More protests in Dar es Salaam after chaotic Tanzanian election

Tanzania is experiencing significant political unrest following a general election marred by the exclusion of key opposition candidates, leading to widespread protests, police intervention with tear gas and gunshots, and reported fatalities. This instability has resulted in operational disruptions, including intermittent internet access, cancellations of international flights to Dar es Salaam, and government-mandated work-from-home orders. The situation signals elevated political risk and potential for continued unrest, impacting business continuity and investor confidence in the region.

Analysis

Tanzania is experiencing significant political instability following a general election marred by the exclusion of President Samia Suluhu Hassan’s main challengers and allegations of increased government repression. Widespread protests in Dar es Salaam and other cities have led to police firing tear gas and gunshots, with reports of at least 5-10 fatalities, though these remain unverified by Reuters. This unrest presents a critical test for Hassan's administration, which initially garnered praise for easing repression.

The escalating situation has caused immediate operational disruptions, including intermittent internet access, cancellation of international flights to Dar es Salaam, Arusha, and Kilimanjaro airports, and government-mandated work-from-home orders for civil servants. These measures highlight the severe impact on business continuity and daily life, signaling a heightened risk environment. The British government and US Embassy have issued travel warnings, advising citizens to shelter in place.

The "extremely negative" sentiment and high market impact score (0.75) reflect concerns over governance and the rule of law in this emerging market. The government's actions, including the disqualification of opposition parties CHADEMA and ACT-Wazalendo, suggest a regression from earlier reforms, potentially eroding investor confidence and increasing the perceived political risk premium for assets within Tanzania.

Key Decisions for Investors

• Investors should closely monitor the evolving political stability and security situation in Tanzania, particularly regarding potential for prolonged unrest and government response.
• Assess the direct and indirect impacts on local businesses, supply chains, and infrastructure projects, given the operational disruptions like flight cancellations and internet outages.
• Consider re-evaluating exposure to Tanzanian assets, especially those sensitive to political risk, travel disruptions, or internet restrictions, factoring in the elevated governance risk when making future investment decisions.