On 1st April 2023 we assessed “the future really is looking bright in the country right now… All of this can be directly traced back to President Hassan’s desk. Her government’s policies of simplifying the business licensing process teamed with her commitment to grow and diversify the economy are really beginning to pay off… The Central Bank reported foreign reserves of USD4.8 billion at the end of January 2023. Inflation dropped slightly in February to 4.8% down from 4.9% the previous month. The economic outlook is good and we expect to see 1st quarter growth.”
On 1st July 2023 we continued “President Hassan has now been in power for more than 2 years. Her political and policy changes have transformed her country. Tanzania’s image has never been better. Hassan shaped her domestic and international agenda using what she calls “the four Rs”; reconciliation, resilience, reforms and rebuilding… We anticipate strong economic growth throughout 2023 which, in turn, will generate consumer spending. The Tanzanian economy is thriving but there will be a few bumps along the way. We expect The Bank of Tanzania to increase interest rates.” At the time of writing interest rates were 5%. We also said “inflation too is calming down. Back in January it was at 4.9%. By New Year’s Eve we see this sitting at [maximum] 3.7%.”
By 31st December 2023, the Annual Headline Inflation Rate had decreased to 3.0%. By 19th January 2024 interest rates rose to 5.5%. On 1st April 2024, we said “Tanzania continues to set new standards in Africa and beyond. Hassan’s modern and interactive style of governance is making people sit up and take notice.
Neighbouring countries would be well served to watch and learn. Under Hassan’s strong and stable leadership, Tanzania has taken great leaps forward and people are now beginning to reap the physical rewards for her hard work… Hassan’s government is setting the benchmark for governance in Africa and they are setting it high.”
On 1st April 2024 “we expect the domestic economic outlook for 2024 to remain strong. We project that output growth on the mainland will hit around 5.5% and reach 7.4% in Zanzibar.” By 4th April that year, The Bank of Tanzania again raised its key interest rate by 50 bps to 6%, marking its highest level since April 2020.
So, what do we see now? The economy has grown by around 5% in 2023 up from 4.7% in 2022. When the next numbers are announced we expect that to have increased by around 5.1% more. And all of that supported by President Hassan’s policies and commitment to public investment, particularly in infrastructure, all of it aided by increased private sector investment. President Hassan has been the breath of fresh air that Tanzania has desperately needed after decades of poor management. She has literally turned her country around since the death of her predecessor, Magafuli. Our one concern? That electoral reforms that President Hassan is rightly bringing in could end up seeing her lose the next election, and Tanzania returning to the malaise it suffered prior to her succeeding Magafuli. Ironically, Hassan’s success could be hers, and Tanzania’s, undoing.
