The African Development Bank (AfDB) has projected that Tanzania’s economy will grow by 5.4 percent in 2026, despite rising geopolitical tensions that are expected to increase energy and import costs across the region.The outlook suggests that Tanzania will remain one of East Africa’s stronger performing economies, with growth expected to improve to 6.1 percent in 2027, supported by infrastructure development, structural reforms, and gradual improvements in the business environment.However, the AfDB warns that several downside risks could affect this outlook.

These include ongoing geopolitical tensions in the Middle East that may push up global oil and food prices, disrupt supply chains, and increase trade costs.Climate change impacts and lingering socio-political challenges are also identified as additional risks that could slow economic momentum.The projection is slightly lower than estimates from other institutions.The International Monetary Fund (IMF) expects Tanzania to grow by 5.9 percent in 2026, while the World Bank forecasts around 6.2 percent.The Bank of Tanzania is even more optimistic, pointing to high-frequency indicators suggesting growth above 6 percent in the near term.

Regionally, East Africa is still expected to be Africa’s fastest-growing area, led by Uganda, Rwanda, Kenya, and Burundi, though overall momentum is expected to slow slightly before recovering in 2027.Uganda leads projections due to oil production expansion, while Rwanda shows strong growth despite regional security risks.Kenya’s growth remains moderate due to high energy costs.At a continental level, Africa is projected to grow by 4.2 percent in 2026.The AfDB also highlights a major financing gap of over $1.

3 trillion annually needed to achieve development goals, while suggesting that improved tax collection, investment efficiency, and public-private partnerships could unlock significant untapped financial resources across the continent.