Coronavirus: South African logistics shines amid lockdown
South African investors in real estate for logistics have so far been largely shielded from non-payment of rent caused by lockdown.
By David Whitehouse
Projections by the International Monetary Fund (IMF) for a sharp slowdown in Tanzanian growth due to the coronavirus pandemic, underestimate the economy’s resilience.
The IMF predicts that growth is set to slow from 6.3% in 2019 to 2% in 2020. But the largest contributors to growth are the state’s construction, infrastructure and social services projects, says Imani Muhingo, head of research and analytics at Orbit Securities in Dar es Salaam. “There is no indication that the government will slow down in its projects.”
READ MORE: Tanzania: New rails, old problems
According to the Economist Intelligence Unit (EIU) in London, economic growth will slow to 2.7% this year. But, the EIU says, prospects to 2024 are supported by a growing services sector and planned public investments in infrastructure.
Lower oil will help cushion the slowdown.
Improved fiscal collection is also a plus.
Tanzania is one of the few countries in east Africa with fiscal space to help support growth, Citi analyst David Cowan writes in a research note on 29 April.
With elections due in October, the government could easily seek to boost spending, he argues.
Some accuse President John Magufuli of underestimating the dangers of the pandemic.
“Instead of a lockdown and movement restriction as in neighbouring East African countries, Magufuli simply asked Tanzanians to pray away the virus and left places of worship open,” says David Himbara, professor of international development at Centennial College in Toronto.
READ MORE: Coronavirus: despotism disguised by the pandemic
“Tanzania is sleepwalking into COVID disaster.”
But there’s no obvious sign for now that the result of the elections is in doubt.
The country’s status as the only major exporter of solid minerals in east Africa, notably gold, will help it to weather the storm.
Bottom line: State-driven infrastructure projects may be a workable model for sustaining Tanzania’s growth once the worst of the pandemic is over.
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