TANZANIA

RISK RATING
Elevated
Default High Risk Score 5.80
Normal Average 4.26
Weighted Average 3.80
RISK RATING HISTORY
RISK RATING SCALE

Risk Rating Scale

Severe: 8.0 to 10
High: 6.0 to 7.9
Elevated: 4.0 to 5.9
Moderate: 2.0 to 3.9
Low: 0.0 to 1.9
EXCHANGE RATE
Country Outlook

President John Magufuli won a second term in a landslide victory at disputed 2020 elections that were internationally criticised for systematic interference in the democratic process. While Magufuli was popular when first elected in 2015, his approval rates have slumped since 2018. In response, oppressive measures against media and civil society, restrictions on individual freedoms, and intimidation of political opponents have been stepped up. There are already rumours within the ruling CCM that Magufuli will seek a third term for which a constitutional amendment would be required. Foreign donor countries are suspending aid or reviewing their budgets for the country over an array of democratic and rights concerns. Yet there will be an urgent requirement for external support and a set of fiscal measures to cushion the blow on the private sector, along with foreign aid to plug the fiscal deficit.

  • Widespread international condemnation has tarnished President John Magufuli‚Äôs government for perceived authoritarian actions, including curbing the powers of Tanzania‚Äôs media and the political opposition. His economic record is also under question as the World Bank and International Monetary Fund (IMF) question the government‚Äôs official statistics. As a result, relations with donor countries are coming under mounting scrutiny. The dispute over donor funding risks undermining Tanzania‚Äôs relations with many western countries. The mining and associated sectors are expected to do relatively well due to high metals prices and the fact that no lockdown measures are likely to be imposed on Tanzania‚Äôs main foreign exchange earners.
  • Islamist militant groups and sectarian unrest pose a higher security risk than political agitation. Since President Magufuli came to power in 2015, opposition parties and government critics have been silenced. A more prominent threat is the risk of Islamist militant groups staging terrorist attacks in an attempt to provoke sectarian unrest. A domestically funded and orchestrated Islamist insurgency is now present in at least three Tanzanian districts and has the potential to quickly spread across coastal and western regions, as well as northern Mozambique, driving heightened risk to the nascent natural gas and other sectors. Further attacks to provoke sectarian divisions are likely and will pose high risk of collateral injury to expatriates and tourists and disruption to key sectors.
  • Economic growth is set to fall from over 6 percent in 2019 to just 1.9 percent in 2020, although a mild recovery is expected in 2021. The treasury will see plummeting tax receipts across all sectors, with the possible exception of gold. Tourism has effectively shut down. Politicians have called for debt relief in order to redirect funding from servicing loans to an adequate healthcare response. Tanzania has an external debt of USD 23 billion, 65 percent of which comes from international financial corporations and donor countries. If debt servicing is suspended for one year, Tanzania may save up to USD 1.3 billion, which can be used to immediately strengthen the over-burdened health system and alleviate economic shocks.
CUMULATIVE AND DAILY COVID-19 INFECTIONS AND DEATH RATE
INTERNATIONAL MONETARY FUND | DATAMAPPER
Risk Perils
Political Instability
2.2
Expropriation, Nationalisation, Confiscation & Deprivation
4.8
Contract Frustration & Breach
5.8
Taxation
5.8
Bribery & Corruption
4.0
Regulatory Burden
5.0
Strikes, Riots & Civil Commotion
4.0
Security
3.5
Sovereign Default
3.0
Economic Volatiliy
4.5

Risk Rating Scale (small)

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Elevated
Moderate
Low

Risk Score BTN

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