11 March 2019

Tanzania: Shaky 2019 for Tanzania Relations

Tanzania relations with the international community could be more strained in 2019, due to its "poor commitment to democracy, lack of openness to foreign investment, and adoption of protectionist policies," says a report by UK-based think tank Economist Intelligence Unit (EIU).

According to the think tank, Tanzania will become a difficult place for the private sector.

EIU says that the government's inward-looking policies, anti-gay stance and a controversial legislation that bans pregnant girls from attending school, have upset international trading partners.

The report released mid-February, came as President John Magufuli moved to mend fences with bilateral partners after a tumultuous 2018.

Last week, the president moved former university law lecturer Prof Palamagamba Kabudi from the Legal Affairs Ministry to Foreign Affairs, swapping places with career diplomat Augustine Mahiga.

Prof Kabudi's primary task is seen as countering the growing discomfort among donors and bilateral lenders with the Magufuli administration.

Prof Kabudi's new docket places him in charge of East African Community (EAC) matters, and the EIU predicts Tanzania's economic relations with fellow EAC member states will remain broadly cordial, despite occasional trade disputes with some of them.

The EIU says abrupt tax increases, erratic regulatory changes and lack of transparency may undermine the government's own Development Vision 2025 plan which prioritises industrialisation and job creation under a private-sector-led development strategy.

According to the report, the mining industry will be a particular victim of this agenda, with a ban on unprocessed mineral exports and a strict regulatory framework eroding the sector's attractiveness.

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