Dar es Salaam — Tanzania has been identified as one of the few oil-importing African economies with enough fiscal room to cushion households and businesses from rising energy costs, as global fuel shocks continue to threaten growth across the continent.
According to the latest International Monetary Fund (IMF) Regional Economic Outlook for Sub-Saharan Africa, countries that depend on imported fuel are facing higher transport, electricity, and food costs after renewed tensions in the Middle East pushed up oil, gas, and fertilizer prices.
The report warns that the shock is slowing economic growth and increasing inflation risks for many nations in the region.
For Tanzania, however, the IMF says stronger public finances provide an opportunity to act decisively. The institution recommends that oil-importing countries with greater fiscal space, “such as Rwanda and Tanzania,” should use targeted and temporary support measures to protect vulnerable citizens while preserving spending on development priorities.
Starting in April this year, Tanzanians began feeling the effects of the Middle East escalation that started in early March, as pump prices surged by 30 percent. The increase quickly triggered higher transport costs and added pressure on household budgets.
The country consumes approximately 15 million litres of fuel per day, including 6,176,889 litres of petrol, 8,274,703 litres of diesel, 592,651 litres of Jet A-1, and 10,326 litres of kerosene — all of which must be imported.
READ MORE: Fuel Crisis Could Push Tanzania to the Brink if Middle East War Drags On, Warns Industry Chief
In late March 2026, The Chanzo spoke with Raphael Mgaya, Executive Director of the Tanzania Association of Oil Marketing Companies (TAOMAC), who warned that the Middle East escalation could push Tanzania’s economy to the brink. However, he expressed confidence in the government’s flexibility, suggesting immediate measures such as reducing fuel taxes, introducing rationing, and providing subsidies.
The IMF, however, cautions that broad fuel subsidies or price controls should be avoided because they are costly and difficult to reverse. Instead, any relief should be well targeted and time-bound, focusing on low-income households and productive sectors most affected by rising costs.
“Targeted time-bound transfers and scalable, adaptive social protection [are needed] to cushion the vulnerable population from higher living costs while protecting priority spending,” the report states.
Some Members of Parliament and the main opposition party, CHADEMA, have called on the government to reduce fuel levies in order to ease rising prices. On April 8, 2028, civil society groups, including the Legal and Human Rights Centre(LHRC), urged the government to cut taxes and levies by up to 50 percent per litre through an emergency amendment to the Finance Act to lessen the impact of higher global oil prices.
READ MORE: Tanzania’s Opposition Demands Immediate Tax Relief as Fuel Crisis Deepens
The government has acknowledged the economic shock and outlined a strategy focused on boosting mining revenues and tightening public expenditure. The Ministry of Energy also announced measures to curb hoarding and speculation by traders seeking to profit from the crisis. President Samia Suluhu Hassan further announced fuel-saving measures across the government, starting with her office, including reducing the size of official vehicle convoys during her travels around the country.
Tanzania’s economy has remained one of the stronger performers in East Africa, supported by a recovery in tourism, mining, agriculture, and public investment. However, rising energy prices could increase production costs for factories, weaken household purchasing power, and widen the import bill if no action is taken.
According to the report, Tanzania’s growth is projected at 5.9 percent in 2026, following a strong 2025 despite concerns raised by violence linked to the October elections. Tanzania’s growth is expected to trail regional peers Uganda and Rwanda, whose economies are projected to expand by 7.5 percent and 7.2 percent respectively.
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Even so, Tanzania is emerging as one of East Africa’s stronger economic prospects, with the IMF identifying it among countries with relatively greater fiscal space and solid medium-term potential compared with several regional partners facing higher inflation, debt pressure, or external shocks.
According to the IMF, Sub-Saharan Africa’s regional growth is expected to reach 4.3 percent in 2026, 0.3 percentage points lower than the pre-war forecast, with significant differences across countries. Oil-importing, non-resource-rich economies face worsening trade balances and higher living costs, while oil exporters stand to benefit from stronger export revenues but remain exposed to volatility and procyclical policy risks.
