(Dar es Salaam) – Tanzania’s improved credit ratings from Moody’s and Fitch highlight the country’s growing economic stability, positioning it as a leader in East Africa.
Tanzania has made significant progress in improving its creditworthiness, with new ratings from Moody’s Investors Service and Fitch Ratings reflecting the country’s robust economic management and growth. Moody’s has rated Tanzania at B1, while Fitch has awarded the country a B+ rating. These ratings place Tanzania ahead of other East African nations, such as Kenya, Uganda, and Rwanda.
According to financial analysts, these improved credit ratings are indicative of effective financial governance and stable economic growth, particularly in the Southern African region. The upgraded ratings come as a result of Tanzania’s sound fiscal policies and ongoing infrastructure projects aimed at boosting the country’s economic potential.
Speaking to Parliament on November 1, 2024, Minister of Finance Dr. Mwigulu Nchemba revealed that Tanzania’s national debt had reached 96.88 trillion Tanzanian shillings by June 2024, with external debt amounting to 64.93 trillion shillings and domestic debt standing at 31.95 trillion shillings. Despite this significant debt, Tanzania’s debt levels remain within internationally acceptable thresholds, according to resilience assessments.
“The positive credit ratings from Moody’s and Fitch are a testament to the government’s efforts to grow the economy and strengthen the financial environment,” said Dr. Nchemba.
Moody’s rating for Tanzania aligns with the ratings of other African countries with strong economic growth, such as Namibia, Benin, and Senegal, all of which have been rated B1. This positions Tanzania among the top five economies in Sub-Saharan Africa, trailing only Botswana (A3), Mauritius (Baa3), Côte d’Ivoire (Ba2), and South Africa (Ba2).
In East Africa, Tanzania leads in economic stability, outpacing neighboring countries such as Kenya (B3), Uganda (B2), and Rwanda (B2). Within the Southern African Development Community (SADC), Tanzania holds a strong position alongside Namibia with a B1 rating, surpassing other regional neighbors.
Dr. Nchemba highlighted the role of structural reforms in key sectors that have strengthened Tanzania’s business environment, making it more attractive for foreign investment. “We have implemented reforms that facilitate business, attract foreign direct investment, and increase private sector participation in key sectors,” he explained.
The Ministry of Finance has also prioritized improving public financial management, tax collection, and transparency, all of which are reflected in Tanzania’s positive credit ratings from Moody’s.
Additionally, the government’s commitment to advancing large-scale infrastructure projects, such as the Julius Nyerere Hydropower Dam and the Standard Gauge Railway (SGR), has contributed to creating a more conducive environment for economic activities.
Speaking to The Citizen, senior financial analyst Dr. Thobias Swai noted that the new credit ratings reflect the government’s effective financial management. He pointed out that Tanzania is now able to borrow on favorable terms, and if current policies continue, the country’s long-term economic outlook remains positive.
“However, it is essential to continue efforts to improve tax revenue collection, increase exports, and invest in critical sectors that drive economic growth,” Dr. Swai emphasized.
He also stressed the importance of improving infrastructure and connecting it with productive sectors to further boost Tanzania’s economic development. “Solid financial management and public expenditure control are key to maintaining this positive trajectory,” he added, noting that favorable credit ratings also enhance the country’s reputation and attract more business and investment.
Dr. Wilhelm Ngasamiaku, an economist at the University of Dar es Salaam (UDSM), explained that the new ratings indicate that Tanzania’s economy is performing well in key economic indicators such as Gross Domestic Product (GDP) growth, inflation, current account balance, and debt sustainability.
“This has the potential to attract foreign direct investment (FDIs) and increase foreign capital in the country, as a strong economy has the ability to repay loans on favorable terms,” said Dr. Ngasamiaku.
He also noted that favorable credit ratings can help increase foreign exchange reserves and strengthen the value of the national currency. Good credit ratings encourage international organizations to establish operations in countries with solid economies and business-friendly environments.
Dr. Lutengano Mwinuka, an agricultural business economist at the University of Dodoma (UDOM), added that credit rating agencies provide forward-looking assessments, which benefit the country and its funding sources. “The credit rating Tanzania has received reflects the stability of various sectors and the overall performance of the economy. This is important because the country has experienced steady economic growth driven by key sectors,” Dr. Mwinuka said.