Tanzania's Economy Surges on Record Private Sector Credit and Stable Policy

Tanzania's economy is maintaining a robust upward trajectory, anchored by a historic surge in private sector credit, booming export sales, and heightened production and service activities. 

According to Bank of Tanzania (BoT) Governor, Emmanuel Tutuba, the national economy expanded by six percent in the first quarter of 2026, with an even stronger growth rate projected for the second and third quarters. 

This momentum is heavily supported by advancements in financial services, industrial manufacturing, infrastructure investments, and social services.

Zanzibar is echoing this national prosperity, having recorded a 6.7 percent economic growth rate in the first quarter of 2026, with expectations to exceed seven percent in the subsequent quarters, driven by thriving tourism, construction, and irrigation projects. 

A critical catalyst for this broader economic surge has been a record-breaking 32.5 percent growth in private sector credit over the past quarter. This historic liquidity injection is empowering businesses and diverse industries to scale operations, stimulate production, and drive overall economic expansion while the central bank maintains strict vigilance over inflation.

To sustain this balance, the BoT has opted to hold its central bank interest rate steady at 6.25 percent through December 2026, ensuring that economic activities continue to flourish without threatening the medium-term target of keeping inflation between three and five percent. 

Governor Tutuba emphasized that lowering the rate would have excessively flooded the market with liquidity and risked driving up inflation, whereas raising it would have choked money supply and hindered economic growth.

On the external front, strong export performance has successfully bolstered Tanzania's foreign exchange reserves to over six billion US dollars, providing adequate import cover for 4.3 months. Furthermore, as part of its reserve management under the Bank of Tanzania Act, the central bank has strategically sold five out of 35.4 tonnes of its accumulated national gold reserves, retaining 30.4 tonnes. 

Governor Tutuba noted that the BoT will continue to execute gold sales aligned with global market trends and expert financial analysis to optimize national reserves.