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COUNTRY REPORT Tanzania Comoros May 2000 The Economist Intelligence Unit 15 Regent St, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 50 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The EIU delivers its information in four ways: through our digital portfolio, where our latest analysis is updated daily; through printed subscription products ranging from newsletters to annual reference works; through research reports; and by organising conferences and roundtables. The firm is a member of The Economist Group. London New York Hong Kong The Economist Intelligence Unit The Economist Intelligence Unit The Economist Intelligence Unit 15 Regent St The Economist Building 25/F, Dah Sing Financial Centre London 111 West 57th Street 108 Gloucester Road SW1Y 4LR New York Wanchai United Kingdom NY 10019, US Hong Kong Tel: (44.20) 7830 1000 Tel: (1.212) 554 0600 Tel: (852) 2802 7288 Fax: (44.20) 7499 9767 Fax: (1.212) 586 1181/2 Fax: (852) 2802 7638 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Website: http://www.eiu.com Electronic delivery This publication can be viewed by subscribing online at http://store.eiu.com/brdes.html Reports are also available in various other electronic formats, such as CD-ROM, Lotus Notes, on-line databases and as direct feeds to corporate intranets. For further information, please contact your nearest Economist Intelligence Unit office London: Jan Frost Tel: (44.20) 7830 1183 Fax: (44.20) 7830 1023 New York: Alexander Bateman Tel: (1.212) 554 0643 Fax: (1.212) 586 1181 Hong Kong: Amy Ha Tel: (852) 2802 7288/2585 3888 Fax: (852) 2802 7720/7638 Copyright © 2000 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author's and the publisher's ability. However, the EIU does not accept responsibility for any loss arising from reliance on it. ISSN 0969-6776 Symbols for tables “n/a” means not available; “–” means not applicable Printed and distributed by Redhouse Press Ltd, Unit 151, Dartford Trade Park, Dartford, Kent DA1 1QB, UK Contents 2 Summary Tanzania 4 Political structure 5 Economic structure 5 Annual indicators 6 Quarterly indicators 7 Outlook for 2000-01 7 Political forecast 8 Economic policy outlook 9 Economic forecast 12 The political scene 14 Economic policy 16 The domestic economy 16 Economic trends 17 Agriculture 18 Mining and energy 19 Infrastructure 20 Foreign trade and payments Comoros 22 Political structure 23 Economic structure 24 Annual indicators 25 Quarterly indicators 25 Outlook for 2000-01 25 Political forecast Economic policy outlook 26 The political scene 29 Economic policy and the domestic economy List of tables 11 Tanzania: international assumptions summary 12 Tanzania: forecast summary 16 Tanzania: IMF economic projections for Tanzania 17 Tanzania: government finances, 1998-99 18 Tanzania: cashew nut production 19 Tanzania: coffee production 21 Tanzania: debt-service profile under HIPC EIU Country Report May 2000 © The Economist Intelligence Unit Limited 2000 2 List of figures 13 Tanzania: gross domestic product 13 Tanzania: Tanzanian shilling real exchange rates 17 Tanzania: total domestic revenue and grants 27 Comoros: gross domestic product 27 Comoros: Comorian franc real exchange rates EIU Country Report 2nd quarter 2000 © The Economist Intelligence Unit Limited 2000 3 May 15th 2000 Summary May 2000 Tanzania Outlook for 2000-01 The political scene will be dominated by campaigning in the lead-up to national elections on October 29th. The campaign will be relatively free and fair despite low-level harassment of the opposition parties. The ruling Chama Cha Mapinduzi (CCM) will triumph in the elections although the extent of its victory and whether the opposition parties gain a strong position in parliament will be the issues in doubt. The CCM’s Zanzibari leader, Salmin Amour, will seek to influence the selection of his successor. Political violence on the island will continue in the lead-up to the elections. Continued macroeconomic stability will ensure financial support from Tanzania’s international donors during 2000-01. Economic policy will be driven by the government’s policy commitments and macroeconomic targets agreed with the IMF under the recently agreed Poverty Reduction and Growth Facility (PRGF). Inflation is expected to continue the downward trend of recent years, reaching 5-6%. Real GDP growth will remain robust over 2000-01, driven by a recovery in the agricultural sector and expansion in mining, manufacturing and tourism. The political scene A tight timetable has been announced for electoral preparations for the October 29th elections. Political violence has continued on the island of Zanzibar. Implementation of the Commonwealth’s peace plan has been delayed. A code of conduct has been agreed for the elections. The mainland opposition parties have proposed an electoral alliance. Constitutional changes have been proposed by parliament, strengthening presidential powers. Economic policy The IMF has approved a three-year PRGF agreement for Tanzania aiming to raise growth to 6% and reduce inflation to below 5%. The government has agreed to prepare a strategy paper on poverty reduction and accelerate structural reforms including privatisation and civil service restructuring. The domestic economy The government has recorded a budget surplus before grants in the year to February. The agricultural sector has continued to perform poorly. Long-term reforms are needed to raise agricultural output and productivity. The oil refinery has been sold to a Swiss company. The privatisation of port management is proceeding. The regional airline, Alliance Air, may be closed. The controversy over the privatisation of National Commerce Bank is continuing. Foreign trade and Tanzania has been granted US$2bn in debt relief under the Heavily Indebted payments Poor Countries (HIPC) debt relief initiative. The government has reaffirmed its intention to withdraw from the Common Market for East and Southern Africa. The IMF has released US$27m in assistance to Tanzania. The EU has lifted the ban on fish imports from Tanzania. EIU Country Report May 2000 © The Economist Intelligence Unit Limited 2000 4 Comoros Outlook for 2000-01 The political crisis in Comoros will show little sign of dissipating as the military ruler, Colonel Azali Assoumane, reiterates his intention to remain in office. Efforts by the Organisation of African Unity (OAU) to mediate an end to the secession of Anjouan island will remain at an impasse while the island’s hardline leadership continues to reject compromise. The economic outlook has improved following the decision by the World Bank to support an interim programme of assistance. Greater international assistance is expected following the end to the islands’ economic isolation. The World Bank’s programme is expected to be approved in the third quarter of 2000. More extensive assistance will require further progress on structural reforms and political liberalisation and is not expected until after 2000-01. The political scene Colonel Assoumane has reneged on the promise to hand power to a civilian government by April. Opposition parties have formed a new alliance to oppose the military government. A coup attempt involving a prominent politician and French backers was put down on March 21st, but the incident has heightened anxiety regarding French mercenary activity. The political and humanitarian environment on Anjouan has worsened. The OAU has tightened sanctions on Anjouan although smuggling has remained widespread. The government has criticised the agreement by France to grant Department status to the former Comorian island of Mayotte. Economic policy and the The World Bank is preparing an 18-month Transitional Support Strategy for economy Comoros. The agreement will support social service provision, poverty reduction and administrative decentralisation to the three islands. The World Bank is proposing to extend assistance to the separatist island of Anjouan in an effort to halt social deterioration and convince the island’s leadership of the benefits of co-operation. Editor: Douglas Mason Editorial closing date May 15th 2000 All queries: Tel: (44.20) 7830 1007 E-mail: [email protected] Next report: Full schedule on www.eiu.com/schedule EIU Country Report May 2000 © The Economist Intelligence Unit Limited 2000 Tanzania 5 Tanzania Political structure Official name United Republic of Tanzania Form of state Republic, formed by the 1964 union of Tanganyika and Zanzibar Legal system Based on English common law, the 1977 Union and 1985 Zanzibari constitutions, as amended National legislature National Assembly, comprising 269 members (232 directly elected and 37 women appointed); elected members are chosen by Union-wide adult suffrage every five years; Zanzibar has its own House of Representatives of 59 members (nine women appointees), which legislates on internal matters National elections October-November 1995 (legislative and presidential); next
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