On this page
- Executive Summary
- Related: The Policy Gaps Keeping Dira 2050 Out of Reach
- 1. National Debt Stock: The Full Picture
- 2. External Debt: Creditors, Uses & Currency Mix
- 3. Domestic Debt: Instruments & Creditors
- 4. Debt Flows: Disbursements & Servicing
- 5. Debt Arrears
- 6. Debt Sustainability & Policy Outlook
- Muhtasari kwa Kiswahili
- Related TICGL Research
Executive Summary
- Tanzania's total national debt stock stood at approximately TZS 134.35 trillion at end-May 2026 (equivalent to USD 51,492.5 million), a marginal month-on-month decline on lower external and domestic debt.
- External debt dominates at TZS 95.10 trillion (70.8% of the total), while domestic debt stands at TZS 39.26 trillion (29.2%).
- Multilateral lenders remain the largest external creditor, holding TZS 54.65 trillion (57.5% of external debt), followed by commercial lenders at TZS 34.65 trillion (36.4%).
- The US dollar dominates currency exposure at roughly TZS 59.15 trillion (62.9%) of disbursed external debt, though its share has fallen from 66.6% a year earlier as the portfolio diversifies into Euro and Chinese Yuan-denominated debt.
- On the domestic side, commercial banks (TZS 11.15tn) and pension funds (TZS 10.44tn) are the two largest domestic creditors, together holding over half of domestic debt.
- Tanzania's debt stock is now roughly 2.16 times the size of the entire FY2026/27 national budget (TZS 62.33 trillion) — underscoring why the Government is tightening fiscal discipline, including cutting the Bank of Tanzania's overdraft ceiling from 18% to 14% of prior-year revenue.
- Debt arrears totalled TZS 4.93 trillion as of May 2026, dominated by commercial creditor arrears.
1. National Debt Stock: The Full Picture
Tanzania's national debt — the sum of public external debt, private sector external debt and Government domestic debt — stood at TZS 134.35 trillion at the end of May 2026, essentially flat versus April (TZS 134.32 trillion), as a decline in both external and domestic components offset new borrowing during the month. Of this, 70.8 percent (TZS 95.10 trillion) is external debt, and the remaining 29.2 percent (TZS 39.26 trillion) is domestic debt owed mainly to the local banking and pension system.
| Month | External Debt | Domestic Debt | Total Debt | External Share (%) |
|---|---|---|---|---|
| May 2025 | 90.20 | 35.50 | 125.70 | 71.8 |
| Aug 2025 | 86.25 | 37.31 | 123.56 | 69.8 |
| Nov 2025 | 85.59 | 38.36 | 123.96 | 69.1 |
| Feb 2026 | 91.08 | 38.78 | 129.87 | 70.1 |
| Apr 2026 | 94.99 | 39.34 | 134.32 | 70.7 |
| May 2026 | 95.10 | 39.26 | 134.35 | 70.8 |
The debt stock has grown by roughly TZS 8.65 trillion (6.9%) over the twelve months to May 2026, broadly tracking the pace of nominal GDP growth and consistent with the Government's Medium-Term Debt Management Strategy (2025/26–2027/28), which targets continued reliance on concessional and semi-concessional external financing alongside a deepening domestic securities market.
2. External Debt: Creditors, Uses of Funds & Currency Mix
Total external debt committed (disbursed plus undisbursed) stood at TZS 117.64 trillion at end-May 2026, of which TZS 94.03 trillion had actually been disbursed and TZS 23.60 trillion remained undisbursed — i.e. contracted but not yet drawn down, mostly for ongoing infrastructure and budget-support facilities.
| Creditor | TZS Trillion | Share (%) |
|---|---|---|
| Multilateral institutions | 54.65 | 57.5 |
| Commercial lenders | 34.65 | 36.4 |
| Bilateral creditors | 4.07 | 4.3 |
| Export credit agencies | 1.73 | 1.8 |
| Total external debt stock | 95.10 | 100.0 |
Where the money went: use of external funds
| Activity | TZS Trillion | Share (%) |
|---|---|---|
| Balance of payments & budget support | 20.54 | 21.8 |
| Transport & telecommunication | 20.52 | 21.8 |
| Social welfare & education | 17.87 | 19.0 |
| Energy & mining | 12.31 | 13.1 |
| Real estate & construction | 4.57 | 4.9 |
| Agriculture | 4.96 | 5.3 |
| Finance & insurance | 4.03 | 4.3 |
| Industries | 3.44 | 3.7 |
| Tourism | 1.61 | 1.7 |
| Other | 4.17 | 4.4 |
Balance-of-payments/budget support and transport & telecommunications together absorb over 43 percent of Tanzania's disbursed external debt, reflecting continued heavy investment in infrastructure and fiscal buffers. The US dollar remains the dominant currency at roughly 62.9 percent of disbursed debt (TZS 59.15 trillion), followed by the Euro (15.6%, TZS 14.67tn), Chinese Yuan (5.8%, TZS 5.45tn) and other currencies (15.6%, TZS 14.67tn) — a gradual diversification from 66.6 percent US dollar exposure a year earlier.
3. Domestic Debt: Instruments & Creditors
Tanzania's domestic debt stock (excluding liquidity papers) stood at TZS 39.26 trillion at end-May 2026, a slight decline from TZS 39.34 trillion in April, driven mainly by lower utilisation of the Government's overdraft facility with the Bank of Tanzania, which more than offset net new borrowing through Treasury bonds and bills.
| Instrument | TZS Trillion | Share (%) |
|---|---|---|
| Government bonds | 31.91 | 81.3 |
| Overdraft (non-securitized) | 5.65 | 14.4 |
| Treasury bills | 1.56 | 4.0 |
| Government stocks | 0.14 | 0.3 |
| Total domestic debt (excl. liquidity papers) | 39.26 | 100.0 |
| Creditor | TZS Trillion | Share (%) |
|---|---|---|
| Commercial banks | 11.15 | 28.4 |
| Pension funds | 10.44 | 26.6 |
| Bank of Tanzania | 7.46 | 19.0 |
| Others (public institutions, private companies, individuals, non-residents) | 7.38 | 18.8 |
| Insurance companies | 2.03 | 5.2 |
| BOT special funds | 0.80 | 2.0 |
Government bonds dominate the domestic instrument mix at 81.3 percent, reflecting the Government's continued preference for longer-dated domestic borrowing to manage refinancing risk. In May 2026, the Government raised TZS 0.28 trillion through new securities issuance (TZS 0.15 trillion Treasury bills, TZS 0.13 trillion Treasury bonds), while servicing TZS 0.37 trillion in domestic debt (TZS 0.11tn principal, TZS 0.26tn interest).
4. Debt Flows: Disbursements & Servicing
During May 2026, Tanzania received TZS 0.33 trillion in new external loan disbursements, mainly to the central government, against TZS 0.49 trillion in total external debt service payments — of which TZS 0.37 trillion was principal repayment and the remainder interest. This means gross external debt service outpaced new disbursements during the month, consistent with the small net decline observed in the external debt stock.
| Flow | Amount (TZS tn) |
|---|---|
| New loan disbursements | 0.33 |
| Total debt service paid | 0.49 |
| o/w Principal repayments | 0.37 |
| o/w Interest payments | 0.13 |
5. Debt Arrears
External debt arrears (overdue but unpaid amounts) totalled TZS 4.93 trillion at end-May 2026, comprising TZS 3.87 trillion in principal arrears and TZS 1.06 trillion in interest arrears. Commercial creditors account for the largest share of these arrears, consistent with their position as the second-largest external creditor group overall.
6. Debt Sustainability and Policy Outlook
Tanzania's total national debt of TZS 134.35 trillion is now roughly 2.16 times the size of the entire FY2026/27 national budget (TZS 62.33 trillion). While this ratio alone does not indicate distress — debt sustainability depends on debt-to-GDP, debt service-to-revenue, and the concessionality of the underlying loans — it underscores why fiscal discipline features prominently in this year's budget policy.
Key Policy Signals on Debt Management
The FY2026/27 budget explicitly caps the fiscal deficit at 3 percent of GDP and is financed 74.2 percent domestically, reducing reliance on new external borrowing. The Government is also amending the Bank of Tanzania Act (Cap. 197) to cut the Central Bank overdraft facility limit from 18 percent to 14 percent of the previous year's actual revenue — directly constraining a channel that has historically fed into the domestic debt stock (the "Overdraft" instrument, currently TZS 5.65 trillion, or 14.4% of domestic debt). Borrowing continues to be guided by the Medium-Term Debt Management Strategy (2025/26–2027/28), and multilateral concessional financing remains the anchor of the external portfolio at 57.5 percent of external debt.
Compared with regional peers, Tanzania's FY2026/27 fiscal deficit target of 2.9% of GDP is the most conservative in the East African Community (versus Kenya's 5.5%, Rwanda's 4.8% and Uganda's 6.9%) — a stance that should, over time, slow the pace of new borrowing relative to the size of the economy, provided domestic revenue mobilisation (targeted at 17.1% of GDP) is achieved.
Muhtasari kwa Kiswahili
Primary source: Bank of Tanzania, Monthly Economic Review, June 2026 (Table A10: National Debt Developments, and related tables), ISSN 0856-6844. All USD figures converted to TZS trillions by TICGL/TERI using the corresponding end-of-period exchange rate for each month; figures may not sum exactly due to rounding. Analysis by the Tanzania Economic Research Institute (TERI), a research arm of TICGL. Figures marked provisional/revised follow BOT convention. This page is for informational purposes and does not constitute investment advice.