Strong economy signals stability

DAR ES SALAAM: TANZANIA’S economy continues to demonstrate impressive resilience, defined by accelerating GDP growth, sub-target inflation, expanding manufacturing output, and upgraded sovereign credit assessments.

As top-line stability firms up, the country’s development trajectory is increasingly focused on translating these macroeconomic gains into expanded formal employment, rising real incomes, and higher living standards across the board.

For instance, Mainland Tanzania’s real gross domestic product (GDP) grew by 5.9 per cent in 2025, up from 5.6 per cent in 2024, according to the National Bureau of Statistics (NBS) series based on constant 2019 market prices.

This extended a recovery from growth of 4.6 per cent in 2022, following 4.9 per cent in 2021.

The figures point to solid economic momentum, even after the disruption surrounding the October 2025 elections. Sectoral performance reveals a widening array of growth drivers, a key factor for investors assessing structural stability.

Finance and insurance expanded by 15.7 per cent in 2025, electricity by 11.8 per cent and mining and quarrying by 9.4 per cent. Information and communication grew by 8.8 per cent, while transport and storage increased by 8.0 per cent.

Agriculture, however, remained central to the economy, accounting for 24.3 per cent of GDP in the earlier NBS sectoral estimates examined for this assessment.

Its importance was also evident in the second quarter of 2026, when agricultural growth reached 19.2 per cent.

Finance and insurance grew by 16.7 per cent, while construction and manufacturing expanded by 9.0 per cent and 6.6 per cent respectively.

These figures show that growth is not confined to a single sector, another important credit for the country as the mix matters for investors.

Expansion in finance, infrastructure and communications provide investment potential to support business activity across the economy, while agriculture and manufacturing offer scope to increase domestic value addition and employment. Industrial production data reinforce that distinction.

The NBS Index of Industrial Production rose by 2.6 per cent year-on-year in the first quarter of 2026.

Manufacturing increased by 4.8 per cent and electricity supply by 6.3 per cent, but mining and quarrying contracted by 4.2 per cent.

The overall industrial production index also fell by 3.6 per cent between the fourth quarter of 2025 and the first quarter of 2026. Manufacturing performance varied widely.

Production of fabricated metal products, basic metals, and rubber and plastics increased, while electrical equipment, pharmaceuticals and paper products declined.

Macroeconomic stability remains an important asset, providing another positive indicator.

Inflation stood at 4.3 per cent in September 2026, within the Bank of Tanzania’s target range of 3–5 per cent.

The central bank maintained its benchmark Central Bank Rate at 6.25 per cent for the fourth quarter.

Contained inflation help to make costs more predictable for businesses and helps protect household budgets from sharper price increases.

Employment up An analysis by Tanzania Investment and Consultant Group Limited (TICGL) indicates that formal employment increased by 9.6 per cent, from 3.72 million workers to 4.07 million in 2023/24.

Average wages rose by about 70 per cent over four years, from 393,861/- to 609,354/-.

TICGL estimates that 71.8 per cent of the workforce and that is about 25.95 million people remains in informal employment, where access to social protection and secure earnings is often limited.

International credit assessments provide clear validation of Tanzania’s positive economic trajectory.

In August 2026, Fitch Ratings upgraded Tanzania’s sovereign outlook from stable to positive while affirming its B+ rating, citing robust foreign-exchange reserves, disciplined fiscal management, and sustained economic growth.

This followed Moody’s Ratings’ affirmation of Tanzania’s B1 rating with a stable outlook in February 2026, underlining the nation’s underlying stability and economic resilience.

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Fitch’s positive outlook reflects strong confidence in the government’s strategic direction.

The rating agency commended the country’s improving macroeconomic indicators, ongoing revenue mobilisation efforts and proactive measures to build buffer against global economic shocks.

The administration’s fiscal reforms are already bearing fruit. Public revenue collection has expanded steadily, with Fitch reporting a rise in tax revenue to 15.6 per cent of GDP in FY 2024/25, up from 14.6 per cent in 2022/23.

Looking ahead, government debt relative to GDP is projected to decline, underscoring sound fiscal governance and prudent public investment aimed at expanding productive capacity across key sectors.

Tanzania’s external position remains solid and well managed.

With the currentaccount deficit narrowing to a manageable 2.5 per cent of GDP, foreign-exchange earnings and strategic inflows continue to comfortably cover external receipts and payments.

This stability highlights the growing strength of Tanzania’s export sector, high-quality public investments and enhanced resilience in the global marketplace.

The positive revision of Tanzania’s credit outlook by Fitch, alongside low inflation and accelerating GDP growth, provides a solid launchpad for the economy.

There is growing confidence that these headline gains will continue to catalyse broader industrial expansion, enhance labour productivity, and deliver meaningful gains in real incomes.

As GDP growth continues to cross the 6 per cent threshold, the economy is well positioned to expand formal productive capacity, strengthen export competitiveness and drive sustained household prosperity confirming that macroeconomic stability is successfully underpinning Tanzania’s long-term economic transformation.