Fresh political pressures on the peace process coincide with the commencement of commercial diamond extractions, raising renewed concerns over political instability and contract frustration in the mining sector.
The post-election climate has been brightened by a large hydropower investment and a positive economic outlook; however, the threat of insurgency, fragile debt sustainability, and lack of political succession planning will remain longer term threats to stability.
New revelations concerning public embezzlement, political intervention in the judiciary, overspending on military procurement, and public asset collateralisation are expected to frustrate any hope of a breakthrough during renewed talks with the IMF and motivate further donor aid cuts.
Both presidential campaigns are focussing on building broad-based local political coalitions to ensure victory in 2019, yet slowing investment and frustration of foreign investments are hampering the economic recovery and imperilling the local banking sector.
Ahead of next year’s elections, the government will maintain the political status quo and boost welfare spending in order to curb any outbreaks of unrest; yet falling foreign exchange reserves will determine longer term succession scenarios and pose a nascent threat to repayment schedules as debt balloons.
Despite concerns over the pace of incremental reforms to the security sector and progress on privatisations of state-owned companies, the new government remains committed to making comprehensive political changes.
President Magufuli’s nationalist economic stance affects every sector in Tanzania’s economy, which is posing a serious threat to longer-term investment and growth just as the government seeks to issue more debt.
Excessive public debt and mounting political pressures risk undermining Gambia’s ongoing transition and the government’s reform agenda, although a substantial foreign aid endowment has provided a much-needed windfall.
Any dispute over the results of the municipal elections is unlikely to permanently derail the peace process with the armed opposition, while key investment processes are unlikely to face significant risk of disruption as a result of political unrest.
NGOs and media will face an increasingly restrictive operating environment and risk hefty punitive fines in case of violations of new regulations, while such measures are likely to be extended to key export sectors such as mining.
- LESOTHO: A NEW BEGINNING FOR THE RESTIVE MOUNTAIN KINGDOM?
- EXX Africa is in Hong Kong, speaking on opportunities for Asian investors in Africa at TXF Asia 2018
- DRC: RULING COALITION STEERS TO ELECTION VICTORY, AS OPPOSITION ALLIANCE FRACTURES
- GABON: POLITICAL TRANSITION IS UNDERWAY TO SUCCEED AILING PRESIDENT
- SPECIAL REPORT: ZAMBIA’S ROAD TO DEFAULT