DATA AND FORECASTS