Domestic Politics

As in the two preceding years, president John Pombe Magufuli and his subordinates continued to focus on the fight against corruption, fraud, embezzlement of public funds, indiscipline, negligence, and related vices. Again, the president sacked several high-ranking officials, among them ministers, deputy ministers, heads of government agencies, and Tanzania’s high commissioner to Canada. In June, following reports of embezzlement and forgery in the implementation of a water project in Dar es Salaam, the water and irrigation minister Isack Kamwelwe sacked the city’s Water and Sewerage Authority chief executive officer and dissolved the authority’s board of directors. In July, home affairs minister Mwigulu Nchemba was replaced by the former deputy minister of state for union affairs and environment, Kangi Lugola, who became the third home affairs minister in less than three years. President Magufuli deplored numerous problems in the Ministry of Home Affairs, such as irregularities in procurement, a lack of effectiveness in the prevention of the ever-increasing number of road accidents, and ineffective fire brigades. In early November, Magufuli fired the agriculture and trade ministers Charles Tizeba and Charles Mwijage and dissolved the Cashewnut Board of Tanzania for allegedly failing to manage the cashew-nut industry competently (see Socioeconomic Developments). After a heavily overloaded ferry capsized on Lake Victoria on 20 September, Magufuli dissolved the boards of two regulatory bodies, the Tanzania Electrical, Mechanical and Electronics Services Agency and the Surface and Marine Transport Regulatory Authority (Sumatra), sacked the Sumatra chairman, and ordered the arrest of the ferry management. The accident, which led to the deaths of over 220 people, was just the latest in a series of severe ferry disasters in Tanzania.

Dissatisfied with the low number of corruption cases so far brought before the courts, Magufuli replaced the head of the Prevention and Combat of Corruption Bureau (pccb) in early September. He ordered the new director, Diwani Athumani, a high-ranking police officer, to clean the pccb from corrupt employees. The sacked director, Valentino Mlowola, had been appointed to that position by Magufuli only in December 2015. Tanzania continued to improve in ti’s ‘Corruption Perceptions Index’, ranking 99/180 countries, up from 103 in 2017 and 117 in 2015.

As in previous years, opposition parties were significantly weakened by numerous defections to the long-ruling Chama cha Mapinduzi (ccm; Revolutionary Party), including 10 mps and more than 200 local councillors. Defectors suggested that they had done so either because they supported Magufuli’s policies or because they were dissatisfied with the opposition. The opposition, however, accused the ccm of having bribed the defectors, but without providing any proof.

ccm won almost all by-elections (held due to a legislator’s death or defection to another party). Most opposition parliamentarians who had defected to ccm regained their constituencies. This resulted in a steadily decreasing number of opposition representatives in parliament and local councils. The opposition filed joint candidates in some by-elections; it complained about various irregularities, a massive presence of armed police, the intimidation of voters and candidates, and the beating or arrest of their party’s observers by security forces. Following a parliamentary by-election and more than 30 local by-elections in Kigoma Region on 12 August, the us embassy issued a statement of concern about the conduct of the by-elections, criticising violence, intimidation of opposition party members by police, unwarranted arrests, suppression of the freedoms of assembly and speech, and the refusal by National Electoral Commission (nec) authorities to register opposition candidates. The nec rejected the allegations and challenged the embassy to prove the accusations. The main opposition party, Chama cha Demokrasia na Maendeleo (chadema; Party for Democracy and Progress) and the small Alliance for Change and Transparency – Patriots (act-Wazalendo), led by the popular politician Zitto Kabwe, finally boycotted some of the by-elections.

By-elections in Dar es Salaam’s Kinondoni constituency and in Siha constituency in Kilimanjaro Region on 17 February became necessary after the defection of the respective opposition mps to the ccm. In both constituencies, which had been opposition strongholds, the defectors regained their seats on the ccm ticket. However, voter turnout was very low. Both by-elections took place in an atmosphere of severe tension and were accompanied by several incidents of political violence, raising fears of an increasing deterioration in the domestic political climate. On 14 February, just prior to the by-elections, the body of a local chadema councillor and campaigner for his party’s candidate in Kinondoni was found on an Indian Ocean beach in Dar es Salaam. Together with another chadema supporter, he had been kidnapped, tortured, and then dumped on that beach. This other person, however, survived the attack after being left for dead. The public received the murder with shock and fear, and the police promised to investigate the case. chadema leaders accused the ccm of being behind the murder. The us embassy expressed its concern about the rise in politically related confrontations and violence and called for a transparent investigation. However, the situation escalated further on 16 February, the day before the fiercely contested by-elections, when chadema supporters demonstrated in Dar es Salaam for the accreditation of their election observers. The police tried to disperse the demonstration violently, using tear gas and live ammunition. A 21-year-old university student was killed by a stray police bullet while passing by in a commuter bus, and at least four other people were injured. The following day, 6 police officers and 40 chadema supporters were arrested. Magufuli directed the police to conduct swift investigations and to take legal action against the people responsible for the student’s death. However, the police closed the investigation in late July without any prosecution.

The death of the uninvolved university student caused a public outcry. It was seen as the latest tragic incident in an accelerating downward spiral of increasing conflict, violence, and restrictions against democracy and human rights, since the attempted assassination of a senior chadema politician and the forced disappearance of a journalist in late 2017 and mysterious and unsolved killings in Coast Region in 2016–17, with all cases remaining unsolved. On 21 February, over 100 civil society organisations issued a joint petition in which they expressed their serious concern about the deteriorating human rights situation, violations of the rule of law, and the security of citizens in Tanzania. Two days later, the ambassadors of the eu, Canada, Norway, and Switzerland jointly issued a similar statement about the rise in politically related violence and intimidation. A few days earlier, the Tanzania Episcopal Conference had warned President Magufuli against violations of democratic principles, freedom of expression, and media freedom. In a proclamation on 15 March, 27 bishops of the Evangelical Lutheran Church in Tanzania (elct) called on the security forces to protect the lives of Tanzanians and to investigate the killings, attempted assassinations, abductions, and torture. Also, religious leaders of other Christian and Muslim organisations called on the government to act against the increasing human rights violations. The government, however, warned religious leaders not to mix religion and politics. In a statement in early March, foreign minister Augustine Mahiga criticised Tanzania’s “guest partners” – the us, eu, and other Western embassies – for issuing “unverified, sensational and … inciting statements” and for not fully understanding Tanzania’s complex security and political challenges. According to Mahiga, reports about human rights violations were perpetuated by “powerful elements inside and outside the country”, enraged by Magufuli’s crusade against corruption, tax evasion, drug trafficking, and related vices. On 22 February, the human rights defender and chadema politician Godfrey Luena was hacked to death with machetes by unknown assailants outside his home in Morogoro Region. Previously, he had been subjected to multiple arrests, judicial harassment, and intimidation due to his work as a land rights activist.

While civil society organisations, opposition parties, and the international donor community held the government responsible for the increased tensions and the escalation of violence, the government put the blame on the opposition, by outlawing the demonstration that had led to the student’s death. On 28 March, eight senior members of chadema , including party chairman and mp Freeman Mbowe, secretary general Vincent Mashinji, and several mps, were arrested and accused of nine charges, including staging the ‘illegal’ demonstrations of 16 February and inciting violence. After seven days they were released on bail, on condition that they report weekly to the court in Dar es Salaam. However, on 23 November, Mbowe and mp Esther Matiko were arrested again for allegedly violating bail conditions and by year’s end had not been released.

The opposition was subjected to constant judicial harassment. On 26 February, mp Joseph “Sugu” Mbilinyi (chadema, Mbeya) and the chadema regional party secretary Emmanuel Masonga were sentenced to five months in jail for using abusive language against Magufuli. They were released only after 73 days. Also, act-Wazalendo leader Zitto Kabwe was arrested several times, on various charges of making false public statements or disobeying police orders.

In response to the increasing repression, opposition parties intensified their cooperation, particularly the main opposition parties chadema, Civic United Front (cuf), and act-Wazalendo. In mid-July, chadema and act-Wazalendo technical committees agreed on fielding joint candidates in the 12 August by-elections. Remarkably, the parties’ leaders, Mbowe and Kabwe, who initiated the cooperation, had been rivals for many years. On 9 December, nine opposition parties issued a joint statement condemning proposed amendments to the 1992 Political Parties Act that had been tabled in parliament on 16 November for the first reading. One day later, ten opposition parties filed a case at the high court against the intended amendments bill. The heavily criticised bill was understood to further restrict the freedom of political parties and put them under government control. Clauses of the bill gave the registrar of political parties, a presidential appointee, the power to deregister political parties for minor administrative offences and to interfere in the internal affairs of political parties, including the right to suspend individual party members from conducting political activities. Contrary to the existing law, the proposed amendments sought to give the registrar immunity from litigation for decisions taken under the Act. Political parties were to be prohibited from acting as “a group of people that influences public opinion or Government action in the interest of a particular cause”. The amendments were heavily criticised inside and outside the country as being a step to bring political parties under tight government control and to virtually reintroduce a kind of one-party-system, but they had not been passed by parliament by year’s end.

In mid-December, leaders and senior members of six opposition parties held a two-day meeting in Zanzibar. In their Zanzibar Declaration the six parties decried a “backsliding of democracy” in Tanzania and an “institutionalization of an authoritarian rule”. They invited all citizens and groups to join their envisaged “grand coalition” and announced that they would “reclaim democracy” in 2019 and hold public rallies despite the existing ban, which they called unconstitutional.

chadema published its revised version of the 1993 party policy on 25 September. Based on a centre-right political ideology, the policy promoted a liberal democracy and a socially oriented market economy. The policy elaborated on the party’s aims and the expected benefits for the people in 12 policy areas, such as the constitution, social market economy, education and science, health, agriculture, environment, and foreign relations.

Civil society organisations vehemently criticised other newly introduced laws as repressive. Together with previously introduced laws, it was feared that these laws aimed at bringing political parties, csos, the media, and research activities under government control and at silencing dissenting voices. The Electronic and Postal Communications (Online Content) Regulations of 13 March obliged bloggers and owners of discussion forums and radio and television streaming services to register with the Tanzania Communications Regulatory Authority (tcra) and to pay hefty licencing and annual fees of over $ 900, which was unaffordable for most Tanzanians. As a result, many bloggers stopped their online activities. The law prohibited certain content from being published and punished violations with jail terms of not less than 12 months, or minimum fines of almost $ 2,200, or both. However, “prohibited content” was only vaguely defined in the legislation, raising fears that the provisions could be abused by state organs arbitrarily to restrict freedom of expression. Furthermore, the law forced owners of internet cafes to install surveillance cameras to record the activities of internet users inside their cafes and to register all internet users through their id cards. The government, however, explained that the new regulations aimed at increasing professionalism in the sector and at prohibiting unwanted content such as fake news, hate speech, and pornography.

Amendments to the contentious 2015 Statistics Act, passed in September, were widely criticised, even by the World Bank and the imf. The amendments imposed fines of at least $ 4,350, at least three years in jail, or both, on anyone who disseminated or otherwise communicated to the public any statistical information intended to invalidate, distort, or discredit official statistics. The government argued that the changes were needed to enforce standards and to prevent the publication of false information. On 2 October, the World Bank expressed its deep concern about the amendments, which it saw as being out of line with international standards. It considered suspending its $ 50 m support for the development of a national statistical system.

The Non-Governmental Organizations (Amendments) Regulations, 2018 of 29 October compelled organisations to submit to the ngo registrar reports about their financial resources, expenditures, and implemented projects. According to the government, the regulations aimed at increasing financial transparency and accountability in the ngo sector and at combating money laundering and corruption. Critics, however, feared that the government intended to increase its control over non-governmental activities.

Media freedom and freedom of expression were severely curtailed. In early January, the tcra fined five tv stations a combined $ 27,000 for the “offensive and unethical” broadcasting of allegedly seditious information. The stations had on 30 November the previous year aired a press statement issued by the Legal and Human Rights Centre (lhrc) about human rights violations during ward councillor by-elections in November of that year. In mid-June, the East African Court of Justice declared illegal a three-year ban that Tanzanian authorities had imposed on the local newspaper ‘Mseto’ in 2016. In their 2019 report, Reporters Without Borders characterised the situation of media freedom as “bad”. Tanzania fell another 25 places in the World Press Freedom Index to 118, a drop of 43 places since the president took over in 2015.

In July, the Tanzania Commission for Science and Technology (Costech) threatened to take legal action against the cso Twaweza under the controversial Statistics Act for allegedly conducting research without a permit. A Twaweza poll conducted in Tanzania Mainland in April and published in early July had revealed a continuous decrease in Magufuli’s popularity among citizens. Whereas in 2016 about 96% had approved of the president, the approval rate went down to 71% in June 2017 and to 55% in June 2018, a decline of 41% in two years. According to the survey, about two-thirds of respondents felt that the freedom of political parties had diminished and that the media were too intimidated to hold the government to account. Although Costech later revoked the accusations and cleared Twaweza of any wrongdoing, the authorities confiscated the passport of Twaweza’s director, Aidan Eyakuze, on accusations that he was not a Tanzanian citizen and barred him from travelling outside the country. In early December, the Open Government Partnership (ogp) Steering Committee discussed Eyakuze’s situation and requested the assistance of the Tanzanian government in addressing the situation.

On 7 November, the Africa programme coordinator of the Committee to Protect Journalists (cpj), Angela Quintal, and the ssa representative, Muthoki Mumo, were arrested and taken to a house in Dar es Salaam by people in plain clothes who claimed to be immigration officials. During the interrogation they were threatened and Mumo was slapped. Their passports, phones, and computers were confiscated and searched. The government accused both of having worked in Tanzania while visiting the country on tourist visas. According to cpj, the two were on a fact-finding and networking mission to better understand the situation of press freedom, and had held meetings with Tanzanian journalists. Upon immediate diplomatic interventions, they were released the day after their arrest.

A public demonstration that did not take place illustrated the government’s willingness violently to suppress any protest. A young Tanzanian self-declared democracy activist based in the United States had via social media called on Tanzanians to protest against the government on 26 April. The government called the demonstrations illegal and deployed heavily armed police forces in major towns. The Dodoma police chief was cited in the media as having threatened potential protesters to be beaten like stray dogs, and at least seven people were arrested in Arusha for allegedly mobilising for the demonstrations.

International civil society representatives also expressed concern with developments in Tanzania. On 10 May, 65 civil society organisations from all over the world published an open letter to President Magufuli over the “rapid decline in human rights”. Ahead of the unhrc session of mid-September, 30 civil society groups urged the council to address the crackdown on civic space and human rights in Tanzania. As in previous years, Freedom House assessed Tanzania’s political situation as “partly free”. The levels of political rights and civil liberties have, however, continuously worsened since 2015.

Human rights organisations reported several cases of police actions that caused the deaths of civilians. In late March, a young fruit vendor died a few hours after he was released from police custody. In mid-April, the brother of a chadema mp was stabbed to death by a police officer while in custody in a small town in northern Tanzania. He had been arrested for staying in a local bar beyond the permitted time. In April, police reported that it had suspended and taken to court eleven prison officers who had in February killed a villager. In February, the deputy home affairs minister confirmed that disciplinary measures had been taken against 100 police officers for different reasons, including for torturing suspects and taking the law into their own hands.

Several cases of abduction attracted public attention and concern, most prominently the abduction of the popular businessman, philanthropist, and former mp for ccm Mohammed “Mo” Dewji, who, according to ‘Forbes’, was Africa’s youngest us-dollar billionaire. He was kidnapped on 11 October outside a hotel in Dar es Salaam and found alive ten days later, dumped at a golf ground in the city centre. Despite investigations, the police failed to give any substantial explanation.

In their fight against ‘immorality’, authorities banned several songs and music clips for allegedly violating cultural norms or insulting the government. Some of the country’s most popular artists were affected, including Diamond Platnumz and Ney wa Mitengo. chadema as well as human rights groups saw the ban as an attempt to silence artists and deny them their freedom of expression, since some of the songs criticised the authorities and advocated change. Several popular musicians were arrested for sharing video clips or photos on social media that the authorities described as indecent. Criminal charges under the new Electronic and Postal Communications Act were prepared against the artists. In late December the music regulatory council Basata banned Diamond and another musician, Rayvanny, from performing inside and outside Tanzania for disrespecting the council’s directives.

On 19 September, the health ministry issued a ban on the broadcasting of family planning advertisements, saying that it intended to revise the contents of all ongoing radio and tv spots on family planning. The ban came shortly after Magufuli had at a public rally advised young couples to stop family planning since the country needed more people. He accused people who used contraceptives of being too lazy to work hard enough to feed their children. Tanzania had an estimated population of 59 m, and, at 3.1%, one of the world’s highest annual population growth rates.

On 31 October, Dar es Salaam regional commissioner Paul Makonda announced the establishment of a committee to eliminate homosexuality – and to set an example for the entire country. The committee was to hunt down people known to be lesbian, gay, bisexual, transgender, or intersex (lgbti), but also producers of pornographic pictures and videos, commercial sex workers, and cybercriminals. He called on Tanzanians to send him the names of lgbti people and claimed to have already received almost 19,000 messages. The announced hunt on lgbti people provoked an international outcry (see Foreign Affairs) and prompted the government through the foreign ministry to distance itself from Makonda’s remarks, terming them “personal opinion”. Although the foreign ministry in a statement on 4 November assured that it would respect all international human rights agreements, ten men were arrested on the same day in Zanzibar for allegedly conducting a same-sex wedding ceremony.

The 31-year-old gender rights activist Rebeca Gyumi was awarded the un Human Rights Prize on 18 December. Gyumi was the founder and executive director of Msichana Initiative, an ngo that aimed at empowering girls through education. In 2016, Gyumi had challenged the Tanzanian Marriage Act of 1971, which allowed 14-year-old girls to be married if their parents agreed. The high court had then ruled the Act unconstitutional and discriminatory towards girls.

Foreign Affairs

Magufuli continued to pursue a low-profile and business-oriented foreign policy. He again skipped several high-profile international meetings, at which Tanzania was represented instead by the prime minister or ministers. Magufuli attended neither the au summits nor the unga in September, which he said he skipped in order to save money. In March, prime minister Kassim Majaliwa signed the AfCFTA agreement on behalf of Tanzania. Magufuli participated, however, in the nineteenth eac summit in Kampala in late February.

Magufuli’s non-attendance at the Sustainable Blue Economy Conference in Nairobi in November was seen as resulting partly from strained relations with Kenya. In February, the presidents of Kenya and Tanzania had directed their trade ministries to resolve the persisting trade disputes. After several bilateral meetings, both countries agreed in early July to remove non-tariff trade barriers and to regularise the flow of goods and services (as foreseen within the eac). In May, a modern ‘one-stop border post’ was opened in Namanga. Traders, however, complained about continued harassment by border officials. The trade war entered a new round when Tanzania (as well as Uganda) imposed taxes on Kenyan-made sweets because of the alleged use of imported industrial sugar. Kenya then further escalated the conflict by imposing new tariffs on Tanzanian products like flour and by banning the importation of rice from Tanzania. Tanzania reciprocated by banning the import of carrots and by blocking 20 Kenyan companies from accessing the Tanzanian market. Authorities on both sides arrested fishermen from each other’s’ countries for allegedly illegally trespassing the border.

Despite some minor trade conflicts, relations with Uganda remained good. In July, Tanzania blocked the entry of 600 tonnes of sugar claiming that it had not been produced in Uganda. Contravening the zero rate prescribed by the eac Common Market Protocol, Tanzania also slapped a 25% import duty on sugar from Uganda. On 9 August, Ugandan president Yoweri Museveni visited Tanzania to strengthen bilateral relations and to discuss economic cooperation and infrastructure projects. The second Joint Permanent Commission ministerial meeting was held in Kampala from 21 to 23 August to discuss various projects, particularly the construction of the crude oil pipeline from Hoima (Uganda) to Tanga and a proposed gas pipeline from Tanzania to Uganda, but also cooperation in the telecommunication and transport sectors, joint power projects, and cross-border trade issues. Despite these agreements, Ugandan authorities complained about continuing Tanzanian restrictions on imports of Ugandan products.

In January, Tanzania and Rwanda agreed to construct a standard-gauge railway line linking Kigali to the Tanzanian rail network once this had reached Isaka in Shingyanga Region.

As a result of the deteriorating human rights situation and the shrinking democratic space, the traditionally good relations with Western donor institutions soured significantly. Generally, Western countries applauded the government’s drive to eliminate corruption, public theft, embezzlement, and indiscipline in the public sector and continued to support Tanzania’s development efforts with numerous aid projects. Slow and insufficient project implementation remained, however, an issue of discontent. In February, the embassies of the United States, the eu, Canada, Norway, and Switzerland expressed their concern about politically related violence and threats to democratic values. During the thirty-ninth session of the unhrc in September, the eu applauded Tanzania’s generosity in assisting refugees but expressed its concern about the human rights situation, specifically restrictions on the rights to freedoms of expression and assembly, and the arrests of and charges against human rights defenders, journalists, bloggers, and mps. Dar es Salaam regional commissioner Makonda’s plan to crack down on lgbt+ people was internationally condemned. On 2 November, un high commissioner for human rights Michelle Bachelet urged the government to fulfil its responsibilities to protect and not further endanger lgbt people and warned of a witch-hunt. Also on 2 November, the foreign minister of Ireland, a long-standing and important development partner to Tanzania, called the developments “shocking”. On 3 November, the eu recalled its ambassador, Roeland van de Geer, to Brussels to discuss the deterioration in the human rights and rule of law situation. According to eu high representative Federica Mogherini, the eu recalled its ambassador after Tanzanian authorities consistently increased pressure on him to enforce his departure. On 15 November, she announced that the eu and its member states had decided to conduct a comprehensive review of their policies towards Tanzania. On 13 December, the eu parliament issued a unanimous resolution deploring the human rights situation in Tanzania. Denmark, a major traditional aid donor, decided to withhold $ 10 m in aid because of human rights abuses and homophobic comments. The World Bank suspended a $ 300 m loan for the education sector over the government’s policies of banning pregnant girls from school, human rights and lgbti concerns, and restrictions on statistics. In contrast, Finland announced that it did not intend to cut aid spending to Tanzania, despite being concerned about the human rights situation.

The close cooperation with China ranged from investments in infrastructure to projects in the energy, education, and health sectors, as well as economic and military cooperation. On 6 February, Magufuli opened a Chinese-built training centre for the Tanzania People’s Defence Forces; on 27 November a state-of-the-art library at the University of Dar es Salaam, which also contained a Confucius Institute, was inaugurated. During the inauguration of this, the largest Chinese-built library on the African continent, Magufuli expressed his appreciation for Chinese aid, which came without (political) conditions. In September Prime Minister Majaliwa attended the focac summit in Beijing. Cases of criminal activities of some Chinese citizens in Tanzania (including smuggling, violation of immigration and labour laws, and corruption) had no impact on the good relations. However, during a Tanzania-China business forum held in early December, the Chinese ambassador appealed for improvements in the business climate and stated that unclear and overstated taxes, as well as problems with immigration procedures, were frustrating Chinese investors and business people. These challenges, together with the government’s inconsistent and unpredictable economic policies, had apparently caused several Chinese business people to shut down their activities or to reconsider their plans to invest in Tanzania.

India remained among the largest trading partners, accounting for 18% of Tanzania’s foreign trade, and was among the five top investors.

Relations with Israel intensified. Israel’s defence minister Avigdor Lieberman and justice minister Ayelet Shaked visited Tanzania in March and April respectively. On 9 May, foreign minister Augustine Mahiga commissioned Tanzania’s new embassy in Israel. Representatives of Tanzania also attended the controversial opening of the new us embassy in Jerusalem a few days later. The number of Israeli tourists to Tanzania had significantly increased within the last few years. Although Tanzania had re-established its relations with Israel in 1995, it had always been a strong supporter of the Palestinian cause. Thus, the opening of an embassy was criticised as a betrayal of Palestine, but it could be seen as an example of Magufuli’s shift from a political-ideological to a more business-oriented foreign policy.

Socioeconomic Developments

Achieving the status of a semi-industrialised lower-middle-income country by 2025 through public investment in infrastructure, industrialisation efforts (driven mainly by government), strict public finance discipline, and a strengthened internal resource base remained the government’s overarching socioeconomic objective. However, after years of consistently high growth rates and sound macroeconomic performance, socioeconomic developments were rather mixed during the year. Tanzania remained in the top group of the fastest-growing economies in Africa, with a slightly lower gdp growth rate of 6.6%, compared to 7.1% in the previous year. Mainly driving growth were the construction sector, communication services, manufacturing, and the tourism sector, with the latter accounting for over half of the country’s entire foreign currency earnings. Financial institutions expected economic growth to slow down further due to uncertainties about the government’s economic policy direction, the president’s erratic directives, continuous threats against private enterprises, and tendencies towards economic resource nationalism. The government imposed strict measures to reduce unnecessary expenditure and increase tax revenue, albeit often in a questionable and counterproductive manner, which led to reluctance in the business community, severe liquidity shortages, and the closure of businesses. Magufuli, however, claimed results of a successful industrialisation policy, with allegedly more than 3,000 newly established industries since he came to office. Tanzania dropped in the World Bank’s ‘Doing Business Report’ from 137 (2017) to 144 and remained characterised by a very low level of material wealth for the vast majority of the population. In the 2018 hdi statistical update, Tanzania was ranked 154/189 countries in the ‘low human development’ category.

Headline inflation was again successfully contained below the 5% target, at an average of 3.5% for the year. Wholesale prices for most major food crops (maize, rice, beans) decreased significantly, due to good harvests in the 2017/18 season. The exchange rate of the Tanzanian shilling (TSh) at year’s end was about TSh 2,290 to $ 1; over the year, the shilling depreciated by 2.2%. The structural trade deficit increased by almost 40%, to $ 3.8 bn in December from $ 2.7 bn in December of the previous year. Export earnings declined by 9.5% to about $ 4.4 bn, whereas the import bill increased by 8.3% to $ 8.2 bn. The services account improved slightly by 3.3% to a surplus of about $ 1.9 bn, largely resulting from tourism as the main foreign exchange source. These developments resulted in a strongly increased (by 70.8%) current account deficit of about $ 2.7 bn. Gross official reserves were reduced to $ 5 bn at year’s end, sufficient to cover 4.9 months of imports of goods and services. The external debt further increased by 9.7% to $ 21 bn; domestic debt also continued to increase (by 9.1%) and stood at $ 6.1 bn at year’s end.

The 2018/19 budget, submitted to parliament on 14 June by finance minister Philip Mpango, stressed the government’s focus on industrialisation and infrastructure development, tightly controlled public expenditure, and an intensified internal revenue collection. Total expenditure was budgeted at TSh 32,476 bn (about $ 14.2 bn), an increase of only 2.4% over the 2017/18 budget, whose ambitious goals had proved very difficult to implement. Of the total budget, 37% was earmarked for development expenditure. Given the under-execution of the previous budget by over 40%, it was obvious that the execution of development projects was strongly dependent on external sources. The revenue forecast, however, reflected the government’s endeavour to reduce its dependency on external funding. It was composed of tax and non-tax revenue (62.1%), slightly increased domestic and external non-concessional borrowing (27.4%), and a decreased external financing from development partners (8.2%, down from 13%). Only 1.7% was cautiously expected to come in the form of general budget support (3% in 2017/18), since donor countries seemed increasingly reluctant to provide such generous untied aid. The fiscal deficit was expected to amount to 3.2% of gdp. The fiscal deficit for budget year 2017/18 turned out at 1.3% of gdp as a result of tightly controlled recurrent expenditure and under-execution of the development budget. The issue of unresolved government arrears remained a serious problem, since it negatively affected many businesses, sharply reduced liquidity, and contributed to a higher level of non-performing loans.

In its efforts to better control and stabilise the banking sector, the Bank of Tanzania (BoT) in January revoked the licences of five community banks over undercapitalisation. Also, four commercial banks were put under BoT supervision. An imf Financial System Stability Assessment in November pointed to significant challenges for the stability of a nevertheless sound financial sector, due to the deteriorating quality of bank assets, falling credit growth, and liquidity pressures. The BoT also increased oversight over the foreign exchange market. Following the introduction of new regulations for bureau de change operators in mid-2017, aimed at tackling financial crimes in the sector, the BoT revoked the licences of almost half of the nearly 300 operators by mid-February. On 19 November, the BoT, supported by the army, raided and closed all forex bureaus in the tourist hub Arusha on money laundering and tax evasion allegations. Only a few days later, the BoT partially suspended five commercial banks from participating in the interbank foreign exchange market for allegedly breaching regulatory rules. The ban was, however, limited to a four-week period.

Several major infrastructure and energy projects were either completed or initiated. In April, Magufuli inaugurated the power plant Kinyerezi ii in Dar es Salaam (fuelled by natural gas), thereby adding 140 mw to 1,500 mw of already existing capacity. On 12 December, the government signed a contract with two Egyptian companies to construct the controversial Stiegler’s Gorge dam on the Rufiji River; the $ 3 bn hydroelectric power project (expected capacity of 2,115 mw on completion in 2022) was to be financed entirely by the government. The dam project continued to attract opposition from environmentalists and several mps, fearful that it would harm the natural environment and the livelihoods of people living along the river. unesco reiterated its grave concern about the dam, which was located in the Selous Game Reserve, a unesco World Heritage Site. No progress was achieved on the envisaged lng project in southern Tanzania. In April, the government invited bids for the development of a technical, legal, and commercial framework for the gas plant. However, continuing difficult discussions between the government and potential multinational investors indicated that the project was not among the government’s priorities.

Magufuli’s ambition to revive the ailing national airline Air Tanzania gained momentum with the arrival of three planes, among them a Boeing 787 Dreamliner and an Airbus A220-300, making Air Tanzania the first African airline to operate this aircraft type. The airline served a few domestic and regional destinations, with plans to operate direct flights to India and China in the near future to increase the number of tourists from Asia. In March, Magufuli launched the second construction phase of the standard-gauge railway line from Morogoro to Dodoma, built by the same Turkish-Portuguese consortium already undertaking the first phase from Dar es Salaam to Morogoro. Despite former statements that the government had sufficient funds to finance the railway project, the finance ministry in August arranged with the Standard Chartered Bank a concessional loan of $ 1.46 bn for the second section.

A cashew-nut crisis, starting in November, provided a good example of the president’s tendency of intervening in the private sector. The previous year, the produce had been Tanzania’s leading export crop, earning more than all other traditional agricultural exports combined. During the year, however, world market prices deteriorated significantly, and farmers in the main cashew-producing regions in southern Tanzania refused to sell at the prices offered by private traders at auction. Magufuli intervened, disbanding the cashew-nut board with responsibility for the auctions, firing the board’s leaders and two ministers, and arbitrarily setting a price of TSh 3,000 ($ 1.31) per kg, almost twice the price offered at auction. When a four-day ultimatum to traders elapsed on 12 November, Magufuli decreed the closure of all auctions and ordered the government to buy the entire cashew harvest of about 200,000 tonnes at a price of TSh 3,300 per kg through the army and the state-owned Tanzania Agriculture Development Bank. Magufuli also banned the export of unprocessed cashews and directed the army to take control of the state-owned processing plant. It soon became clear that Tanzania lacked the capacity to process all the nuts; the new agriculture minister announced at year’s end that the government was planning to sell a surplus of about 150,000 tonnes. The president’s decision to buy the cashews earned him much popular applause, but it was also met with valid scepticism about the longer-term effects of the interference into the market and the abrogation of established procedures. act-Wazalendo leader Zitto Kabwe demanded that the unforeseen expenditure of TSh 600 bn ($ 255 m) require parliamentary approval.