DAR ES SALAAM: TANZANIA’S economy has received a vote of confidence from global ratings agency Moody’s Ratings, which has affirmed the country’s long-term foreign and local currency sovereign ratings at B1 and maintained a stable outlook, signalling resilience, steady reform progress and sustained economic momentum.
In a rating action released on Friday, Moody’s said Tanzania continues to demonstrate strong growth prospects, improving policy effectiveness and strengthening revenue mobilisation, while public debt remains moderate relative to peers.
The affirmation means Tanzania has avoided a downgrade following the 2025 General Election unrest.
More importantly, the stable outlook indicates Moody’s expects the country’s growth, fiscal management and reform trajectory to continue without major deterioration.
Under Moody’s global rating scale, B1 is a non-investmentgrade rating that sits within the speculative category, but it indicates that a country currently has the capacity to meet its financial obligations, although it faces higher credit risk than investmentgrade sovereigns.
Moody’s ratings move upward from Caa, B, Ba, Baa and A categories to Aa and Aaa at the top, with Aaa representing the highest credit quality.
Tanzania’s B1 rating places it above lower B2 and B3 categories, and any movement upward toward Ba or Baa categories would signal improving credit strength.
Moody’s projects Tanzania’s economy will grow at least 6 per cent going forward, driven by rising investment in manufacturing, mining and mineral processing, tourism expansion and transportrelated services.
This level of growth places Tanzania among the strongerperforming economies in SubSaharan Africa and reinforces its ambition to transition toward a more private-sector-led growth model.
Real GDP growth stood at 5.5 per cent in 2024, with further acceleration expected as infrastructure improvements in energy and transport enhance productivity and attract investment.
The agency said that Tanzania’s resource endowment and ongoing infrastructure upgrades could lift growth even higher if business environment reforms continue and foreign direct investment strengthens.
For investors, sustained growth above 6 per cent signals expanding market size, improving corporate earnings prospects and stronger revenue potential for government.
One of the strongest positives highlighted is Tanzania’s record of price stability. Inflation has remained below 5 per cent since 2018, with 2024 inflation recorded at 3.1 per cent.
Moody’s credits improved monetary policy implementation and the recently adopted interest-rate-targeting framework for maintaining macroeconomic stability.
Low inflation reduces uncertainty for businesses, protects household purchasing power and supports long-term planning for investors.
A key structural improvement cited is revenue mobilisation.
Non-grant revenue rose from 13.7 per cent of GDP in fiscal year 2020/21 to 15.9 per cent of GDP in 2025/26 and is expected to exceed 17 per cent of GDP in the current fiscal year.
This reflects improved tax administration, digitisation and better compliance, increased non-tax revenue and higher dividends from reformed stateowned enterprises.
Improved domestic revenue reduces reliance on external borrowing and concessional financing, strengthening fiscal independence.
Moody’s indicated that stronger revenue collection will help stabilise the debt burden over time.Government debt stands just below 50 per cent of GDP.
Although debt has risen due to infrastructure and social spending, Moody’s describes the level as moderate relative to peer countries and expects it to stabilise at current levels, supported by strong nominal growth and improved revenue performance.
Importantly, Tanzania has no recorded sovereign default since 1983, reinforcing its credibility in international capital markets.
Moody’s also highlighted progress in addressing foreign currency shortages.
Authorities have increased exchange rate flexibility, improved domestic foreign-exchange market functioning, eliminated the parallel market and reduced reliance on central bank reserves.
These reforms enhance the economy’s ability to absorb external shocks and improve investor confidence.
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The rating committee further noted that Tanzania’s institutional and governance strength has increased, reflecting gradual improvements in policy predictability and economic management.
A stable outlook means Moody’s does not expect a rating downgrade in the near term. The agency believes strong investment-led growth and sustained external buffers will offset elevated political and social risks. It also signals that Tanzania’s reform momentum is intact.
For the government, this translates into continued access to international financing, reduced borrowing risk premiums and greater credibility with development partners.
For businesses and investors, it reinforces the view that Tanzania remains a stable frontier growth market with improving macroeconomic fundamentals.
Moody’s also outlined conditions that could lead to a future