As economies across the continent slipped into recession in 2020, Tanzania reaped from its policy of not imposing COVID-19 related restrictions and nationwide curfews, recording the fastest economic growth in Africa.
According to the World Bank, Tanzania’s economy grew by 2% in 2020 and Mara Warwick, World Bank country director for Tanzania, Malawi, Zambia and Zimbabwe projects economic ouput will continue soaring this year to 5.3%
“We expect real GDP for 2021 to fall in the range of 3 to 5.3% with realisation on the upper side of this range hinging on the strong recovery in the global economic activity supported by the roll out of the vaccine globally,” Warwick said during the launch of a report on the country’s economy.
Tanzania’s President John Magufuli has long been criticized by the media and civil society of “COVID denials” and on Thursday, opposition leader Tundu Lissu, who fled the country after the contested polls in October, warned the head of state had tested positive and was flown to India to receive further treatment.
“The most powerful man in Tanzania is now being sneaked about like an outlaw,” Mr. Lissu said in a Twitter post on Wednesday. “His COVID denialism in tatters, his prayer-over-science folly has turned into a deadly boomerang,” he said in another post on Thursday.
Tanzania’s government has yet to comment on reports on the disappearance of Magufuli who was last seen in the public on February 27 at a swearing in ceremony for his new chief of staff.
But Magufuli’s approach has been defended in some quarters as being “prudent and realistic”, cushioning his developing country from the economic effects of the pandemic.
“I don’t think anything would change even if he stuck to the script that people demand of him. Covid-19 has proven challenging for any leader across the world to manage, and these measures are not water proof as seen elsewhere in Europe and China,” Clement Mgange said.
American multinational investment firm Citi also downplayed the extent of COVID-19 in Tanzania. In its published Africa Economics Strategy Weekly, it said, “While public debate on COVID-19 seems to have ended, in late January 2021, the World Health Organization (WHO) formally encouraged the Tanzanian government to prepare for the vaccine and put preventative measures to protect their population. Dar es salaam was also requested to share data on the COVID-19 situation with WHO and neighbouring countries.”
Whatever the actual state of affairs, Citi says the reality in Tanzania seems to be that the hospitals have not been overwhelmed by COVID-19 cases.
However, lower tourist arrivals and lockdowns in the regional trading partners still mean that growth even slowed marginally in 2020.
Notably, growth in the accommodation and restaurants sub-sector of GDP did collapse significantly in 2020. But sectors that were heavily impacted by national lockdowns in other African countries, such as construction or retail and wholesale trade, were only modestly affected in Tanzania.
In contrast to Ethiopia and Tanzania and except Egypt, Citi Research analysts say North African and Southern African economies have seen some of the sharpest contractions in real GDP in 2020.
Morocco was the first African country to publish full 2020 national accounts data, which shows that GDP contracted by 7%. This is very similar to Citi’s current forecast for a contraction of 7.2% in the South African economy in 2020.
The contraction in GDP for the smaller open economies in Northern and Southern Africa, such as Botswana and Tunisia, is likely to be marginally above these contractions. But the most severe contractions are still likely to be in the small tourist-dependent island economies. Data for Q1-Q3 2020 for Mauritius indicate that real GDP is expected to contract somewhere in the region of 13-15% in 2020.
Magufuli’s economic record
Warnick, World Bank country director said Tanzania had low debt and fiscal deficit levels as well high foreign reserves. These, combined with high prices for gold, one its major exports, would strengthen its recovery.
Tanzania, however, needed to prepare to roll out vaccinations like other countries to help save lives and stem COVID-19, she said. The World Health Organisation (WHO) however, excluded Tanzania from the list of African countries set to receive COVID-19 vaccines through its COVAX scheme.
“We would strongly advise the government to proactively engage with technical partners to prepare a plan for deploying a COVID-19 vaccine in Tanzania,” she said.
Before Magufuli was sworn in 2015 to begin his first term, Tanzania’s economy was still in the Least Developed Countries (LDC) category, and in 2018, it rose to become a lower middle income economy following exponential economic growths of more than 6.8% recorded in each year of President Magufuli’s term in office.
In January, Tanzania announced two Chinese farms had won the contract to construct a $1.32 billion modern rail that would be fully paid by the government.
State of democracy
But economic progress in Tanzania has come at a cost to its democracy and freedoms. Once a beacon of stability in a volatile region, the country was plunged into chaos, following a contested election in October which President Magufuli was unsurprisingly declared the winner.
Security forces in Tanzania clamped down hard on political dissent killing dozens, and a nationwide internet ban was imposed on Election Day. Tundu Lissu himself spent the last three years in self-imposed exile after he survived an assassination attempt.