Moody’s Affirms Tanzania B1 Rating: Manufacturing, Mining, and Tourism to Drive 6% GDP Growth

Moody’s Ratings has reaffirmed Tanzania’s long-term issuer ratings at B1 with a stable outlook, signaling a vote of confidence in the country’s economic resilience despite a turbulent political year in 2025.

Robust Economic Growth Engines
Tanzania’s economy is projected to grow by at least 6% annually through 2026. This “broad-based” momentum is being driven by a strategic shift toward private-sector investment. Key sectors include:

• Manufacturing & Mining: Rising investment in processing and value-addition.
• Infrastructure: Benefits from major public projects and improved energy reliability.
• Tourism: Strong recovery and expansion in transport services.

Policy effectiveness has also improved. The Bank of Tanzania (BoT) has successfully maintained inflation below 5% for nearly eight years. Recent moves to increase exchange-rate flexibility have helped eliminate parallel markets and reduced the economy’s vulnerability to global shocks.

Fiscal Strength & Debt Management
Although government debt has climbed to just under 50% of GDP due to high infrastructure spending, Moody’s describes this level as “moderate” compared to regional peers.

Revenue Mobilization: A major highlight is the success in tax collection. Non-grant revenue is expected to exceed 17% of GDP this year, up from 13.7% in 2021.

Arrears & Interest: While interest costs now consume 16% of revenue, the agency expects the debt burden to stabilize as the government continues to digitize tax administration and improve compliance.

Post-Election Political & Social Challenges
In relation to the unrest surrounding the 2025 general elections, while stability returned after the presidential inauguration, Moody’s warns of “underlying social risks.”

Demographic Pressure: A rapidly growing, youthful population is demanding more jobs and social services.

Income Gaps: Low household incomes remain a core credit weakness, reducing the country’s ability to absorb financial shocks.

Financing Risks: The report notes that access to low-interest “concessional” loans has deteriorated following the election unrest, potentially making future borrowing more expensive.

ESG Profile
Moody’s assigned Tanzania a Credit Impact Score of CIS-4 (Highly Negative), meaning ESG factors currently weigh on the credit rating:

Environmental (E-4): High vulnerability to climate shocks like droughts and floods, which threaten the agricultural sector.

Social (S-5): Significant gaps in access to basic services (electricity, clean water) and education outcomes.

Governance (G-4): While institutional strength is increasing, challenges remain in policy execution and transparency compared to global peers.

Source: This news article is based on the official rating by Moody’s Ratings released on February 20, 2026. For more details, the full rating is available on the Moody’s Website.