• Fitch affirms Tanzania’s B+ rating with stable outlook
• Growth expected to outpace peers, driven by infrastructure and mining
• External shocks, especially from Middle East tensions, remain a risk

Fitch Ratings on Friday, March 27, affirmed Tanzania’s long-term foreign-currency issuer default rating at B+, with a stable outlook.

The rating reflects what the agency described as “relatively strong real GDP growth and low inflation,” supported by ongoing reforms and access to external financing under the country’s current IMF program.

Tanzania’s economy is expected to grow by 6% in both 2026 and 2027, well above the 4.5% median for countries in the same B rating category. Fitch attributes this performance to expansion in agriculture and mining, as well as large-scale investments in infrastructure projects such as the standard gauge railway and the East African crude oil pipeline linking Uganda to Tanzania.

Still, the agency flagged vulnerabilities. Tanzania’s heavy reliance on agriculture leaves it exposed to climate shocks and natural disasters, which could weigh on macroeconomic stability.

Fitch also pointed to growing external risks tied to global tensions. A potential escalation of the conflict involving Iran could affect Tanzania’s outlook, as the country depends heavily on Gulf states for key imports—about 62% of its fuel and nearly 40% of its fertilizers.

Tourism, another pillar of the economy, could also be affected. A significant share of visitors transit through the Gulf region, and a prolonged disruption could trigger pressure on inflation, foreign exchange reserves, and growth.

On the fiscal side, Tanzania’s debt trajectory is improving. Public debt is projected to fall to 47% of GDP by 2027, down from 50% in 2025, and below the 54% median for B-rated countries. Fitch links this trend to a narrowing fiscal deficit, expected at 3% of GDP, and strong nominal growth.

However, the debt profile remains sensitive to currency depreciation, given that external debt accounts for about 68% of the total.

Fitch said a downgrade could result from a sustained drop in foreign exchange reserves or a rise in debt levels. An upgrade, on the other hand, would depend on stronger reserves and improvements in macroeconomic policy management.

Lydie Mobio