BMI View: We forecast positive growth across Tanzania s freight modes in ---- and ----, and over our medium-term forecast period to ----. Much of this growth - in air and rail freight in particular - is coming from a low base, and will pick up in line with the robust expansion we expect in Tanzania s economy, which is riding on a natural gas development boom. ...However, the real growth picture belies the very low growth in trade in nominal US dollar terms. The ongoing depreciation of the Tanzanian shilling against the greenback - in common with most other Sub-Saharan African countries, the currency is losing value due to general dollar strength, a wide current account deficit and an overvalued position in the first place - will see total trade grow by just -.- , to USD--.-bn), followed by a more robust expansion of -.- in ----, to USD--.-bn. We expect a slight moderation in growth in road freight volumes in ----, but the medium-term picture is bright. ...The sector is overwhelmingly the most important in the Tanzanian freight mix, with volumes dwarfing both air and rail freight. Importantly, the sector does not only cater for domestic volumes, but given Tanzania s coastline, it is also an important transit route for landlocked African states including Rwanda, Burundi, the DRC and Zambia.
...Rail freight will return to growth in ---- following a -.- decline in volumes in ----, and remain positive in ---- and over the remainder of our medium-term forecast period. Growth will be somewhat challenged by domestic challenges from low investment in traditional agricultural exports and an outdated network, although transit volumes will support growth, especially from Rwanda. ...Rail freight will return to growth in ---- following a -.- decline in volumes in ----, and remain positive in ---- and over the remainder of our medium-term forecast period. Growth will be somewhat challenged by domestic challenges from low investment in traditional agricultural exports and an outdated network, although transit volumes will support growth, especially from Rwanda. In ----, Tanzania s rail freight handling will expand by -.- to ---,--- tonnes, marking a return to growth following a -.- decline in volumes in ----. ...This is due largely to low statistical base effects, although a relatively upbeat outlook for the consumer will support growth, as will ongoing investment infrastructure. Air freight is a tiny part of Tanzania s freight transport mix, and even with sustained growth it will remain of minimal importance for some years.
...Booming economy will drive demand for lightweight consumer products and once airport infrastructure is improved, it will be able to cater to higher demand. Strong government support to improve TAZARA could improve rail freight volumes in medium term. ...
