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Tanzania Comoros COUNTRY REPORT Tanzania Comoros The full publishing schedule for Country Reports is now available on our website at http://www.eiu.com/schedule. 1st quarter 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 subscription products ranging from newsletters to annual reference works; through specific research reports, whether for general release or for particular clients; through electronic publishing; 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 EIU Electronic New York: Alexander Bateman Tel: (1.212) 554 0600 Fax: (1.212) 586 1181 London: Jan Frost Tel: (44.20) 7830 1183 Fax: (44.20) 7830 1023 This publication is available on the following electronic and other media: Online databases NewsEdge Corporation (US) Microfilm FT Profile (UK) Tel: (1.718) 229 3000 World Microfilms Publications Tel: (44.20) 7825 8000 (UK) DIALOG (US) CD-ROM Tel: (44.20) 7266 2202 Tel: (1.415) 254 7000 The Dialog Corporation (US) LEXIS-NEXIS (US) SilverPlatter (US) Tel: (1.800) 227 4908 M.A.I.D/Profound (UK) Tel: (44.20) 7930 6900 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 1 Contents 3 Summary Tanzania 5 Political structure 6 Economic structure 6 Annual indicators 7 Quarterly indicators 8 Outlook for 2000-01 12 The political scene 14 Economic policy 17 The domestic economy 17 Economic trends 18 Agriculture 19 Mining and energy 20 Infrastructure 21 Financial and other services 22 Foreign trade and payments Comoros 24 Political structure 25 Economic structure 25 Annual indicators 25 Quarterly indicators 26 Outlook for 2000-01 27 The political scene 31 Economic policy and the economy 33 Aid news 33 Trade data List of tables 8 Tanzania: forecast summary 11 Tanzania: prices for main export crops 11 Tanzania: gold production 16 Corruption perception index: African countries, 1999 19 Tanzania: cotton production 19 Tanzania: tobacco production 22 Tanzania: tourist visitors EIU Country Report 1st quarter 2000 © The Economist Intelligence Unit Limited 2000 2 22 Tanzania: trade balance 33 Tanzania: foreign trade 34 Tanzania: UK trade 35 Comoros: foreign trade 35 Comoros: French trade List of figures 12 Tanzania: gross domestic product 12 Tanzania: Tanzanian shilling real exchange rates 17 Tanzania: weightings for consumer price index 18 Tanzania: exchange rate 27 Comoros: gross domestic product 27 Comoros: Comorian franc real exchange rates EIU Country Report 1st quarter 2000 © The Economist Intelligence Unit Limited 2000 3 February 18th 2000 Summary 1st quarter 2000 Tanzania Outlook for 2000-01 Proposed constitutional changes and the status of Zanzibar will feature prominently on the domestic political front in the lead-up to elections in October. The Zanzibari president, Salmin Amour, will manipulate his supporters to push for a constitutional change allowing him to stand for a third term. This is unlikely to be successful, although it will put him in a stronger position to name his own successor. The failure firmly to quash the issue will weaken the authority of the president, Benjamin Mkapa, within the ruling party. The elections are expected to be broadly fair, although the harassment of opposition will continue. The ruling CCM (Chama Cha Mapinduzi) has commanding advantages as the incumbent party in the upcoming election campaign and will easily win re-election. The positive economic performance of 1999 will continue into 2000. Real GDP growth is expected to rise to 5.2%, driven by strong contributions from the fast-growing mining and tourism sectors, which will mask the ongoing underperformance of agriculture. Inflation is expected to be low, falling to roughly 7.1% in 2000. Low international commodity prices will depress agricultural export earnings in 2000. However, a sharp rise in gold exports and improvement in the services balance will narrow the deficit on the current account to $541m in 2000. Economic performance should pick up in 2001 on the assumption of favourable agro-climatic conditions and agricultural policy reforms. Combined with ongoing strong contributions from tourism and mining, real GDP growth could reach 5.7%. decisive The political scene The government has announced an election date of October 29th 2000. The harassment of opposition parties on both Zanzibar and the mainland has continued. A new influx into north-west Tanzania of refugees fleeing the Burundian civil war has occurred. Nelson Mandela has been appointed mediator in the Burundian peace talks in Arusha, replacing the Tanzania’s late president, Julius Nyerere. Economic policy The government has announced the liberalisation of the domestic fuel import market. The extremely high cost of electricity in Tanzania has been highlighted in two separate studies. According to the government, the liberalisation of the electricity sector will not take place for another three years. The World Bank has announced measures to support private-sector development. Measures are to be introduced to tighten tax collection. The government has announced an anti-corruption strategy. The domestic economy Inflation has fallen in 1999 to 7.9% from 13.5% in 1998, prompted largely by falls in food prices. The shilling has experienced some fluctuation over the past year due to weak international commodity prices for Tanzania’s main agricultural exports. The contribution of the manufacturing sector to the EIU Country Report 1st quarter 2000 © The Economist Intelligence Unit Limited 2000 4 economy has been substantially underestimated, according to new research. Food production recovered in 1999 from the drought conditions of the year before. The value of gold production doubled in 1999 to $74m. A third company has been listed on the stock exchange. Tourism growth has slackened after several years of rapid growth. Foreign trade and Exports fell 8.8% in 1999, driven by the impact of low agricultural commodity payments prices. Regional economic integration has been aided by the signing of the East African Co-operation Treaty in November by the heads of state of Tanzania, Uganda and Kenya. Comoros Outlook for 2000-01 The refusal of separatist leaders on the island of Anjouan to compromise and sign the Antananarivo peace agreement will ensure continued deadlock despite increased international efforts to find a solution. The Organisation of African Unity will proceed cautiously with its threat to intervene militarily. Pressure will be maintained on the military ruler, Colonel Azali Assoumane, to hand over power to a civilian government. The clearing of arrears to the World Bank has opened the way for the resumption of assistance from the World Bank. However, economic prospects for 2000-01 remain poor. The economy will continue to suffer from political instability, sanctions on the island of Anjouan and stiff competition from other tourism destinations in the Indian Ocean. The political scene The diplomatic isolation of Comoros which followed the military coup of last year has been maintained by neighbouring states in the Indian Ocean Commission. Colonel Assoumane has responded to international pressure by appointing a prime minister and bringing more civilians into cabinet. Other opposition leaders, including the former prime minister, Abbas Djoussouf, have refused to join the government. Separatist leaders on Anjouan have ignored an ultimatum from the Organisation of African Unity, which has imposed sanctions. The separatist leader, Colonel Said Abeid, has held a referendum which rejected the Antananarivo peace agreement, although the legitimacy of the result has not been accepted by the international community. Economic policy and the The government is continuing with efforts to increase revenue and rationalise economy expenditure. An audit of the civil service payroll has removed ghost workers, reducing costs by 14%. The World Bank is to resume assistance to Comoros following the payment of arrears by the government. Editor:
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