Political Turmoil in Tanzania: A Growing Threat to Economic Stability

The arrest of opposition presidential candidate Tundu Lissu and the disqualification of his party Chadema from the 2025 elections have plunged Tanzania into a deepening political crisis, raising red flags for investors. With the ruling Chama Cha Mapinduzi (CCM) party’s authoritarian tendencies intensifying, the country’s economic trajectory faces mounting risks—from stalled reforms to potential sanctions—that could derail its growth story.

The Political Tightening

Tanzania’s political landscape has grown increasingly repressive under President Samia Suluhu Hassan, despite her initial 2021 pledge to revive democracy. Lissu’s April 2025 arrest on treason charges—carrying a potential death sentence—marked a stark escalation. The government’s subsequent banning of Chadema for refusing to sign an election code of ethics without reforms has further marginalized opposition voices. This follows a pattern of repression: over eight government critics were abducted or killed in 2024, while Chadema claims thousands of its candidates were disqualified from local elections.

The CCM’s grip on power has also stifled electoral integrity. In 2024 local elections, the party secured 99% of seats, a figure opposition parties labeled implausible. Courts have yet to rule on lawsuits alleging fraud, leaving the 2025 elections’ credibility in doubt.

Economic Risks Escalate

The political crackdown threatens Tanzania’s economic stability. Foreign investors, already wary of corruption and regulatory uncertainty, now face heightened risks of capital flight.

Tanzania’s GDP growth has averaged just 4.5% since 2015—far below pre-pandemic highs—and lags behind Kenya’s 5.7% and Uganda’s 6.3%. While sectors like mining and agriculture remain vital, political instability could deter much-needed foreign direct investment (FDI). In 2023, FDI inflows fell to $1.2 billion, down from $1.8 billion in 2019, as investors grew cautious of regulatory unpredictability.

Sanctions and Diplomatic Fallout

Western governments and human rights groups are watching closely. The U.S. and EU, which historically tied aid to democratic reforms, may reimpose sanctions or reduce funding if repression continues. The World Bank had already paused a $400 million infrastructure project in 2022 due to governance concerns, a stark warning of Tanzania’s diminished appeal to multilateral lenders.

Domestically, unrest looms. Social media shutdowns, targeted arrests, and violence against opposition supporters risk triggering protests that could disrupt key industries like tourism—a sector contributing 17% to GDP in 2023.

The CCM’s Internal Struggles

The ruling party’s factional divides complicate its path forward. Hardliners, aligned with former president John Magufuli’s authoritarian legacy, push for tactics to maintain dominance, while reformists seek to legitimize CCM through credible elections. This infighting undermines Samia’s ability to enact anti-corruption measures or liberalize sectors like banking, stifling economic modernization.

Conclusion: A Crossroads for Tanzania’s Economy

Tanzania stands at a critical juncture. Without political reforms, its economy risks prolonged stagnation. Key data underscores the stakes:

• Investor Confidence: FDI inflows have dropped 33% since 2019, with mining and tourism—critical sectors—already facing labor disputes and declining revenue.
• Debt Burden: Public debt has surged to 65% of GDP, limiting fiscal flexibility.
• Global Perception: In the 2023 Ibrahim Index of African Governance, Tanzania ranked 37th out of 54 countries for human rights and democracy—a decline from 2017’s 28th place.

The arrest of Lissu and exclusion of Chadema signal a regression toward authoritarianism, not just a temporary setback. For investors, the calculus is clear: Tanzania’s growth potential hinges on political stability. Until credible reforms and free elections are prioritized, the risks of sanctions, capital flight, and domestic unrest will overshadow opportunities in agriculture, minerals, and tourism. The road to recovery remains fraught, and without change, Tanzania’s economic future may remain mired in the shadows of its political past.