First, the good news: In economic growth terms, Tanzania ended 2014 on a high note. Its gross domestic product (GDP) expanded by 32 per cent following the rebasing exercise that incorporated new economic sectors including the newly-discovered large amounts of natural gas. Rebasing increased Tanzania's GDP from USD$30 billion to USD$41 billion.
This expansion narrows the gap between Tanzania's GDP and East Africa's biggest economy, Kenya, which stands at USD$55 billion. Uganda takes third position GDP of USD$21 billion, distantly followed by Rwanda and Burundi with GDP of USD$7.5 billion and USD$2.7 billion, respectively.
Tanzania is the richest in a unique and most elusive commodity -- national cohesion -- which its neighbours and indeed the entire Sub-Saharan Africa (SSA) has in short supply. Tanzania has been spared internal strife that blighted each of its neighbors since independence more than five decades ago. How has Tanzania, home to more than 100 ethnic groups, succeeded in building a national identity in a region marred by ethnic rivalry and associated instability?
Tanzania's success is in large part a gift from its founding father, Mwalimu Julius Kambarage Nyerere, whose singular mission was to unite his compatriots and Sub-Saharan Africans. What Nyerere failed to achieve in economics, he more than made up in politics. As he conceded towards the end of in his presidency, Nyerere's self-reliance economic experiment did not create prosperity. But he built a united nation in which ethnicity became largely divorced from politics.
The current head of state, Jakaya Kikwete, is Tanzania's fourth democratically-elected president, and leader of Chama Cha Mapinduzi (CCM), which, under Nyerere abolished multi-party politics. Tanzania returned to multi-party democracy as part of wide-ranging political and economic reforms in 1992. The number of political parties grew, the most prominent being CHADEMA, which has significant representation in Parliament since 2010.
Now, the bad news. Tanzania is troubled by self-inflicted pain. Much of its energy and transport infrastructure is in shambles due to under-investment and mismanagement. Of its 50 million people, only 11 percent are reported to be connected to the power grid whose total installed capacity is a mere 1,438 megawatts. Tanzania's transmission and distribution networks suffer the same fate - dilapidated and largely dysfunctional. The 400 megawatts gas-fired power plant under construction since 2013 by U.S. based energy companies Symbion Power and General Electric should soon make a difference.
Dar es Salaam seaport, which also serves landlocked Rwanda, Burundi, Uganda, Malawi, Democratic Republic of Congo, and Zambia is in equally dire straits, as is the railway network. A 2012 World Bank Report "Tanzania's Infrastructure: A Continental Perspective" concluded that Tanzania would need to invest USD2.4 billion annually for 10 years to have a functional infrastructure, which would absorb slightly over 20 percent of the country's GDP.
Meanwhile, considerable financial resources earmarked for improving economic infrastructure "disappear" through corruption. In December 2014 Tanzania's attorney general resigned after parliament found that government officials, including him and the energy minister, fraudulently authorized transfer of USD$122 million of public funds to a private company. Prior to this resignation, a group of 12 donors including Japan, the U.K., the World Bank and the African Development Bank withheld USD$490 million in budget support citing corruption. In 2013, energy minister was forced to step down after a report established abuse of taxpayers' money in the previous year. This resignation by energy minister was a repeat of 2008 when the then prime minister stepped down due to another energy corruption episode.
Tanzania can rescue itself by building stronger institutions that hold leaders accountable. Multi-party politics and political reforms of the past two decades have not gone far enough in curtailing the powers of the ruling party, CCM, which has governed since independence. Its poor economic performance has no consequences. CCM still retains power no matter what. Put in another way, Tanzania is ripe for constitutional reforms that can deepen democratic governance.
Tanzania seemed ready to embark on such an exercise in 2011 when parliament passed the Constitutional Review Act, followed by the appointment of the Constitutional Review Commission a year later. Sadly, as 2015 unfolds there is no new constitution in sight. Constitution-making in Tanzania has stalled.
But the Nyerere spirit lives on in Tanzania. While the drafting of a new constitution has divided national elite, political stability ensures there is limited societal breakdown and violence. The process of deepening and widening democratic governance may be delayed, but it will be restarted, thanks to Tanzania's national cohesion and de-tribalized politics that have historically set the country apart from much of Sub-Saharan Africa.