South Africa Solidifies Relationship with Tanzania: A Rosy Future?

17 May 2017 Michael Wieteska, Research Assistant, Indian Ocean Research Programme

Background

Having formed a close relationship during the struggle against apartheid, which was then reinforced by the influx of South African capital into Tanzania in the post-apartheid period, the two states have strong diplomatic and economic ties. Building on those historical connections, South African President Jacob Zuma’s recent State visit to Tanzania has ensured further progress that should see the relationship further strengthened.

Comment

President Zuma’s visit concluded with the launch of the South Africa-Tanzania Bi-National Commission (BNC), with his Tanzanian counterpart, President John Magufuli. According to statements issued by the South African Presidency, the BNC will be the highest mechanism regulating the relationship between the two countries. The official launch of the BNC comes at a time when trade between the two countries is booming. Figures indicate that South African exports to Tanzania were valued at 6.5 billion rand ($657.8 million), while imports from Tanzania amounted to 3.5 billion rand ($354.2 million). Several factors underpin recent trade growth between the two countries: falling trade barriers and the South Africa-Tanzania Double Taxation Agreement (DTA), which has promoted market access and business confidence between the two countries.

South African industrial goods and foreign direct investment  will prove vital in the transformation of the Tanzanian economy. One of President Magufuli’s major economic priorities, the renewed push for greater industrialisation will be dependent to a large extent on the capital and expertise of the South African private sector. In turn, in the wake of President Zuma’s Cabinet reshuffle and the subsequent downgrading of South Africa’s sovereign credit rating to junk status, enhanced trade and investment co-operation with Tanzania could be crucial in efforts to revitalise the stalled South African economy.

Apart from strengthening economic engagement, the role of the BNC will extend to boosting co-operation on a number of previously untapped fronts. People-to-people links represent an area of particular potential. The burgeoning partnership between the two states stands to benefit from support at the grassroots level thanks to a consistently favourable view of South African business ventures held by many Tanzanians. The cordial relationship between Pretoria and Dodoma has endured in spite of occasional disagreements. The South African Government’s handling of the Sudanese President al-Bashir case and subsequent threat of withdrawal from the International Criminal Court marks one of the few cases of divergence between South Africa and Tanzania, but there was little in the way of political fallout.

Despite that, South Africa’s increasingly assertive – and not entirely successful – attempts to play a greater role in continental security may not be welcomed by everyone. Some states in the region, notably Angola, the Democratic Republic of Congo and Zimbabwe, refuse to accept South Africa as the guardian of their interests and security. In that regard, South Africa’s vision for itself as a continental security leader has the potential to create friction, including among other members of the South African Development Community (SADC), indirectly testing its relationship with Tanzania.

Regional political élites have expressed concern about the South African agenda, pointing to the country’s worsening domestic political and economic situation as a sign that President Zuma would be better to redirect his efforts inwards. While the Tanzanian visit serves to strengthen the economic ties between the two states, political upheaval within South Africa, a not unlikely prospect, may lead to further economic recession there. That would shatter investor confidence and reduce the capital available for investment in Tanzania, with negative effects on both countries. As the 2019 South African presidential election draws nearer, South Africa’s next leader will, either directly or indirectly, play a significant role in shaping the economic prosperity and stability of southern Africa.

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