Tanzania, United Republic Of 

Tanzania, United Republic Of country policy

Policy established 11 July 2007

• ILC, bank guarantee or central public guarantee (unconditional)
• The country ceiling is 1000 mln euro
• Early warning signal 75 mln euro
• - of which was used as at 2010-07-31 16 mln euro
• DSA/DSF: Public buyers at least 35% concessional

Country class: 6

Restrictions

• Special conditions, consult your accountmanager

Tanzania, United Republic Of country facts

Atradius Dutch State Business Economic Research
Country Report last updated :  16 August 2010  

Country :  TANZANIA  

Political Situation
Stable

Head of state
President Jakaya Kikwete (since December 2005). The president is chief of state, head of government and commander-in-chief of the armed forces.

Form of government
Government of CCM. De facto one party democracy. Both in the parliament of Tanganyika and Zanzibar.

Member of UN, IMF, IBRD, AfDB, WTO, AU, SADC, EAC.

Internal Economic Situation
Rather High Growth

General situation
Tanzania is a very poor country, even for African standards. Although the country is for a large part arid and unfruitful, agriculture generates 27% of GDP. Tourism has increasingly become an important source of income. The government budget is largely dependant on foreign aid. Economic growth is structurally high. Although Tanzania has built a reputation as a good student of the IMF, recent progress on structural reform is disappointing. Inflation is high at 9%.  Economic reforms has made some progress and secured debt relief, but Tanzania’s investment climate is still poor compared to other Sub Saharan countries. Insufficient infrastructure, corruption, poor legal framework and lots of red tape are the main obstacles.  The banking sector is small and shallow, but well capitalized.

External Economic Situation
Large Current Account Deficit

Main sources of foreign exchange
Gold (45% of exports), cotton (14%), coffee (3%), other agricultural products (tea, tobacco, sisal, cashew nuts), tourism.

Main foreign markets
EU 24% (Netherlands 5%), Canada (9%), India 7%, Africa (20%).

Main expenses of foreign exchange
Consumer goods (24% of imports), capital goods and transport equipment (22%), raw materials (11%), petroleum (17%).

Balance of payments 
CA deficit financed by donor inflows (grants and loans) and FDI (mainly mining). Exports have risen in recent years because of the boom in gold mining, which benefits from high gold prices. Ongoing depreciation of the shilling since end of 2008.