Fitch Reaffirms Tanzania Credit Rating at B+ With 6% GDP Growth in 2026 and 2027 and Low Inflation

On 27th March 2026, Fitch Ratings reaffirmed Tanzania’s Long-Term Foreign-Currency Issuer Default Rating at B+ with a Stable Outlook, reflecting sustained economic growth, low inflation, and continued access to external financing under the International Monetary Fund (IMF) programme.

The rating agency stated that Tanzania’s credit profile is supported by real GDP growth projected at 6% in both 2026 and 2027, above the B-rated peers’ median of 4.5%, driven by expansion in agriculture, mining, and infrastructure investment, including the Standard Gauge Railway and the East African Crude Oil Pipeline.

Fitch noted that policy continuity is expected following the October 2025 presidential election, in which President Samia Suluhu Hassan secured 98% of the vote, supporting the ongoing Extended Credit Facility (ECF) and Resilience Sustainability Facility (RSF) programmes with the IMF.

However, the rating remains constrained by weak governance indicators, relatively low government revenue despite recent improvements, and structural weaknesses in the macroeconomic policy framework, particularly affecting the foreign exchange market.

Fitch forecasts Tanzania’s fiscal deficit to remain around 3% of GDP in the fiscal years ending June 2026 and 2027, supported by improved tax collection under the government’s Medium-Term Revenue Strategy.

Revenue collection increased from 14.2% of GDP in FY21 to 15.9% in FY25, with further gains expected to support higher spending on healthcare, education, and capital investment.

Government debt is projected to decline to 47% of GDP by FY27 from 50% in FY25, remaining below the B-rated median of 54%, supported by strong nominal GDP growth and relatively narrow fiscal deficits.

Fitch highlighted that 68% of Tanzania’s debt is external, exposing the debt trajectory to exchange rate risks, although a high share of concessional financing supports debt sustainability.

On the external side, the agency expects the current account deficit to widen to 3.5% of GDP in 2026, driven by higher fuel import costs and potential disruptions to tourism linked to geopolitical risks.

Travel exports generated USD 4.4 billion in 2025, accounting for 25% of total exports, while gold exports reached USD 4.7 billion, representing 27% of total exports, partially offsetting external pressures.

International reserves are projected to cover 2.5 months of external payments in 2026–2027, below the B-rated median of 4.8 months, indicating continued external vulnerability.

Fitch identified risks linked to global geopolitical developments, noting that Tanzania relies on Gulf Cooperation Council countries for about 62% of its fuel imports and 40% of fertiliser imports, while a significant share of tourist arrivals transit through the region.

A prolonged disruption in the region could increase inflation, weaken reserves, and affect growth performance.

The agency also reported improvements in public financial management, with verified supplier and VAT refund arrears declining to 0.2% of GDP by December 2025 from 1.2% in December 2022, and no new accumulation of arrears expected.

Fitch indicated that a downgrade could result from sustained declines in foreign exchange reserves, rising debt levels, or weaker growth prospects, while an upgrade would depend on stronger reserves, improved macroeconomic policy credibility, and continued fiscal consolidation.