- Signals Investor Confidence as Government Pushes Forward with Economic Reforms
By Business Insider Reporter
Global credit rating agency Fitch Ratings has affirmed Tanzania’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B+’ with a Stable Outlook, signaling international confidence in the country’s fiscal and macroeconomic stability.
In its latest assessment, Fitch noted that the ‘B+’ rating reflects Tanzania’s “moderate public debt levels, robust GDP growth potential, and low inflation,” while the stable outlook suggests the rating is unlikely to change in the near term barring major economic or political shocks.
Key signals for investors
The rating is a critical indicator used by global investors and lenders to gauge the risk of doing business with Tanzania or investing in its sovereign bonds.
A ‘B+’ rating sits in the speculative-grade bracket but is supported by improving fundamentals.
For Tanzania, the affirmation means the government and private sector can continue accessing external credit markets with relatively moderate risk premiums.
It also supports the country’s ambition to attract more foreign direct investment (FDI) into key sectors such as energy, infrastructure, agriculture, and manufacturing.
“This is a vote of confidence in Tanzania’s economic direction under President Samia Suluhu Hassan,” said an economist at the University of Dar es Salaam. “It suggests macroeconomic discipline is holding, even amid a challenging global environment.”
Steady but cautious growth
Tanzania’s economy has shown resilience in recent years. After a slowdown during the COVID-19 pandemic, growth rebounded to 5.2% in 2023 and is projected to reach 5.5% in 2025, driven by robust public investment, tourism recovery, and rising commodity exports – particularly gold and natural gas.
The government’s ongoing reforms aim to improve revenue collection, reduce fiscal deficits, and enhance infrastructure.
Tanzania has also ramped up efforts to digitalize public services and attract investment in Special Economic Zones (SEZs), with the goal of transitioning into a semi-industrialized middle-income economy.
Inflation has remained within manageable levels – averaging around 4% – aided by food price stability and cautious monetary policy by the Bank of Tanzania.
Challenges persist
Despite the positive rating, Fitch warned of persistent structural weaknesses. These include: weak domestic revenue mobilization, which constrains fiscal space; high reliance on concessional and semi-concessional borrowing, and governance and business climate concerns, including regulatory unpredictability and bureaucratic hurdles.
Tanzania’s public debt stood at approximately 41.8% of GDP in 2024, a level considered sustainable but requiring vigilance as infrastructure and social spending increase.
Fitch also noted the importance of maintaining a positive reform trajectory to support long-term growth and investor confidence.
Government reaction
Reacting to the announcement, a senior official at the Ministry of Finance said the affirmation is a testament to “the government’s prudent economic management and commitment to inclusive growth.”
The government reiterated its strategy to reduce the budget deficit through enhanced tax collection, curb non-priority spending, and promote public-private partnerships (PPPs) to drive development. As the government finalizes its 2025/26 national budget, the Fitch rating may provide a timely boost in confidence for international partners and lenders — especially those funding large infrastructure projects such as the Standard Gauge Railway, Julius Nyerere Hydropower Project, and new roads and ports.
