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Fri Aug 10, 2012 10:17am GMT
By Fumbuka Ng'wanakilala
DAR ES SALAAM Aug 10 (Reuters) - Tanzania faces political uncertainty in the months ahead after corruption allegations were levelled at some members of parliament and workers staged street protests against rising living costs.
Following are the political risks to watch in the country.
GRAFT ALLEGATIONS
Parliament's energy and minerals committee was disbanded last month following allegations of corruption against some of its members. The committee is charged with overseeing the mining, oil and gas sectors.
Aid donors and opposition leaders have questioned the government's seriousness in its fight against corruption, and investors have long complained of graft as one of the main reasons for the high cost of doing business in Tanzania.
LABOUR UNREST
Teachers went on strike last month to push for better pay, joining doctors in demanding higher salaries as rising costs of living threaten to stoke social tensions.
Discontent has increased among low-paid public workers, causing labour unrest in east Africa's second-biggest economy, and there are concerns these protests could widen further.
Tanzania's year-on-year inflation rate fell to 17.4 percent in June from 18.2 percent a month earlier, but consumer prices remain high.
TROUBLED FRONTIER
East Africa is fast becoming an energy hub following recent major discoveries of oil and gas in the region.
Malawi, which hopes to join the energy boom, last year awarded exploration blocks to UK-based Surestream Petroleum on the disputed Lake Malawi.
Malawi says it owns all of the lake, but Tanzania says it owns half of it.
Tanzania reacted angrily to the awarding of blocks and asked Malawi to halt exploration work.
Officials in Malawi rejected calls for suspending exploration licences and Tanzanian politicians have stepped up their rhetoric and warned any significant oil or gas finds could escalate the border issue.
CONTRACT REVIEWS
Tanzanian government officials have announced plans to review gas and mining contracts, worrying foreign investors who want reassurances that the government will maintain a stable legal environment.
Tanzania is Africa's fourth-largest gold producer and has made vast gas discoveries in its offshore blocks.
The government is under pressure from politicians and the public to increase revenues from mining and energy sectors, and is already drafting new legislation to regulate its gas industry. Will the government's decision to move the goal posts discourage future investments?
There are also concerns over how officials will manage gas revenues from the new gas discoveries.
(Editing by James Macharia and Pravin Char)
By Fumbuka Ng'wanakilala
DAR ES SALAAM Aug 10 (Reuters) - Tanzania faces political uncertainty in the months ahead after corruption allegations were levelled at some members of parliament and workers staged street protests against rising living costs.
Following are the political risks to watch in the country.
GRAFT ALLEGATIONS
Parliament's energy and minerals committee was disbanded last month following allegations of corruption against some of its members. The committee is charged with overseeing the mining, oil and gas sectors.
Aid donors and opposition leaders have questioned the government's seriousness in its fight against corruption, and investors have long complained of graft as one of the main reasons for the high cost of doing business in Tanzania.
LABOUR UNREST
Teachers went on strike last month to push for better pay, joining doctors in demanding higher salaries as rising costs of living threaten to stoke social tensions.
Discontent has increased among low-paid public workers, causing labour unrest in east Africa's second-biggest economy, and there are concerns these protests could widen further.
Tanzania's year-on-year inflation rate fell to 17.4 percent in June from 18.2 percent a month earlier, but consumer prices remain high.
TROUBLED FRONTIER
East Africa is fast becoming an energy hub following recent major discoveries of oil and gas in the region.
Malawi, which hopes to join the energy boom, last year awarded exploration blocks to UK-based Surestream Petroleum on the disputed Lake Malawi.
Malawi says it owns all of the lake, but Tanzania says it owns half of it.
Tanzania reacted angrily to the awarding of blocks and asked Malawi to halt exploration work.
Officials in Malawi rejected calls for suspending exploration licences and Tanzanian politicians have stepped up their rhetoric and warned any significant oil or gas finds could escalate the border issue.
CONTRACT REVIEWS
Tanzanian government officials have announced plans to review gas and mining contracts, worrying foreign investors who want reassurances that the government will maintain a stable legal environment.
Tanzania is Africa's fourth-largest gold producer and has made vast gas discoveries in its offshore blocks.
The government is under pressure from politicians and the public to increase revenues from mining and energy sectors, and is already drafting new legislation to regulate its gas industry. Will the government's decision to move the goal posts discourage future investments?
There are also concerns over how officials will manage gas revenues from the new gas discoveries.
(Editing by James Macharia and Pravin Char)
