Business Monitor International


Tanzania Business Forecast Report

Published 26 March 2014

  • 47 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Tanzania Business Forecast Report

Core Views

  • We have made a slight downgrade to our 2014 growth forecast for Tanzania, from 7.3% to 7.1%, largely on the back of underperforming exports which, coupled with strong imports of capital goods, will see net exports remain a drag on growth. However, we maintain our outlook for robust growth on the back of investment flows into the nascent offshore gas sector.

  • We forecast that Tanzania's budget deficit will narrow from 5.1% in 2012/13 to 3.7% of GDP in fiscal 2013/14, and will remain around 4.0% over the next several years. This reduction will happen even as revenue growth is likely to disappoint this year, as a result of delays to project implementation.

  • We forecast a widening current account deficit in Tanzania in 2014 and believe that the shortfall will remain substantial over the medium term, as exports are hit by falling prices and imports related to the offshore oil and gas sectors grow. Nevertheless, inflows of foreign investment will keep the country in a balance of payments surplus.

Major Forecast Changes

  • No major forecast changes

Key Risks To Outlook

  • The 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.

  • 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 deter much-needed foreign investment. Growth would not only be disrupted by the cancellation of projects but also by a deterioration in macro stability that would result from an accompanying balance of...

Table of Contents

Executive Summary
5
Core Views
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
CCM's Dominance Challenged
8
Table: TANZANIA POLITICAL OVERVIEW
8
Long-Term Political Outlook
9
Corruption And Reliance On Foreign Money High On The Agenda
9
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
Net Exports Drag Offset By Investment
14
table: ECONOMIC ACTIVITY
14
Monetary Policy
15
table: MONETARY POLICY
16
Balance Of Payments
17
Current Account Deficit To Widen
17
TABLE: CURRENT ACCOUNT
17
Fiscal Policy
19
Project Implementation Delays To Narrow Deficit
19
table: FISCAL POLICY
19
Chapter 3: 10-Year Forecast
21
The Tanzanian Economy to 2023
21
Robust Growth In Gas Investment
21
table: Long-Term Macroeconomic Forecasts
21
Chapter 4: Business Environment
25
SWOT Analysis
25
BMI Business Environment Risk Ratings
25
Business Environment Outlook
26
Institutions
26
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS
26
Table : BMI LEGAL FRAMEWORK RATING
27
Table: LABOUR FORCE QUALITY
28
Infrastructure
29
Market Orientation
30
TABLE: ANNUAL FDI INFLOWS
30
Table: TRADE AND INVESTMENT RATINGS
31
TABLE: TOP EXPORT DESTINATIONS, 2004-2011
32
Operational Risk
33
Chapter 5: Key Sectors
35
Autos
35
Over the newly extended forecast period to 2018, BMI continues to target steady growth in new vehicle sales, which should increase by
Over the newly extended forecast period to 2018, BMI continues to target steady growth in new vehicle sales, which should increase by
some 16% between 2013 and 2018
Moving forward, we
believe that Tanzania has the potential to become a key auto logistics hub for the wider East African region over the long term, provided
believe that Tanzania has the potential to become a key auto logistics hub for the wider East African region over the long term, provided
radical changes and investment into key infrastructure are made
table: Auto Sales, 2010-2017
36
Other Key Sectors
39
Table : Pharma Sector Key Indicators
39
Table : Telecoms Sector Key Indicators
39
Table : Infrastructure Sector Key Indicators
39
Chapter 6: BMI Global Assumptions
41
Global Outlook
41
Global Growth Optimism Turning To Disappointment
41
Table: Global Assumptions
41
Table : Developed States , Real GDP Growt H, %
42
Table : BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
42
Table : Emerging Markets , Real GDP Growth , %
43

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