Haya we... Chama chetu cha Mapinduzi (CCM) chabomoa nchi...
FACTBOX-Key political risks to watch in Tanzania
By Fumbuka Ng'wanakilala
DAR ES SALAAM, April 1 (Reuters) - Infighting over its future leadership risks weakening Tanzania's ruling Chama Cha Mapinduzi (CCM) party as a resurgent opposition bites at its heels.
The next general election may be four years away, but senior ruling party officials are already jostling to succeed Jakaya Kikwete as president.
The succession race is seen to be at the heart of CCM's internal intrigues since the party's presidential candidate has traditionally been virtually assured of the Tanzanian leadership, despite the emergence of Chadema as the main opposition party.
Kikwete, who must step down in 2015, has pledged to reform the ruling party as it struggles with deep divisions.
The 60-year-old moderate Muslim, re-elected in an October vote marred by a record low turnout and accusations of rigging, faces an ultimatum from opposition leaders to fix the economy, tackle large-scale bribery and deliver a new constitution or risk mass protests.
The president has dismissed the opposition's demands and accuses it of trying to destabilise the country.
Here are some risk factors to watch out for:
ANTI-GOVERNMENT PROTESTS
Thousands of protesters took to the streets on Feb. 24 when Chadema held a peaceful demonstration in the second-largest city, Mwanza.
Opposition leaders have threatened to organise further demonstrations modelled on protests in North Africa.
Police shot dead at least two protesters in the northern town of Arusha on Jan. 5. Kikwete's main rival in the elections, Willibrod Slaa, and several Chadema lawmakers were detained by police and charged with unlawful assembly in the incident. Chadema leaders spoke of a deliberate crackdown.
A full-blown Egypt-style uprising is unlikely in Tanzania, but opposition demands for economic, social and political reform are beginning to resonate with the public.
What to watch:
-- Political unrest. The opposition wants to organise nationwide demonstrations to "liberate" Tanzanians from poverty and corruption. There is risk of violence if the police move to block opposition protests in future.
-- Economic hardship. Rising food and fuel prices are eroding support for Kikwete's government and the ruling Chama Cha Mapinduzi (CCM) party. This could trigger protests.
-- Ruling party rifts. Several CCM leaders have publicly clashed over the future direction of the party, with a section of leaders and supporters demanding the expulsion of party officials tainted with corruption allegations.
ANTI-GRAFT FIGHT
Kikwete promised to clean up corruption in politics when he first won office in 2005. But his first term was overshadowed by high-level scandals, forcing him to dissolve his entire cabinet in 2008 over corruption allegations in an energy contract.
While Tanzania's stability in a sometimes turbulent region has appealed to donors, the country has seen its ranking in Transparency International's Corruption Perceptions Index, a measure of perceived public sector corruption, plunge 32 places over the past two years.
Donors slashed funding pledges for Tanzania's budget by nearly $250 million due to graft and the slow pace of reforms and could freeze more funds for the upcoming 2011/12 budget.
What to watch:
-- Dowans scandal. International arbitrators have ordered state-run Tanzania Electric Supply Company (TANESCO) to pay a private firm, Dowans Holdings SA, $65.8 million, plus interest, for breach of a power generation contract.
The government initially agreed to pay without seeking legal recourse, but has been forced to backtrack and try to find ways out of paying, after criticism from opposition leaders, the public and lawmakers from the ruling CCM party.
Allegations of large-scale corruption in the same contract led to the resignations of then prime minister Edward Lowassa and two other senior ministers in February 2008.
In an unprecedented move, some senior cabinet ministers in Kikwete's government have publicly clashed over the contract.
-- Waning anti-graft war. Leaked U.S. cables from its embassy in Dar es Salaam showed Tanzania's anti-corruption chief feared for his life and believed lack of political will was undermining the fight against graft in the country.
According to a July 2007 cable, Edward Hoseah, director general of the Prevention and Combating of Corruption Bureau (PCCB), noted "President Kikwete's reluctance to implicate former President Benjamin Mkapa or members of Mkapa's inner circle in corruption scandals".
Hoseah, whose PCCB has been investigating the sale of an air traffic control system by BAE Systems to Tanzania, described the sale as a "dirty" deal but has failed to prosecute anyone yet.
The PCCB has been widely criticised for failing to tackle major corruption, focusing instead on petty graft cases.
LABOUR, STUDENT UNREST
There have been a series of boycotts, protests and demonstrations at public and private universities across the country over delayed and insufficient student loans.
Kikwete has accused his political rivals of planning to orchestrate widespread student boycotts and street demonstrations in an attempt to destabilise his government.
What to watch:
-- Growing student protests. Analysts warn unrest over loans and tuition fees could spread to more universities in Tanzania.
Authorities have used riot police and teargas to disperse students as they chanted slogans against the government.
-- Union demonstrations. Trade union leaders have planned nationwide demonstrations to protest a rise in power tariffs by 18.5 percent at the start of the year. No date has been set.
Lack of electricity is widespread and regular power outages slow down business. The government has defended the tariff rise, saying it was caused by underlying financial and economic factors.
But union leaders blame the government for failing to improve pay and conditions for workers amid rising living costs.
MINING REFORM
Tanzania, Africa's fourth biggest gold producer, earned $4.7 billion from mining in the past five years and is seeking to boost income further through state ownership of future projects. Parliament passed a mining law in April increasing royalties paid on minerals like gold to 4 percent from 3 percent.
African Barrick Gold has four gold mines in Tanzania while Australia's third largest gold miner, Resolute Mining and South Africa's Anglogold Ashanti also have operations in the country. London-listed African Eagle is raising funds for a nickel project.
What to watch:
-- Investor reaction. Mining firms have rejected the law, saying it would erode investor confidence.
-- The government is in talks with mining companies on plans to abolish tax exemptions on fuel imports.
-- Further offshore discoveries of oil and natural gas.
SLUGGISH ECONOMY
The International Monetary Fund has cut its 2011 growth forecast for Tanzania to 6 percent, saying frequent power outages would hurt output while food and fuel prices could push inflation higher.
Tanzania's economy was initially expected to grow by 7.2 percent this year from an estimated 7.0 last year due to a strong recovery after the global financial crisis. But dry weather this year has affected power generation and food production, pushing up prices and slowing economic growth.
What to watch:
-- Rising inflation. Tanzania's year-on-year inflation rate rose for a fourth consecutive month in February to 7.5 percent on the back of higher food and fuel prices, staying in step with trends at east African neighbours Kenya and Uganda.
This could heap pressure on policy makers to tighten monetary policy.
-- Energy crisis. The state-run utility imposed Christmas power cuts after a shortage of natural gas to turbines led to a power deficit. Prolonged power rationing risks denting growth further.
-- Debt sales. Tanzania plans to issue a debut $500 million Eurobond when it gets a sovereign rating. Some analysts say Tanzania may have to liberalise its capital account to get a rating, a move that could boost investor interest in Tanzania.
-- Currency woes. The central bank has been intervening to defend a weakening shilling and stave off potentially destabilising import-led inflation.
