Political crackdown harms Tanzania's infrastructure ambitions
A number of contentious political reforms under president John Magufuli have weakened investor enthusiasm for Tanzania in recent years.
The populist policies of president John Magufuli have given investors cause for concern
Tanzania will find it difficult to fulfil its huge infrastructure needs in the short to medium term given its challenging political situation, which has led to international investors and multilateral donors distancing themselves from the country, say analysts.
President John Magufuli – nicknamed the 'Bulldozer' due to his tough stance on corruption – has introduced a swathe of populist policy measures since his election in 2015, giving international investors cause for concern, with many of them pulling out of Tanzania or taking a 'wait and see' approach to investing in the country.
"Investor sentiment on Tanzania has weakened since 2014," says George Bodo, director at Callstreet Research and Analytics. "This is best captured in foreign private inflows (FPI) into Tanzania. FPI began falling in 2014, just a year before elections, and plunged below $1 billion just after Magufuli began his violent reform programme."
"Foreign direct investment (FDI), which accounts for over 90% of FPIs on average terms, took a similar pattern and fell below $1 billion in 2016," he adds.