Moody’s Ratings has officially reaffirmed Tanzania’s long-term issuer rating at B1 with a stable outlook, signaling a vote of confidence in the nation’s economic resilience. The rating reflects a balance between the country’s strong growth momentum and underlying vulnerabilities, such as a weak institutional framework and low household incomes.
The credit rating agency projects that Tanzania’s economy will experience a robust annual growth rate of at least 6% through 2026. This momentum is being driven by a strategic shift toward private-sector investment, with rising investments particularly focused on processing and value-addition in the manufacturing and mining sectors, alongside a strong recovery in tourism.
Tanzania’s fiscal health has also shown significant improvement due to successful revenue mobilization efforts. Non-grant revenue is expected to exceed 17% of GDP in the current fiscal year, a notable increase from 13.7% in 2021, supported by the digitization of tax administration and improved compliance. Although government debt has climbed to just under 50% of GDP to finance infrastructure and social development, Moody’s still considers this debt burden to be moderate compared to regional peers.
Economic policy effectiveness has strengthened following successive government reforms. Notably, the Bank of Tanzania has successfully maintained inflation below the 5% mark for nearly eight years. Additionally, recent moves to increase exchange-rate flexibility and promote local-currency use have helped eliminate parallel markets, reducing the economy’s vulnerability to global shocks.
Despite these positive economic indicators, Moody’s warned of underlying social and political risks following the unrest surrounding the 2025 general elections. While stability has returned, a rapidly growing population demanding more jobs, persistently low household incomes, and deteriorated access to low-interest concessional loans present ongoing challenges that could weigh on future investment and fiscal outcomes.