Moody’s upgrades Tanzania

Moody's Ratings said it upgraded the government of Tanzania's long-term issuer ratings to B1 from B2 and changed the outlook to stable from positive.

“Tanzania's rating is underpinned by its economic resilience amid pandemic, inflationary, and global liquidity shocks since 2020. Real GDP growth averaged 6% from 2015 to 2022, bolstered by growth across diverse sectors like agriculture, tourism, mining, and construction.

“Despite a dip in the tourism sector during the pandemic – a key source of foreign exchange generation –– a rise in gold exports partially offset these losses and demonstrated resilience in the export base. Exports have rebounded since 2020, driven by a resurgence in tourism, increased gold production, and growth in the agriculture and logistics sectors,” the agency said in a press release.

Also helping Tanzania is that inflation has been low and stable since 2020 and the country produces a large of its food supply. However, the country suffers from a high poverty rate, a poorly educated population and poor health outcomes.

“The stable outlook reflects the balance of risks. To the upside, continued reform momentum that sees significant improvement in administrative capacity and policy coordination to implement regulatory reforms and improve bureaucratic functioning would support higher competitiveness, investment, growth, incomes and exports. Conversely, a continued deterioration in the current account balance and difficulties sourcing foreign currency increases the potential for external imbalances and weighs on economic activity,” Moody’s said.

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