DAR ES SALAAM: Global credit ratings agency Moody’s Ratings has affirmed Tanzania’s long-term foreign and local currency sovereign ratings at B1 with a stable outlook, signalling confidence in the country’s macroeconomic management and medium-term growth prospects.
In a rating action released on Friday, Moody’s said Tanzania continued to demonstrate strong economic growth, improving policy effectiveness and steady revenue mobilisation.
The agency added that public debt levels remain moderate compared with similarly rated sovereigns.
The affirmation follows a period of political tensions surrounding the 2025 general election, but Moody’s said it does not expect these to materially weaken Tanzania’s fiscal or external position in the near term.
A stable outlook indicates that the agency anticipates continuity in fiscal consolidation efforts and structural reforms.
Under Moody’s global scale, a B1 rating is classified as non-investment grade, or speculative. However, it indicates that the country currently has the capacity to meet its financial obligations, albeit with higher credit risk than investment-grade issuers.
Moody’s projects economic growth of at least 6 per cent going forward, driven by investment in manufacturing, mining and mineral processing, tourism expansion and transport-related services.
Real GDP growth was 5.5 per cent in 2024, with acceleration expected as energy and transport infrastructure projects improve productivity and connectivity.
Inflation has remained below 5 per cent since 2018, standing at 3.1 per cent in 2024. Moody’s attributed this to improved monetary policy implementation and the adoption of an interest-rate-targeting framework, which it said has strengthened macroeconomic stability.
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On public finances, non-grant revenue rose from 13.7 per cent of GDP in fiscal year 2020/21 to 15.9 per cent in 2025/26 and is projected to exceed 17 per cent in the current fiscal year.
The increase reflects stronger tax administration, digitisation of revenue systems, higher non-tax income and increased dividends from reformed state-owned enterprises.
Government debt stands just below 50 per cent of GDP. Although borrowing has risen to finance infrastructure and social services, Moody’s described the level as moderate relative to peers and expects it to stabilise, supported by robust nominal GDP growth and improved revenue collection.
The agency also cited progress in addressing foreign currency shortages, including greater exchange rate flexibility, improved functioning of the domestic foreign exchange market and elimination of the parallel market.
Moody’s said an upgrade could follow sustained revenue growth, a declining debt and interest burden, higher household incomes, export diversification and durable easing of political risks.
