What it means as Tanzania stays on B+ rating with stable outlook

The rating reflects a balance between ongoing reforms and persistent vulnerabilities, suggesting that the country’s credit position is unlikely to shift significantly in the near term unless deeper changes are implemented.

Economic experts interpret the outcome as a sign of stability rather than stagnation, pointing to continued growth momentum alongside the need for stronger fiscal and institutional reforms.

A senior lecturer at the University of Dar es Salaam Business School, Dr Tobias Swai, said the stable outlook provides cautious optimism, indicating that the country is on a trajectory that could lead to an upgrade if reforms are sustained.

He cited the implementation of Vision 2050 and the ongoing Five-Year Development Plan as key drivers expected to strengthen the country’s economic foundation.

“Recent policy measures, including enforcing the use of the Tanzanian shilling in domestic transactions and implementing tax reforms, are helping to stabilise the economy and improve fiscal performance,” he said, adding that continued progress could positively influence future ratings.

Tanzania's rating reflects its relatively strong real GDP growth and low inflation, underpinned by reforms and access to external financing under the current International Monetary Fund (IMF) programme.

The rating is constrained by weak governance and low, albeit improving, government revenue relative to 'B' category peers and a weak macroeconomic policy framework that leads to distortions in the foreign exchange (FX) market.

Independent financial analyst Mr Christopher Makombe described the overall rating as reflective of an economy performing relatively well, but still facing structural constraints.

He pointed to strong economic growth, controlled inflation and improving fiscal discipline as key strengths, supported by continued engagement with the International Monetary Fund, which helps anchor reform efforts and reassure investors.

"This engagement reassures investors that reforms will remain on track," he said

However, he cautioned that challenges such as low domestic revenue mobilisation, governance concerns and limited foreign exchange reserves continue to weigh on the country’s credit profile.

According to Fitch projections, Tanzania’s economy is expected to grow by around six percent in 2026 and 2027, outperforming many countries within the same rating category.

Growth is likely to be driven by agriculture, mining and major infrastructure investments, including the Standard Gauge Railway and the East African Crude Oil Pipeline.

Inflation is projected to remain relatively low, supporting macroeconomic stability.

On the fiscal front, the government is expected to maintain a moderate budget deficit of about three per cent of gross domestic product (GDP), while public debt is projected to decline gradually from around 50 percent to 47 percent of GDP over the medium term.

Revenue collection has shown signs of improvement, indicating progress in domestic resource mobilisation, although it remains below levels seen in comparable economies.

Despite these gains, analysts say Tanzania’s low revenue base continues to limit its ability to finance development independently, increasing reliance on borrowing and external support.

Concerns around governance, institutional effectiveness and policy consistency also remain critical factors influencing investor confidence.

In addition, foreign exchange reserves, currently covering about two and a half months of imports, leave the economy exposed to external shocks, including rising global fuel and fertiliser prices or fluctuations in tourism.