Executive Summary
Government's domestic debt stock rose marginally to TZS 39,325.85 billion at the end of June 2026, up from TZS 39,257.3 billion in May 2026 and roughly triple the TZS 13,228.2 billion recorded in June 2018. Unlike external debt — which is dominated by multilateral and bilateral development partners — domestic debt is financed almost entirely by Tanzanian financial institutions and the Bank of Tanzania itself.
Commercial banks are the single largest creditor group, holding 28.8 percent (TZS 11,320.8 billion) of the domestic debt stock in June 2026, followed closely by pension funds at 26.4 percent (TZS 10,399.0 billion). The Bank of Tanzania itself holds 18.3 percent (TZS 7,197.1 billion) — largely through the overdraft facility extended to government — while insurance companies and BOT's special funds together add a further 7.2 percent. The remaining 19.2 percent sits with "other" holders: public institutions, private companies, individuals, and non-resident investors.
By instrument, government securities — dominated by Treasury bonds — account for 84.7 percent of the stock, with the government's overdraft facility with the central bank making up nearly all of the remaining 15.3 percent. This page walks through each of these breakdowns in detail, with the full underlying data tables from the Bank of Tanzania's July 2026 Monthly Economic Review.
Companion analysis: Tanzania's External Debt, Decoded
This page covers domestic debt. For the external side of Tanzania's national debt position — by borrower, creditor, currency and use of funds — read our companion analysis.
Government Domestic Debt by Creditor Category
Six categories of creditor hold Tanzania's government domestic debt. Commercial banks lead the field, edging up from 28.4 percent in May 2026 to 28.8 percent in June — the highest reading of the past year — as banks continue to treat government securities as a core, low-risk, liquid asset. Pension funds sit close behind at 26.4 percent, having eased slightly from a 26.6 percent peak in May, reflecting their structural role as long-duration buyers of Treasury bonds matched against long-term pension liabilities.
The Bank of Tanzania's own exposure — chiefly the overdraft facility used to smooth government cash-flow timing — has been trending down, from 20.2 percent in June 2025 to 18.3 percent in June 2026, even as the absolute overdraft balance rose (see the instrument breakdown below). Insurance companies hold a stable 5.1 percent, and BOT's special funds a small but rising 2.1 percent. The fastest-growing bucket is "Others" — public institutions, private companies, individuals and non-residents — up from 18.1 percent to 19.2 percent over the year, pointing to broadening retail and institutional participation in government securities.
Domestic Debt by Creditor Category, June 2026
Domestic Debt by Creditor Category, June 2026
| Creditor Category | Jun-25 | Share % | May-26 | Share % | Jun-26 | Share % |
|---|---|---|---|---|---|---|
| Commercial banks | 10,161.5 | 28.6 | 11,149.8 | 28.4 | 11,320.8 | 28.8 |
| Pension funds | 9,265.7 | 26.1 | 10,441.4 | 26.6 | 10,399.0 | 26.4 |
| Bank of Tanzania | 7,174.1 | 20.2 | 7,455.1 | 19.0 | 7,197.1 | 18.3 |
| Others (public institutions, private companies, individuals, non-residents) | 6,420.4 | 18.1 | 7,381.7 | 18.8 | 7,547.4 | 19.2 |
| Insurance | 1,843.0 | 5.2 | 2,030.7 | 5.2 | 2,022.8 | 5.1 |
| BOT's special funds | 638.1 | 1.8 | 798.4 | 2.0 | 838.6 | 2.1 |
| Domestic debt stock (excl. liquidity papers) | 35,502.8 | 100.0 | 39,257.3 | 100.0 | 39,325.8 | 100.0 |
Source: Ministry of Finance and Bank of Tanzania, Table 2.7.6, BOT Monthly Economic Review, July 2026.
Banks remain the anchor creditor
At 28.8 percent, commercial banks hold more government debt than any other single category — a reminder that bank balance sheets and sovereign risk are closely intertwined in Tanzania.
Pension funds are near-equal partners
Pension funds' 26.4 percent share means retirement savings are a major, structurally stable source of government financing — but also ties pension solvency to sovereign credit quality.
BOT's direct exposure is easing — in share terms
The central bank's share has fallen almost two full percentage points year-on-year, even though its overdraft balance in absolute terms has grown (see Table 2 below).
Creditor Mix: How It Has Shifted
Viewed as a 12-month trend, three patterns stand out: commercial banks' share has been the most volatile but ends the period at its highest point; the Bank of Tanzania's share has declined steadily; and the "Others" category has grown the most consistently, suggesting government securities are reaching an increasingly diverse investor base beyond the traditional banking and pension sector.
Creditor Category Share Trend (%)
Creditor Holdings, Stacked View (TZS Billions)
Domestic Debt by Borrowing Instrument
Alongside who holds the debt, it is worth seeing how it was raised. Government securities — Treasury bonds, Treasury bills, government stocks and tax certificates combined — made up 84.7 percent of the domestic debt stock in June 2026, with Government bonds alone accounting for 79.9 percent, confirming that Tanzania's domestic debt is overwhelmingly long-duration and market-based rather than short-term. The remaining 15.3 percent is non-securitized debt, almost entirely the overdraft facility with the Bank of Tanzania (TZS 6,011.4 billion in June 2026, up from TZS 5,314.0 billion a year earlier).
Domestic Debt by Instrument, June 2026
Instrument Mix Trend (%)
| Instrument | Jun-25 | Share % | May-26 | Share % | Jun-26 | Share % |
|---|---|---|---|---|---|---|
| Government securities | 30,170.4 | 85.0 | 33,610.9 | 85.6 | 33,314.4 | 84.7 |
| — Treasury bills | 2,001.3 | 5.6 | 1,562.8 | 4.0 | 1,757.5 | 4.5 |
| — Government stocks | 187.1 | 0.5 | 135.7 | 0.3 | 135.7 | 0.3 |
| — Government bonds | 27,982.0 | 78.8 | 31,912.3 | 81.3 | 31,421.2 | 79.9 |
| — Tax certificates | 0.1 | 0.0 | 0.1 | 0.0 | 0.1 | 0.0 |
| Non-securitized debt | 5,332.4 | 15.0 | 5,646.4 | 14.4 | 6,011.4 | 15.3 |
| — Overdraft (with Bank of Tanzania) | 5,314.0 | 15.0 | 5,646.4 | 14.4 | 6,011.4 | 15.3 |
| — Other liabilities | 18.4 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 |
| Domestic debt stock (excl. liquidity papers) | 35,502.8 | 100.0 | 39,257.3 | 100.0 | 39,325.8 | 100.0 |
Source: Ministry of Finance and Bank of Tanzania, Table 2.7.5, BOT Monthly Economic Review, July 2026.
Eight-Year Growth of Domestic Debt, 2018–2026
Tanzania's domestic debt stock has nearly tripled since June 2018, rising from TZS 13,228.2 billion to TZS 39,325.8 billion in June 2026. Growth accelerated sharply between June 2020 and June 2023 — a period that coincided with pandemic-related fiscal pressure and a deliberate policy shift toward deepening the domestic securities market — before moderating to single-digit annual growth over the past two years.
Government Domestic Debt Stock, June 2018 – June 2026
| Period | Jun-18 | Jun-19 | Jun-20 | Jun-21 | Jun-22 | Jun-23 | Jun-24 | Jun-25 | May-26 | Jun-26 |
|---|---|---|---|---|---|---|---|---|---|---|
| Domestic debt stock | 13,228.2 | 14,863.1 | 15,587.7 | 18,934.3 | 24,039.8 | 28,927.1 | 31,938.2 | 35,502.8 | 39,257.3 | 39,325.8 |
Source: Ministry of Finance, Chart 2.7.1, BOT Monthly Economic Review, July 2026.
June 2026 Financing Activity
In June 2026 alone, government mobilised TZS 468 billion from the domestic market through new security issuance — TZS 273.3 billion in Treasury bonds and TZS 194.7 billion in Treasury bills. Against this, domestic debt service payments totalled TZS 1,551.5 billion, comprising TZS 1,264.4 billion in principal repayments and TZS 287.1 billion in interest — a reminder that gross issuance each month is substantially smaller than the roll-over and interest burden the stock already carries.
New issuance, June 2026
TZS 468.0 billion raised: TZS 273.3bn in Treasury bonds (58.4%) and TZS 194.7bn in Treasury bills (41.6%).
Debt service, June 2026
TZS 1,551.5 billion paid out: TZS 1,264.4bn principal (81.5%) and TZS 287.1bn interest (18.5%).
Net financing gap
Debt service outpaced new issuance by more than 3-to-1 in June — the difference is met through the stock of outstanding securities rolling over and the overdraft facility.
What This Means for Banks, Pension Funds & Policy
Watch for crowding-out signals
With commercial banks holding 28.8 percent of government debt, sustained heavy issuance could compete with credit to the private sector for balance-sheet space — worth monitoring alongside the 28.1 percent private-sector credit growth reported for June 2026.
Pension fund concentration risk
Pension funds' 26.4 percent exposure to government paper means fund solvency and sovereign credit risk are closely linked — a standard feature of frontier markets, but one that merits ongoing asset-liability monitoring.
Diversifying the investor base is a positive sign
The rising "Others" category (19.2 percent, including non-residents) suggests Tanzania's domestic securities market is broadening beyond banks and pension funds — generally a healthy sign for market depth and liquidity.
Overdraft reliance bears watching
The BOT overdraft facility grew from TZS 5,314.0bn to TZS 6,011.4bn year-on-year — a short-term liquidity tool, but one whose growing absolute size is worth tracking against statutory limits.
Long-duration financing dominates
With Treasury bonds at 79.9 percent of the stock, government has locked in long-term financing terms, reducing near-term rollover risk relative to a bill-heavy structure.
Steady long-run growth, moderating pace
After a rapid build-up from 2020–2023, domestic debt growth has slowed to low single digits over the past year — a signal of increasing fiscal discipline on the domestic financing side.