The International Monetary Fund (IMF) has acknowledged Tanzania’s resilient economic growth while emphasising the need for continued reforms to safeguard long-term stability and inclusive development.
In a statement released following a staff mission to the country between 17 and 24 September, the IMF team led by Nicolas Blancher observed that the Tanzanian economy expanded by 5.4 percent in the first quarter of 2025. Growth was driven by robust output in mining, agriculture, and manufacturing, underscoring the country’s diversified productive base within the East African Community.
Inflation was contained at 3.4 percent in August 2025, aligning with the Bank of Tanzania’s target range of 3–5 percent. This indicates relative macroeconomic stability despite global headwinds affecting commodity markets and trade flows across Africa.
The Fund noted that fiscal consolidation had been temporarily paused in the 2024/2025 financial year to accommodate higher spending in critical sectors such as education and health, as well as to address domestic arrears and mitigate the impact of declining external aid. The mission stressed that steadfast implementation of the 2025/2026 budget would be pivotal to ensuring debt sustainability and expanding fiscal space for investment in social sectors.
On monetary policy, the IMF welcomed the Bank of Tanzania’s decision to lower the central bank rate to 5.75 percent, a move intended to stimulate growth. The Fund, however, encouraged greater exchange rate flexibility to enhance the functioning of the interbank foreign exchange market and to bolster resilience against external shocks.
Tanzania’s external position has also improved. The current account deficit narrowed to 2.5 percent of GDP in the 2024/2025 financial year, supported by stronger export performance in minerals, agricultural produce, and tourism, alongside reduced oil import costs. As of July 2025, foreign reserves stood at 6.2 billion US dollars, sufficient to cover approximately four months of projected imports, in line with regional benchmarks for external adequacy.
Looking ahead, the IMF highlighted the importance of structural reforms aligned with Tanzania’s National Development Vision 2050. These reforms prioritise strengthening education and healthcare provision for the country’s youthful population, advancing private sector-led growth and job creation, and addressing the risks posed by climate change. The mission also underscored the role of international support mechanisms such as the Resilience and Sustainability Facility in facilitating adaptation and sustainable growth strategies.
Tanzania’s economic trajectory is widely viewed as reflective of broader African dynamics, where balancing fiscal prudence with developmental imperatives remains a central policy challenge. The IMF’s observations underscore the importance of reforms that go beyond orthodox macroeconomic stabilisation to embrace more inclusive and context-specific pathways to growth.
