A large scale construction project in downtown Dar. Tanzania’s economy is poised to boom, but there are caveats. Photo: Daniel Hayduk
Numerous sources have pegged 2015 as the big year for Tanzania: but caution that political wrangling threatens it’s prospect of becoming a major economic player in Sub-Saharan Africa.
Acclaimed African investor, businessman and philanthropist Alvaro Sobrinho has ranked Tanzania as a top investment spot in the continent this year.
Praising “strong and consistent economic growth,” Sobrinho says Tanzania, “will undoubtedly be a rising force in the region in years to come.”
The International Energy Agency projects that Sub-Saharan Africa could surpass Russia in natural gas production by 2040, with much of the energy coming from Tanzania and Mozambique.
But Tanzania is accused of delaying the drafting of gas policy and setting a minimal goal of preparing only a few hundred people to work in the rising industry by 2020.
The country is also looking to hold the constitutional referendum in April, a process that has already attracted intense division between ruling and opposition parties. The general election is to be held in October.
Sobrinho remains cautious of the government’s handling of offshore natural gas projects, but commends the transport infrastructure and logistics sector saying it has seen, “massive investment and clear support.”
Recent data released by the World Bank shows Tanzania is closer to reaching middle income status than previously thought, as poverty rate dropped from 33 percent in 2007 to 28 percent in 2012.
In 2014, the economy continued to expand at a rate of 7 percent with controlled inflation of about 5 percent.
Currently, the country’s youth unemployment stands at 8.8 percent — double the national unemployment rate, according to African Economic Outlook.
World Bank Economist Jacques Morisset issued a word of caution: “The main vulnerability of Tanzania’s macroeconomic management remains it’s fiscal policy, ” says Morisset.
“It is imperative for the government to rectify this situation.”
Other countries Sobrinho says to watch in 2015 are Angola, Mauritius, Botswana and Namibia.