Zanzibar’s Mwinyi: We Left Political Differences Behind, Are Heading to Economic Advancement

Eastern Africa’s Zanzibar is transforming from the largest slave trade center in the world into the largest African center for economic tourism with it accounting for about 30% of GDP.

President Hussein Mwinyi confirmed that Zanzibar’s political parties have abandoned their differences to maximize economic and food security and accelerate the infusion of foreign and domestic investments, so that the commercial focus of the Middle East remains in Africa.

In an interview with Asharq Al-Awsat, Mwinyi said that “Zanzibar has become politically stable, which created an environment for development, investment, social and economic prosperity, and transformed political momentum into economic momentum.”

The president, however, stressed that the biggest challenge facing Zanzibar’s economy is the weakness of its basic infrastructure sector.

Mwinyi called on Saudi businessmen to invest in the opportunities offered by his country.

Moreover, Mwinyi stressed the importance of strengthening trade, economic and investment relations between Zanzibar and Saudi Arabia, and urged taking advantage of commercial opportunities created by the latter’s plan for national transformation, “Vision 2030.”

Speaking about the level of trade exchange, Mwinyi stressed that relations between Saudi Arabia and Tanzania are long-term and of mutual benefit.

Zanzibar is a semi-autonomous province which united with Tanganyika in 1964 to form the United Republic of Tanzania.

Tourism Cooperation

“Tanzania is a tourist destination,” affirmed Mwinyi, adding that “tourism continues to play a major role in its economy.”

“When we were invited to Saudi Arabia to participate in the recent travel and tourism summit in Riyadh, we were happy to be here in order to learn from this industry,” said Mwinyi, who participated in the 22nd World Travel & Tourism Council Global Summit (WTTC's) in Riyadh.

“I believe that my participation in the recent summit in Riyadh was a great opportunity to meet with some Saudi officials to discuss some related issues and ways to enhance cooperation in all fields,” the president told Asharq Al-Awsat.

“I also had the opportunity to meet with the Federation of Saudi Chambers and business sector officials. We raised our requirements for investment in Tanzania as well as in various sectors,” said Mwinyi.

He pointed out that his country is a tourist destination, especially Zanzibar, where tourism contributes about 30% of the GDP.

Mwinyi added that his country is in a state of continuous research to improve its tourism industry.

Investment Opportunities

“There are wide areas of cooperation between Saudi Arabia and Tanzania in general, and with Zanzibar in particular. Therefore, we are looking for Saudi investments in Tanzania, whether governmental or private,” revealed Mwinyi.

“We have many areas where we need foreign direct investment, whether in infrastructure development, tourism, or social services such as hospitals and schools,” said Mwinyi.

Mwinyi explained that possible areas of bilateral cooperation include energy, water systems, roads, infrastructure, airports, and seaports.

Additionally, the president said he had held “good” discussions with Ahmed Al-Khateeb, the Saudi Minister of Tourism.

“Zanzibar depends a lot on tourism. So, when the coronavirus pandemic hit, it greatly affected our economy,” explained Mwinyi.

“Currently we are witnessing the return of the tourism sector to pre-pandemic numbers,” he revealed.

Business Relations

According to the latest official data, the volume of trade between Saudi Arabia and Zanzibar during the past five years amounted to approximately SAR 15.9 billion ($4.2 billion), while it reached SAR 2.8 billion ($746 million) in the first half of 2022.

It had achieved SAR 4.7 billion ($1.2 billion) in 2021 and SAR 1.5 billion ($400 million) in 2020, an increase of 216% in 2021 compared to 2020.

Shift to Economic Momentum

“Zanzibar needs proper infrastructure to attract capital and investment. So, this is the biggest challenge. But I must say that economically and politically, we are a stable country,” said Mwinyi.

“We had political issues in the past, but we decided to sit down and sort out our differences.”

“Now that we are politically stable, we hope that this will create an environment for investment and social and economic prosperity.”

“One of the most important areas we are working on is attracting capital and foreign direct investment,” said Mwinyi regarding his government's plan to face the challenges ahead.

“We talked with many countries and private sectors to bring capital to Zanzibar,” revealed the president, adding that “there are a lot of investments happening, especially in the tourism field.”

“We are also working to develop the infrastructure,” he affirmed.

“We now have the private sector investing in our seaports and airports and building roads and water systems, especially in the energy sector.”

Japan's core inflation hit 3.0% in February and an index stripping away the effect of fuel rose at the fastest pace in nearly a year, a sign of broadening price pressure that reinforces market expectations of further interest rate hikes.

The data came in the wake of Bank of Japan (BOJ) Governor Kazuo Ueda's warning, made after its decision to keep interest rates steady on Wednesday, that rising food costs and stronger-than-expected wage growth could push up underlying inflation.

The increase in the core consumer price index (CPI), which strips away the effect of volatile fresh food costs, compared with a median market forecast of a 2.9% gain. That kept core inflation above the BOJ's 2% target for the 35th straight month.

It slowed from the previous month's 3.2% rise due largely to the resumption of subsidies to curb fuel costs, government data showed on Friday.

A separate index that excludes the effects of both fresh food and fuel costs, closely watched by the BOJ as a broader price trend indicator, rose 2.6% in February from a year earlier after climbing 2.5% in January. It was the fastest year-on-year increase since March 2024, when it rose 2.9%.

"The strength in underlying inflation in February suggests that the Bank of Japan could hike rates at its next meeting in May, but we still expect that uncertainty over the impact of US tariffs will delay a move to July," said Marcel Thieliant, head of Asia-Pacific at Capital Economics.

"Either way, the continued strength in inflation supports our view the Bank will tighten policy more aggressively than most anticipate," he said.

Households continued to face rising living costs with the price of vegetables up 28% year-on-year, that of rice rising 81.4% and electricity bills up 9%, the data showed.

Services inflation slowed to 1.3% in February from 1.4% in January, the data showed, suggesting that companies were passing on rising labor costs at a gradual pace.

The CPI data will be among factors the central bank will scrutinize in compiling fresh quarterly growth and price forecasts due at the next policy meeting on April 30-May 1.

The BOJ ended a decade-long, massive stimulus last year and raised interest rates to 0.5% in January on the view Japan was on the cusp of durably hitting its inflation target.

BOJ policymakers have signaled their readiness to keep raising interest rates if they become convinced that Japan will see inflation sustained around 2% backed by solid wage gains.

Over two-thirds of economists polled by Reuters expect the BOJ to hike rates to 0.75% in the third quarter, most likely in July.

Zanzibar’s Mwinyi: We Left Political Differences Behind, Are Heading to Economic Advancement