Josephine Christopher is a senior business journalist for The Citizen and Mwananchi newspapers
Mwananchi Communications Limitted
Dar es Salaam. Tanzania’s economy remains resilient against global shocks linked to the Middle East conflict, even as elevated oil prices and supply chain disruptions continue to affect trade, inflation and fiscal pressures, according to the International Monetary Fund (IMF).
An IMF team led by Mr Nicolas Blancher visited Tanzania for discussions on the sixth and seventh reviews under the Extended Credit Facility (ECF), and the third and fourth reviews under the Resilience and Sustainability Facility (RSF).
Completion of the reviews would unlock about $375.5 million in financing, subject to approval by the IMF Executive Board.
At the conclusion of the mission, Mr Blancher said economic growth in 2026 is projected at 5.9 percent, while inflation is expected to rise to 4.7 percent. The current account deficit is also forecast to widen to 2.9 percent of GDP, largely due to spillover effects from the Middle East conflict.
“Higher oil and fertiliser prices, as well as disruptions to global aviation and value chains, will weigh on activity in the agriculture, tourism and transport sectors, and contribute to inflationary and external pressures,” he said.
Mr Blancher said steadfast budget implementation, including maintaining strong tax revenue performance, remains critical in safeguarding priority social spending on health, education and social protection, while supporting fiscal sustainability.
“Timely payment of tax refunds and continued clearance of domestic arrears should also support private sector activity. A mildly stimulatory monetary policy stance remains appropriate as long as price stability is preserved,” he said.
The IMF projects that Tanzania’s medium-term outlook will remain favourable, although risks are tilted to the downside.
“Growth would reach its potential of 6.3 percent over the medium term, supported by strong performance in mining, agriculture and tourism, while inflation is expected to remain within the Bank of Tanzania’s target range of 3 to 5 percent,” Mr Blancher said.
He added that despite recent oil price volatility, the current account deficit is expected to remain below 3 percent of GDP, supported by elevated gold prices.
However, external risks include a slowdown in the global economy, continued trade fragmentation, geopolitical tensions and possible declines in foreign development assistance. Domestic risks include fiscal pressures, social instability and delays in implementing reforms.
Building on progress achieved under the ECF- and RSF-supported programmes, Tanzania’s long-term growth trajectory will depend on accelerating structural reforms aligned with the country’s Development Vision 2050.
Key priorities include expanding domestic revenue mobilisation to create fiscal space for priority social and development spending while sustaining infrastructure investment; strengthening public financial management and investment efficiency; reinforcing the independence and credibility of monetary institutions; and improving the overall business and investment climate.
The IMF also underscored the importance of continued reforms to address climate-related vulnerabilities, including scaling up social protection systems and promoting investment in renewable energy to enhance long-term resilience and sustainability.
During the mission, IMF officials met Finance Minister Ambassador Khamis Mussa Omar, Bank of Tanzania Governor Emmanuel Tutuba, senior government officials, development partners, private sector representatives and civil society organisations.
The IMF team expressed appreciation to the Tanzanian authorities and stakeholders for what it described as candid and constructive discussions.
