Executive Summary

Tanzania's national debt stock stood at TZS 132.74 trillion (USD 50,595.8 million) at the end of June 2026, according to the Bank of Tanzania's (BOT) July 2026 Monthly Economic Review. Of this, external debt accounted for 70.4 percent (TZS 93.41 trillion) and domestic debt accounted for 29.6 percent (TZS 39.33 trillion).

External debt rose only marginally month-on-month (up 0.1 percent from May 2026), but continued a steep multi-year climb — from roughly TZS 46.8 trillion in June 2018 to over TZS 93 trillion in June 2026, more than doubling in eight years. Domestic debt has grown even faster in relative terms, tripling from TZS 13.2 trillion to TZS 39.3 trillion over the same period, with the Bank of Tanzania overdraft facility, commercial banks and pension funds as the dominant domestic creditors.

Multilateral institutions remain Tanzania's single largest external creditor group (59.3 percent of external debt), the US Dollar dominates currency exposure (66.2 percent), and Balance of Payments/budget support plus transport & telecommunication infrastructure together absorb over 44 percent of disbursed external debt. In June 2026 alone, the Government paid an estimated TZS 2.2 trillion in combined domestic and external debt service — a reminder of how much of each month's revenue effort goes toward servicing past borrowing rather than new development spending.

1. National Debt Overview — June 2026

All figures converted from BOT's USD-denominated debt tables using the end-June 2026 exchange rate of TZS 2,623.5 per USD, and presented in TZS trillions for clarity.

2. Debt Trend: 2018 – 2026

Tanzania's total national debt has more than doubled over the past eight fiscal years, rising from an estimated TZS 60.0 trillion in June 2018 to TZS 132.74 trillion in June 2026. Domestic debt has grown the fastest in percentage terms — nearly tripling — while external debt has roughly doubled, reflecting continued reliance on both concessional multilateral financing and an expanding domestic securities market.

Monthly Movement of Total National Debt (June 2025 – June 2026)

Zooming into the most recent 13 months shows a less linear picture: total debt fluctuated between roughly TZS 123.6 trillion and TZS 134.3 trillion, driven as much by shilling depreciation and cross-currency valuation effects as by new borrowing.

3. External Debt: Creditors, Currency & Use of Funds

External debt (public and private) stood at TZS 93.41 trillion (USD 35,606.1 million) at end June 2026 — a marginal 0.1 percent increase from May 2026. Central government accounted for 83.1 percent of this (TZS 77.68 trillion), while the private sector accounted for 16.9 percent (TZS 15.74 trillion). During the month, external loans disbursed totalled USD 379.8 million (~TZS 1.0 trillion), mainly to the central government, while external debt service payments totalled USD 249.2 million (~TZS 0.65 trillion), of which USD 184.9 million was principal.

3.1 External Debt by Creditor Category

3.2 External Debt by Currency

3.3 External Debt by Use of Funds

4. Domestic Debt: Instruments & Creditors

Government's domestic debt stock rose marginally to TZS 39.33 trillion at end June 2026, from TZS 39.26 trillion in May 2026. In June alone, the Government mobilised TZS 468 billion from the domestic market — TZS 273.3 billion in Treasury bonds and TZS 194.7 billion in Treasury bills — while domestic debt service payments totalled TZS 1.55 trillion (TZS 1.26 trillion principal, TZS 0.29 trillion interest).

4.1 Domestic Debt by Borrowing Instrument

4.2 Domestic Debt by Creditor Category

4.3 Domestic Debt Growth Trajectory, 2018–2026

5. Debt Service & New Borrowing (June 2026 Snapshot)

In effect, for every shilling of new external borrowing disbursed in June 2026, the Government paid out roughly the same amount servicing existing external debt — while domestic debt service alone (TZS 1.55 trillion) was more than three times the value of new domestic securities issued (TZS 468 billion) that month. This "rolling debt" dynamic is a key reason the domestic debt stock has grown steadily even without large net new financing every month.

6. Macroeconomic Context Behind the Debt Numbers

Debt does not move in isolation — it sits alongside growth, inflation and monetary policy. Key context from BOT's July 2026 review:

• Growth: Real GDP grew 6.0 percent in Q1 2026 (up from 4.3 percent a year earlier), with the Bank projecting 5.9 percent growth in Q2 2026 — growth that partly reflects continued public investment financed by borrowing.
• Inflation: Headline inflation eased slightly to 4.0 percent in June 2026 (from 4.2 percent in May), remaining within the national 3–5 percent target band, though core inflation rose to 3.7 percent — its highest contribution to headline inflation in two years.
• Monetary policy tightening: Following signs of broadening inflationary pressure, the Monetary Policy Committee raised the Central Bank Rate (CBR) from 5.75 percent to 6.25 percent for Q3 2026 (effective 2 July 2026) — a move that also raises the cost of new domestic government borrowing going forward.
• Reserves buffer: Gross official foreign exchange reserves stood at USD 5,673.5 million, covering 4.4 months of projected imports — above the 4-month national benchmark, providing some cushion for external debt service.
• Exchange rate: The shilling traded at an average of TZS 2,633.73/USD in June 2026, depreciating 0.08 percent year-on-year — modest, but a continued gradual drag on the TZS-equivalent cost of Tanzania's dollar-heavy external debt.

7. Risks & Outlook

For a broader assessment of how debt-financed public investment interacts with Tanzania's structural growth constraints and its Dira 2050 ambitions, see TICGL's related analysis on the policy gaps keeping USD 1 trillion out of reach by 2050 and whether Tanzania's economy is truly growing.

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