Tanzania's Vanishing Democracy: Risks and Rewards in an Uncertain Political Landscape

The political crisis in Tanzania has taken a dramatic turn as Chadema, the main opposition party, announced that its leader, Tundu Lissu, has been missing since his arrest in late 2024. This latest escalation underscores a deepening authoritarian turn under the Chama Cha Mapinduzi (CCM) government, with profound implications for investors navigating the East African economy. While Tanzania’s natural resources and strategic location offer undeniable opportunities, the erosion of democratic norms and escalating repression of dissent now pose significant risks to long-term stability and economic growth.

The Political Tightrope

Tanzania’s political trajectory since President Samia Suluhu Hassan’s 2021 rise to power has been marked by contradictory signals. Early reforms—such as lifting media bans and releasing political prisoners—fueled optimism that Tanzania might reclaim its status as a democratic beacon in the region. Yet, Hassan’s compromises with Magufuli-era hardliners have since stifled progress. The arrest and treason charges against Lissu, followed by Chadema’s disqualification from the 2025 elections, reveal a government increasingly willing to weaponize the judiciary to silence dissent.

The tactics are familiar: targeted abductions, torture, and the systematic marginalization of opposition voices. By mid-2024, over 83 opposition members had been disappeared or killed, according to local human rights groups. Even smaller parties like ACT-Wazalendo, which has challenged election irregularities legally, face state-backed harassment. This environment has pushed Tanzania into Freedom House’s “Not Free” category for 2025—a stark reversal from its earlier status as a regional democracy.

Economic Crossroads

The political crackdowns are already impacting Tanzania’s economy. Foreign direct investment (FDI) has stagnated since 2020, with inflows dropping from $1.2 billion to an estimated $800 million in 2024. A key driver of this decline is investor wariness of political instability.

Tourism: The Fragile Engine
Tourism accounts for 18% of GDP, but the sector faces dual threats. First, the government’s violent eviction of Maasai communities from the Ngorongoro Conservation Area—a UNESCO World Heritage Site—has drawn global condemnation, risking tourist boycotts. Second, the concentration of power in CCM-aligned elites has stifled transparency in tourism management, deterring foreign hotel and safari operators.

Infrastructure and Debt
While Tanzania’s infrastructure projects—such as the Standard Gauge Railway—have attracted Chinese and African Development Bank funding, their viability depends on political stability. Delays in debt renegotiations, exacerbated by CCM’s focus on patronage over fiscal discipline, threaten to push public debt to unsustainable levels. The government’s 2024 budget allocates 12% of GDP to debt servicing, crowding out spending on healthcare and education.

CCM’s Internal Strife

The ruling party’s divisions loom large. Hassan’s faction, which seeks to balance reforms with CCM’s survival, faces relentless pressure from hardliners like Paul Makonda, who advocate for Magufuli-era authoritarianism. This factionalism is visible in stalled electoral reforms and the reappointment of controversial figures to key security roles. The 2025 elections, won overwhelmingly by CCM (99% of local seats), lacked credible oversight, further eroding public trust.

Investment Considerations

For investors, Tanzania presents a paradox: high growth potential meets escalating political risk. Key sectors to monitor include:
- Mining: The country’s gold and uranium reserves remain attractive, but labor disputes and land grabs (like those targeting the Maasai) could disrupt operations.
- Agriculture: The government’s “villagization” policies aim to boost productivity, but forced relocations risk social unrest.
- Technology: Digital infrastructure projects, such as the Tanzania Communications Regulatory Authority’s 5G rollout, could benefit from state support—provided the political climate stabilizes.

Conclusion: Weighing the Odds

Tanzania’s political crisis is not merely a domestic issue—it is a systemic threat to economic progress. With Chadema sidelined and dissent criminalized, the path to democratic accountability remains blocked. Foreign investors should proceed with caution, particularly in sectors reliant on social stability or international credibility (e.g., tourism, FDI-heavy industries).

The numbers tell the story: FDI has plummeted, tourism revenue is stagnant, and public debt is soaring. Meanwhile, Freedom House’s “Not Free” rating and the Tanganyika Law Society’s documentation of 83 disappearances underscore a deteriorating governance environment. While sectors like mining may offer short-term gains, the long-term outlook hinges on whether President Hassan can rein in hardliners—or if Tanzania’s descent into authoritarianism will accelerate. For now, the scales tilt toward risk over reward.

Investors should prioritize engagement with local stakeholders, monitor Freedom House’s annual rankings, and track FDI inflows closely. In a nation where democracy is vanishing, patience—and vigilance—will be the watchwords.