Moody s NR / S&P NR / Fitch NR 1 Economy: Agriculture 25%, Industry 28%, Services 47%

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Tanzania Summary Moody s NR / S&P NR / Fitch NR 1 Economy: Agriculture 25%, Industry 28%, Services 47% Tanzania is the one of the poorest yet fastest-growing economies in sub-saharan Africa.

1 Tanzania Summary Moody s NR / S&P NR / Fitch NR 1 Economy: Agriculture 25%, Industry 28%, Services 47% Tanzania is the one of the poorest yet fastest-growing economies in sub-saharan Africa. The service sector is the main driver of the economy; however, Tanzania will likely also become an important producer of energy and gas. Similar to other East African countries, it has a twin fiscal and current account deficit, but debt levels are manageable at less than 40% of GDP. Tanzania is also one of the most politically stable countries in the region despite poor social conditions. Its government is less market friendly than other governments in the region, and it is more cautious about opening its economy; however, it has remained committed to its International Monetary Fund program. The presidential and National Assembly elections of 2015 were among the most contested in recent history. However, the ruling party won, and no major economic policy changes are expected in the medium term. Economic Indicators F 2018F Population (Millions) GDP per Capita (USD) 969 1, ,040 1,118 Nominal GDP (USD Billions) Real GDP (%) Year-End CPI (%) Fiscal Balance (% of GDP) Interest (% of Revenues) FC Debt/Public Debt (%) Government Debt (% of GDP) Government Debt (% of Revenue) Current Account (% of GDP) FDI (% of GDP) External Debt (% of GDP) Foreign Reserves/External Debt (%) Foreign Reserves (Mo. of Imports) Foreign Reserves (% of GDP) As of December 2017 Forecasted or estimated results do not represent a promise or guarantee of future results and are subject to change. Source: Lazard, Haver Analytics, IMF 669

2 Lazard Emerging Markets Debt Rating History Tanzania does not have a rating history as the major agencies have not issued ratings for the country. We have included the spread history for the country s hard currency external debt against the JP Morgan Emerging Markets Bond Index Global Diversified. Bond Spreads Tanzania 2012 EMBIGD 2017 As of December 2017 Performance represents past performance. Past performance is not a reliable indicator of future results. Source: JP Morgan 670

3 Tanzania Strengths Rapid Investment-Led Growth Tanzania is one of the fastest-growing economies in East Africa, but remains the poorest. Tanzania s economy grew at an average of 6.5% in the decade , and growth tends to be independent of the global economic cycle given its limited exposure to the international financial system. For instance, growth increased during the financial crisis of Over the next five years, the IMF expects GDP growth to average 6.7% per year, 2 making Tanzania one of the region s most dynamic economies. Megaprojects including railways linking neighboring countries and the $10 billion Bagamoyo Port project are also boosting investment growth. The Bagamoyo Port is expected to start operations between and will be the largest in East Africa. 3 Proven Gas Reserves Tanzania continues to discover natural gas, with an estimated 57 trillion cubic feet 4 of recoverable reserves, which could make Tanzania a major energy producer in the East Africa region. 5 The country currently produces 35 billion cubic feet of natural gas annually, but production could increase more than fivefold over the next five years. 6 In 2015, Tanzania inaugurated a $1.2 billion gas pipeline financed by China 7 that will transport gas from one of the major natural gas fields in the southern region to Dar es Salaam, a regional economic center. The pipeline is expected reach full capacity by 2022 when gas-fired plants will be completed. 8 The pipeline should help to tackle the country s energy deficit as well as reduce the cost of electricity, increasing productivity. 9 Mining Tanzania is a major diamond producer and could become a leading producer of uranium and nickel. The company Mantra Tanzania Limited came close to completing a major uranium mine at a cost of approximately $1.0 billion. The site has 36,000 metric tons of uranium deposits, with potential to extract 14,000 metric tons of the radioactive element, which would make Tanzania among the top five uranium producers in the world. 10 The mine could generate an estimated US$250 million in annual revenues. However, depressed uranium prices and a change in local law providing the government with a higher share of natural resources exploitation has delayed the project. 11 Political Stability The ruling Chama Cha Mapinduzi party has been in power since Tanzania gained independence in Political stability is one of Tanzania s strengths, but the lack of leadership change may reflect a weak democracy. The last presidential elections took place in October 2015, and Chama Cha won the elections as expected. The election was more competitive than the previous one: in the 2005 election, the ruling party won with 80% of the votes; in 2010 with 61%; and in 2015 with 55%. However, even as they have experienced some success at the polls, the opposition has experienced difficulty remaining united. The next election is scheduled for

4 Lazard Emerging Markets Debt Weaknesses Current Account Deficit Tanzania s high current account deficit remains a major vulnerability, especially if donations or relationships with multilateral institutions deteriorate. Similar to other the East African countries, Tanzania has a high current account deficit as a result of structural problems, including low savings, poor economic competitiveness, and reliance on imports for consumer products, including oil and food. In addition, important infrastructure projects, largely financed with foreign direct investment, will continue to put pressure on the current account deficit. The IMF expects an average current account deficit of 6.6% of GDP in the period Electricity Shortages Infrastructure is another major weakness, and electricity supply is the primary problem across the country. Tanzania s chronic energy crisis has imposed major costs on the economy as it affects other sectors, such as manufacturing. The public energy company TANESCO, which runs the energy sector, is rife with inefficiencies. It tends to buy expensive electricity to prevent major crises, resulting in large losses and frequent power outages. In June 2016, the government announced that it plans to invest $1.2 billion over the next 11 years to improve the operational capacity of TANESCO, 13 but power shortages continue to be a major hindrance for business due to decades of underinvestment

Tanzania Country Background Size Capital Population 947,300 KM 2 (32nd) Dodoma 53.9 Million Religion Christian 61.4%, Muslim 35.2%, folk religion 1.8%, Other 1.6% Median Age 17.

9% Independence 26 April 1964 Political System Government Leadership Presidential Election 2020 Legislative Branch Presidential Republic President John Magufuli Unicameral National Assembly

5 Tanzania Country Background Size Capital Population 947,300 KM 2 (32nd) Dodoma 53.9 Million Religion Christian 61.4%, Muslim 35.2%, folk religion 1.8%, Other 1.6% Median Age 17.7 Years Literacy Rate 77.9% Independence 26 April 1964 Political System Government Leadership Presidential Election 2020 Legislative Branch Presidential Republic President John Magufuli Unicameral National Assembly Economy Agriculture 24.5%, Industry 27.6%, Services 47.3% Labor Force Agriculture 66.9%, Industry 6.4%, Services 26.6% Merchandise Exports Export Partners Currency As of November 2017 Source: CIA Gold, Coffee, Cashew Nuts, Manufactures, Cotton Switzerland 15.1%, India 13.8%, South Africa 12.4%, China 7%, Kenya 6.2%, Democratic Republic of the Congo 5.7%, Belgium 5.6% Shillings (TZS) 673

6 Lazard Emerging Markets Debt Country Timeline 1964 Sultanate of Zanzibar overthrown by Afro-Shirazi Party in a violent, left-wing revolution; Tanganyika and Zanzibar merge to become Tanzania, with Nyerere as president and the head of the Zanzibar government and leader of the Afro-Shirazi Party, Abeid Amani Karume, as vice-president The Tanganyika African National Union and Zanzibar s Afro-Shirazi Party merge to become the Party of the Revolution, which is proclaimed as the only legal party Tanzanian forces invade Uganda, occupying the capital, Kampala, and help to oust President Idi Amin Nyerere retires and is replaced by the president of Zanzibar, Ali Mwinyi Constitution amended to allow multi-party politics Benjamin Mkapa chosen as president in Tanzania s first multi-party election Presidents of Tanzania, Uganda and Kenya launch regional parliament and court of justice in Arusha to legislate on matters of common interest such as trade and immigration The African Development Bank announces the cancellation of more than $640m of debt owed by Tanzania, saying it was impressed with Tanzania's economic record and the level of accountability of public finance President dissolves his cabinet following a corruption scandal which forced the premier and two ministers to resign Tanzania joins its neighbours in forming a new East African Common Market, intended to integrate the region's economy The Statoil and Exxon Mobil oil exploration companies make the biggest offshore discovery yet of gas reserves off the coast of Tanzania. The Zafarani field is close to the region off the coast of Mozambique where even larger deposits of gas are being developed by Anadarko and ENI Works Minister John Magufuli of the governing Chama Cha Mapinduzi wins presidential election by large margin over former prime minister Edward Lomassa Tanzania and Uganda agree to build East Africa s first major oil pipeline. Source: BBC 674

7 Tanzania Notes 1 As of December IMF WEO October 2017 Data 3 accessed 12 December accessed 26 November Tanzania, U.S. Energy Information Administration, accessed on 14 December 2013, countries/country-data.cfm?fips=tz. 6 Ng wanakilala, Fumbuka, Tanzania outlines new oil and gas production terms, Reuters, 4 November 2013, accessed on 14 December 2013, 5N0IP ; Tanzania, U.S. Energy Information Administration, accessed on 26 October 2015, accessed 26 November accessed 12 December Ng Wanakilala, Fumbuka, Tanzania gas pipeline built, but not ready to start, Reuters, 31 March 2015, accessed on 26 October 2015, 0WX12I accessed 26 November Russian state corporation suspends $1.2 billion uranium project in Tanzania accessed 12 December IMF WEO Outlook Data, October accessed 26 November accessed 12 December

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Oman. Summary. Economic Indicators

Oman. Summary. Economic Indicators Oman Summary Moody s Baa2 / S&P BB / Fitch BBB Economy: Agriculture 2%, Industry 47%, Services 54% Oman is a founding member of the Gulf Cooperation Council (GCC) and an upper-middleclass country as measured