Business Monitor International


Tanzania Business Forecast Report

Published 16 December 2014

  • 47 pages
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$1,195.00
Tanzania Business Forecast Report

Core Views

  • Tanzania's economy will see real growth of 6.9% in 2015 and 7.3% in 2016. Our 2015 forecast has been revised down in the wake of the power scandal troubling the country's government, which has led to funds being withheld by international donors.

  • Rising uncertainty over future energy policy in Tanzania runs the risk of pushing back crucial investment into the offshore gas sector. Although we believe that CCM will win the October 2015 elections, a united opposition will lead to increasing resource nationalism in campaigning.

  • Monetary policy in Tanzania, executed primarily through open market operations and sales of foreign exchange, will continue to be relatively tight in 2015 as the Bank of Tanzania looks to bring in inflation. It will be aided in this aim by falling global oil prices.

Major Forecast Changes

  • Real GDP growth in 2015 has been revised down from 7.3% to 6.9%.

Key Risks To Outlook

  • A salient risk to our forecasts stems from the ongoing scandal in the power sector, which has led foreign donors to withhold financial support. This has led to a sell-off of the shilling, and has reduced macroeconomic stability.

  • A major risk to our economic outlook comes from the weather. Poor rains would not only exacerbate tight food supplies (food price inflation was the major driver of rapidly rising headline inflation in 2011) but would also once again hamper hydroelectricity production, raising costs for businesses and, by extension, consumers.

  • The country's infrastructure deficit is another concern; a failure to make significant progress would likely hold the economy back from reaching its significant potential.

  • The uncertainty regarding the constitutional review process is jeopardising investment flows.

  • A meaningful deterioration in Tanzania's investment profile as a result of protests against major investment projects or as a result of a more populist approach to policymaking could also deter much-needed foreign investment.

...

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Index
7
Domestic Politics
8
Resource Nationalism Will Rise As Elections Near
8
Rising uncertainty over future energy policy in Tanzania runs the risk of pushing back crucial investment into the offshore gas sector
Although we believe that CCM will win the October 2015 elections, a united opposition will lead to increasing resource nationalism in
Although we believe that CCM will win the October 2015 elections, a united opposition will lead to increasing resource nationalism in
campaigning
Table: POLITICAL OVERVIEW
8
Long-Term Political Outlook
10
Corruption And Reliance On Foreign Money High On The Agenda
10
Tanzania will continue to enjoy broad political stability over the coming decade, with little to suggest that the ruling Chama Cha
Tanzania will continue to enjoy broad political stability over the coming decade, with little to suggest that the ruling Chama Cha
Mapinduzi party's authority will be threatened
Chief among these
will be dealing with high levels of corruption and addressing the country's dependence on foreign aid
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Index
13
Economic Activity
14
Withheld Donor Funds Will Impinge On 2015 Growth
14
Tanzania's economy will see real growth of 6
Our 2015 forecast has been revised down in the wake of
the power scandal troubling the country's government, which has led to funds being withheld by international donors
table : Economic Activity
14
Exchange Rate Policy
15
TZS: Looking Technically And Fundamentally Weak
15
The Tanzanian shilling is looking weak as withheld funding from international donors has prompted a break through major technical
The Tanzanian shilling is looking weak as withheld funding from international donors has prompted a break through major technical
support
TABLE: CURENCY FORECAST
15
Monetary Policy
17
5
17
Monetary policy in Tanzania, executed primarily through open market operations and sales of foreign exchange, will continue to be
Monetary policy in Tanzania, executed primarily through open market operations and sales of foreign exchange, will continue to be
relatively tight in 2015 as the Bank of Tanzania looks to bring in inflation
table : Monetary Policy
17
Fiscal Policy
19
Delays To Budget Support Threaten Economic Growth
19
The withholding of general budget support aid by international donors increases risk to economic growth in Tanzania, as it is public
The withholding of general budget support aid by international donors increases risk to economic growth in Tanzania, as it is public
investment that will suffer
Chapter 3: 10-Year Forecast
21
The Tanzanian Economy To 2023
21
Robust Growth Forecast On Gas Investment
21
We are forecasting a period of robust growth in the Tanzanian economy in the years ahead, as the country looks set to benefit from its
We are forecasting a period of robust growth in the Tanzanian economy in the years ahead, as the country looks set to benefit from its
nascent offshore gas sector, and the investment being pumped in to the country to develop this
table : Long-Term Macroeco nomic Forecasts
21
Chapter 4: Operational Risk
25
Operational Risk Index
25
Operational Risk
26
TABLE: Operational Risk
26
Transport Network
27
TABLE: SSA Transport Network Risks
28
Economic Openness
31
table : Sub -Saharan Africa - Economic Opennes
32
Table : Top 5 Product Exported (USDmn)
33
table : Top 5 Trade Part ners Product Imports (USDmn)
34
Chapter 5: Key Sectors
37
Infrastructure
37
table: Infrastructure & Construction Industry Data
38
table: Infrastructure & Construction Industry Data
38
Other Key Sectors
41
Table: Oil & Gas Sector Key Indicators
41
table : Pharma Sector Key Indicators
41
table : Telecoms Sector Key Indicators
42
table: Food & Drink Sector Key Indicators
42
table: Autos Sector Key Indicators
42
Chapter 6: BMI Global Assumptions
43
Global Outlook
43
Warning Signs Growing
43
Table : Global Assumptions
43
Table: Developed States, Real GDP Growth, %
44
Table : BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
44
Table : Emerging Markets , Real GDP Growth, %
45

The Tanzania Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in The Tanzania and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of The Tanzania's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of The Tanzania's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise The Tanzania's country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in The Tanzania, including currency volatility, the commodity price boom and protectionist policies.

The Tanzania Business Forecast Report by Business Monitor International (BMI) includes three major sections: Economic Outlook, Political Outlook and Business Environment.

Economic Outlook:

How will the Tanzanian economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for The Tanzania through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Tanzania Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for The Tanzania and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on The Tanzania, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in The Tanzania over the next 5-years?

BMI's The Tanzania country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Tanzanian Market - Political Strengths, Weaknesses, Opportunities and Threats facing The Tanzania.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for The Tanzania's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark The Tanzania's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for The Tanzania, benchmarked against ratings for regional neighbours.

Country Competitiveness - Competitiveness of The Tanzania's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express