Zanzibar’s stability key to preserving Tanzanian Union

Zanzibar’s stability key to preserving Tanzanian Union

April 26th, 2014 marked 50 years of the Union between the Republic of Tanganyika and the People’s Republic of Zanzibar. With Zanzibar’s demands for independence growing stronger, there was real concern across the nation about the potential for unrest. However, no violence was recorded.

A Record number of Tanzanians congregated in Dar Es Salaam’s Freedom Stadium to celebrate the semi-centenary. Whilst fears of secessionist agitation were unfulfilled, the concern is worthy of further examination.

Between 2011 and 2012, Tanzania attracted $1.1 billion in foreign direct investment (FDI), overtaking Kenya in FDI for the first time. With investors eyeing up Tanzanian opportunities, how much concern should be given to fears of political unrest in the United Republic of Tanzania?

The Tanzanian economy grew on average 7% during 2012 and 2013. The industries to invest in are many and range from tourism, to construction, agriculture, manufacturing and natural resources, where substantial deposits of natural gas have recently been discovered.

There are signs of the emergence of a healthy economy, (inflation has decreased from 20% at the end of 2011 to 6% in March 2014) which has drawn the attention of countries such as Saudi Arabia, South Korea and the Netherlands in recent months. As such, investor opportunity and interest is on the rise, but how far can political unrest threaten this trend?

The semi-autonomous Zanzibar Archipelago has called for full autonomy from mainland Tanzania in recent years, the result of which has been the development of the Islamic group named ‘Uamsho’. Uamsho has been responsible for attacks on the island since 2011 which have targeted several Christian priests working and living on the islands, as well as two British teenagers in August 2013.

Alongside these attacks, Uamsho has also been linked to riots and illegal protests, hence the concern for the semi-centenary celebrations. It is hard to determine the extent of Uamsho membership or the prevalence of its support. Nonetheless, the release on bail earlier this year of Uamsho’s leader, Sheikh Farid Hadi Ahmed, who was arrested in October 2012 has added fuel to concerns of a new wave of Uamsho-instigated violence.

However, on visiting Zanzibar it becomes apparent that widespread unrest on the island is less radical in nature than reports of Uamsho activity may depict. While few of the benefits of the growing tourist industry reach the pockets of locals, reports of scorn towards western tourists have not been strong enough to dent the industry’s expansion. Few tourists report to feel threatened and the beaches remain filled with Western tourists and local touts.

What is more evident is the low standard of living across the islands. With a third of the population living below the poverty line, a rapidly increasing population and youth unemployment at 85% (compared to 9% on the mainland), the average islander’s quality of life is much lower than that of the mainlanders.

The primary grievance of the average Zanzibar is not radical in nature. It is directed towards the ever increasing numbers of mainland Tanzanians relocating to the islands and taking valuable work away from locals.

What does this mean for investors? The lack of violence at the semi-centenary celebrations should be comforting. With limited reports of Uamsho activity recorded since 2013, as well as few indications of an expanding Uamsho capacity, there is little reason to worry in the short to medium term.

However, with parliamentary and presidential elections due to take place in 2015 and a new constitution to be unveiled by the end of 2014, investors should keep an eye on the relationship between the mainland and its archipelago. It is vital that Zanzibar is not ignored if Tanzania hopes to keep radicalism at bay and support a healthy Union for another fifty years.

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