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Tanzania Comoros COUNTRY REPORT Tanzania Comoros 3rd quarter 1997 The Economist Intelligence Unit 15 Regent Street, 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 Street 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, USA Hong Kong Tel: (44.171) 830 1000 Tel: (1.212) 554 0600 Tel: (852) 2802 7288 Fax: (44.171) 499 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 Publishing New York: Lou Celi or Lisa Hennessey Tel: (1.212) 554 0600 Fax: (1.212) 586 0248 London: Moya Veitch Tel: (44.171) 830 1007 Fax: (44.171) 830 1023 This publication is available on the following electronic and other media: Online databases CD-ROM Microfilm FT Profile (UK) Knight-Ridder Information World Microfilms Publications (UK) Tel: (44.171) 825 8000 Inc (USA) Tel: (44.171) 266 2202 DIALOG (USA) SilverPlatter (USA) Tel: (1.415) 254 7000 LEXIS-NEXIS (USA) Tel: (1.800) 227 4908 M.A.I.D/Profound (UK) Tel: (44.171) 930 6900 Copyright © 1997 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 4 Political structure 5 Economic structure 6 Outlook for 1997-98 9 Review 9 The political scene 11 The economy 12 Finance 14 Agriculture 16 Mining 16 Energy and water 17 Tourism and transport 18 Foreign trade, aid and payments Comoros 20 Political structure 21 Economic structure 22 Outlook for 1997-98 23 Review 23 The political scene 28 The economy 30 Foreign trade and payments 31 Quarterly indicators and trade data List of tables 8 Tanzania: forecast summary (domestic) 8 Tanzania: forecast summary (external) 13 Tanzania: Union government recurrent budget 14 Tanzania: world coffee stocks and prices, 1997 15 Tanzania: cash crop purchases 18 Tanzania: foreign reserves, Jun 31 Tanzania: quarterly indicators of economic activity 31 Comoros: quarterly indicators of economic activity 32 Tanzania: foreign trade 33 Tanzania: UK trade 33 Comoros: foreign trade 34 Comoros: French trade EIU Country Report 3rd quarter 1997 © The Economist Intelligence Unit Limited 1997 2 List of figures 9 Tanzania: gross domestic product 9 Tanzania: Tanzanian shilling real exchange rates 13 Tanzania: government recurrent budget trends 22 Comoros: gross domestic product 22 Comoros: Comorean franc real exchange rates EIU Country Report 3rd quarter 1997 © The Economist Intelligence Unit Limited 1997 3 August 20, 1997 Summary 3rd quarter 1997 Tanzania Outlook for 1997-98: Tensions will continue to mount in Zanzibar as long as the government refuses to annul the controversial 1995 presidential election. If the president, Benjamin Mkapa, fails to take decisive action on the issue, he risks alienating international donors, who have intimated that a resolution to the impasse may soon become a condition of further development assistance. Continued unfavourable weather conditions will depress real GDP growth in 1997 and 1998, although strong growth in the industrial sector is anticipated. Review: A second report has been published by the Warioba commission on corruption. The NCCR has accused several prominent government figures of graft. The ruling CCM has been accused of accepting donations from inter- national drug-traffickers in return for allowing freer movement of drugs through Zanzibar. The Zanzibari government has raised the minimum wage by 33%. Year-on-year inflation fell to 17.2% in April. The UN World Food Programme has warned of migrations to urban centres due to food shortages, and of a possible famine in the coming months. Coffee exports have fallen, and cut flower exports have boomed. Mr Yona presented a sound if optimistic budget to parliament in June, setting stringent revenue and expenditure targets and slash- ing the rate of corporate tax to 30%. The government has signed a $50m mining contract with foreign firms for gold prospecting. There has been further squab- bling between the country’s two main air carriers. Foreign exchange reserves soared to $460m in June. Comoros Outlook for 1997-98: The president, Mohamed Taki Abdulkarim, is unlikely to grant independence to the islands of Anjouan and Mohéli, but faces difficult bargaining with separatists, who have appealed to France to be reunited with their former coloniser. Unless the government meets tough macroeconomic targets, it will probably fail to qualify for an ESAF from the IMF. Review: Mr Taki has tried to mend relations with the opposition in a bid to widen his support base. The Islamist FNJ party has become increasingly popular, appealing to Comorians’ disdain for rampant government corruption by pro- moting traditional Islamic values. Mr Taki has held talks with leaders of several Gulf Arab states to try to increase aid inflows. Comoros has dropped plans for a scheme to offer nationality to Hong Kong Chinese citizens. Investigations into the mismanagement of public funds has led to one arrest and several detentions. Attempts by Anjouanais to cross the ocean to the French collectivité territoriale of Mayotte have risen sharply. Anjouan and Mohéli have declared inde- pendence and have asked to be reabsorbed under French rule. The government has undershot several key macroeconomic targets set by the IMF. The financing requirement for 1997/98 is estimated at Cfr380m. The value of exports plum- meted by 42.5% in 1996 due to lower prices for key cash crops. Editor: Noah Beckwith All queries: Tel: (44.171) 830 1007 Fax: (44.171) 830 1023 EIU Country Report 3rd quarter 1997 © The Economist Intelligence Unit Limited 1997 4 Tanzania 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 elections due 2000 (legislative and presidential) Head of state President, elected by universal adult suffrage every five years National government The president, vice-president and Council of Ministers; last reshuffle February 1997 Main political parties The ruling Chama Cha Mapinduzi (CCM); Civic United Front (CUF); National Convention for Construction and Reform (NCCR-Mageuzi); United Democratic Party (UDP); Chama Cha Demokrasia na Maendeleo (Chadema) President Benjamin Mkapa Vice-president Omar Ali Juma Prime minister Frederick Sumaye Key ministers Agriculture & cooperatives Paul Kimiti Communications & transport William Kusila Community development, women’s affairs & children Mary Nagu Defence Edgar Majogo Education Juma Kapuya Energy & minerals Abdallah Kigoda Finance & planning Daniel Yona Foreign affairs Jakaya Kikwete Health Aaron Chiduo Home affairs Ali Ameir Mohammed Industry & trade William Shija Justice & constitutional affairs Bakari Mwapachu Labour & youth development Sebastian Kinyondo Lands, housing & urban development Gideon Cheyo Natural resources & tourism Zakia Meghji Science, technology & higher education Jackson Makweta Water & livestock development Pius Ng’wandu Works Anna Abdallah Central bank governor Idris Rashid EIU Country Report 3rd quarter 1997 © The Economist Intelligence Unit Limited 1997 Tanzania 5 Economic structure Latest available figures Economic indicators 1992 1993 1994 1995 1996 GDP at market pricesa TSh bn 1,131 1,404 1,823 2,395 n/a Real GDP growtha % 3.8 3.9 3.0 4.5 4.7 Consumer price inflationa % 21.8 25.3 33.0 29.8 19.6 Population m 27.2 28.0 28.8 29.7b 30.6b Exports fob $ m 400 439 519 683 762 Imports cif $ m 1,510 1,465 1,505 1,541 1,394 Current account $ m –704 –770 –681 –629 –575b Reserves excl gold $ m 327.3 203.3 332.1 270.2 440.1 Total external debt $
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