Dar es Salaam. In the high-stakes theatre of global emerging markets, resilience is often a term used loosely to describe temporary survival.
However, the decision by Moody’s Ratings on February 20, 2026, to affirm Tanzania’s local and foreign currency long-term issuer ratings at B1, while maintaining a stable outlook, suggests a far more profound structural reality.
It signals that Tanzania has moved beyond mere survival.
And that it has established an economic “fortress” that has successfully weathered a historic sequence of domestic and global upheavals.
The affirmation comes at a critical juncture for East Africa.
While several neighbouring economies grapple with the suffocating weight of debt distress and currency volatility, Tanzania’s B1 status, bolstered by a local-currency country ceiling of Ba1, paints a picture of a nation that has internalised its shocks.
From the supply chain paralysis of the Covid-19 pandemic and the inflationary pressures of geopolitical conflicts in Europe to the acute domestic stress of the 2025 post-election period, the Tanzanian economy has remained intact and demonstrably robust.
The anatomy of institutional resilience
The core of Moody’s rationale rests on a sophisticated balance between Tanzania’s inherent challenges and its burgeoning growth momentum.
Moody’s notes that the B1 affirmation reflects “… strong growth momentum and resilience to shocks, supported by economic, monetary and external policies as the authorities gradually shift the growth model towards greater private-sector-led investment.”
Perhaps the most striking evidence of this resilience is the economy’s performance following the unprecedented unrest of late 2025.
In many frontier markets, such political volatility would trigger a protracted economic contraction.
In Tanzania, Moody’s observed that stability has since been restored but underlying social risks from low incomes and rapid population growth heighten the risk of renewed instability.
The agency further said conditions stabilized quickly after the president’s inauguration with minimal near-term impact on economic activity.
“This suggests that the economic engine is now sufficiently diversified and structurally sound enough to function independently of political cycles, a high-value signal for international investors and domestic technocrats alike,” the agency noted.
Transformation of the growth model
Tanzania is currently in the midst of a tectonic shift in its economic DNA.
The authorities are gradually transitioning from a state-heavy growth model toward one led by private-sector investment.
Moody’s expects this momentum to deliver “growth of at least 6 percent moving forward, underpinned by rising investment in manufacturing, mining and processing, alongside continued expansion in tourism and transport-related services.”
This transition is supported by what the ratings agency describes as “strengthened policy effectiveness.”
Since 2023, Tanzanian authorities have moved aggressively to resolve longstanding foreign-currency shortages.
Moody’s details that authorities have been addressing longstanding foreign-currency shortages by promoting local-currency use and improving the functioning of domestic foreign-exchange markets, reducing reliance on central bank reserves.
The increased exchange-rate flexibility has not only “eliminated the parallel market” but has fundamentally enhanced the economy’s capacity to absorb external shocks.
The central bank’s record is also cited as a pillar of stability, with Moody’s noting that it has “maintained a strong record of price stability, with inflation remaining below 5 percent since 2018.”
Even as monetary policy transmission remains a challenge in many emerging markets, the agency notes that Tanzania’s recently adopted interest-rate-targeting framework is functioning effectively, with inflation remaining low and short-term interbank and treasury bill rates converging toward the policy rate.
Fiscal discipline and revenue mobilisation
A significant pillar of the Tanzanian story is its fiscal management.
While government debt has risen to approximately 50 percent of GDP to finance massive infrastructure and social-development spending, Moody’s classifies this burden as moderate relative to peers and expects it to stabilize at the current level, supported by strong nominal growth and revenue mobilization.
The numbers tell a story of administrative success.
Moody’s highlights that ongoing improvements in revenue generation will help temper the impact of higher spending demands.
Non-grant revenue has surged from 13.7 percent of GDP in the 2020/21 fiscal year to 15.9 percent in 2025/26.
Current projections place it on track to rise above 17 percent of GDP in the current fiscal year.
This trajectory is driven by “improvements in tax administration, digitization and compliance, as well as rising non-tax revenues, including higher dividend income following structural governance reforms across state-owned enterprises.”
However, Moody’s is candid about the hurdles: “interest costs have also increased amid more constrained access to concessional lending, to now consume 16 percent of revenue.”
This reality places a premium on the government’s ability to continue its domestic revenue mobilization efforts.
Mandate for a new confidence
The affirmation of the B1 rating is a technical validation and a clear mandate for the nation’s policymakers and technocrats.
The data confirms that the foundation of the Tanzanian economy is already firmly set.
The fear of collapse, which often dictates cautious and reactive policy, can now be replaced by a new confidence and courage to create policies that support more inclusive growth.
Moody’s adds that Tanzania’s resource endowment, together with ongoing improvements in energy and transport infrastructure could lift growth above our baseline, gradually raising incomes and easing social pressures.
This potential for “upside risks” is contingent on the government continuing its reform agenda and “higher levels of foreign direct investment.”
The agency suggests that “stronger-than-expected revenue mobilization” and “higher-than-expected growth that supports higher household incomes” could even lead to a future rating upgrade.
A fortress in a volatile region
In comparison to the regional median, Tanzania’s economic resiliency score of ba3 stands as a testament to its superior shock-absorption capacity.
While social risks linked to rapid population growth and low incomes remain “a key credit weakness that reduces resilience to shocks and increases fiscal pressures,” the stable outlook reflects a credible expectation that investment-led growth and sustained external buffers will continue to offset these pressures.
As the global financial community looks toward the rest of 2026, Tanzania stands as a rare example of a sovereign that has turned crisis into a catalyst for institutional deepening.
The storms of the last five years have not weakened the Tanzanian house; they have merely proven that it was built on a solid ground.
For the technocrats in government, the message from the international markets is clear: the foundation is set, the rating is affirmed, and the path to a high-growth future is wide open.
