Prepared by TERI for research and strategic-information purposes only; it is not investment, legal, tax or financial advice. Figures are from the Bank of Tanzania and the Ministry of Finance; August 2026 data are provisional. Growth rates, contributions and shares combined across categories are TERI calculations from published figures. The "others" category includes public institutions, private companies, individuals and non-residents, and is not broken down further in the source.
01 — OverviewExecutive Summary
The Government's domestic debt stock increased by 3.6% during August 2026 to TZS 40,899.5 billion, driven mainly by Treasury bond issuance. Over six years the stock has grown from TZS 15,163.3 billion in August 2020, a 2.7-fold rise, or about 18% a year (TERI calculation). Commercial banks and pension funds continue to hold the largest shares.
Domestic debt is increasingly a pension-fund and "others" story. Of the TZS 1,427.3 billion added in August, pension funds supplied TZS 801.1 billion and "others" TZS 241.8 billion, while commercial banks added only TZS 148.7 billion. Over the year the fastest-growing holders were "others" (+18.5%) and pension funds (+11.6%), while the Bank of Tanzania's holdings were flat. (All TERI calculations.)
1. Government Domestic Debt by Creditor Category
| Creditor (TZS billion) | Aug 2025 | Share | Jul 2026 | Share | Aug 2026 | Share | y/y |
|---|---|---|---|---|---|---|---|
| Commercial banks | 10,558.3 | 28.3% | 11,450.6 | 29.0% | 11,599.3 | 28.4% | +9.9% |
| Pension funds | 10,116.5 | 27.1% | 10,491.4 | 26.6% | 11,292.5 | 27.6% | +11.6% |
| Bank of Tanzania | 7,052.2 | 18.9% | 6,819.7 | 17.3% | 7,054.9 | 17.2% | +0.0% |
| Insurance | 2,001.9 | 5.4% | 2,063.0 | 5.2% | 2,050.4 | 5.0% | +2.4% |
| BoT special funds | 799.3 | 2.1% | 854.6 | 2.2% | 867.6 | 2.1% | +8.5% |
| Others | 6,781.7 | 18.2% | 7,792.9 | 19.7% | 8,034.7 | 19.6% | +18.5% |
| Domestic debt stock | 37,309.8 | 100% | 39,472.2 | 100% | 40,899.5 | 100% | +9.6% |
Source: Bank of Tanzania, Table 2.6.6; shares as published and may not sum to exactly 100%. Year-on-year changes are TERI calculations.
Creditor Shares, August 2026
Holdings by Creditor
1.1 What each creditor group tells us
- Commercial banks (28.4%): the largest holder. Banks held TZS 11,718.3 billion in securities in August, up 40.3% y/y, even as credit to the private sector grew 33.0%.
- Pension funds (27.6%): long-horizon investors anchoring demand for 15- to 25-year bonds. Their share rose from 27.1% a year ago.
- Bank of Tanzania (17.2%): down from 18.9% in share terms; holdings were unchanged at about TZS 7,053 billion over the year.
- Insurance (5.0%) and BoT special funds (2.1%): small, slow-growing holders.
- Others (19.6%): the fastest-growing group at +18.5% y/y, covering public institutions, private companies, individuals and non-residents.
02 — DriversWho Financed the August Increase?
Domestic debt rose TZS 1,427.3 billion between July and August 2026. The contribution by creditor shows how concentrated the financing was.
| Creditor | Change m/m (TZS bn) | Growth m/m | Share of increase |
|---|---|---|---|
| Pension funds | +801.1 | +7.6% | 56.1% |
| Others | +241.8 | +3.1% | 16.9% |
| Bank of Tanzania | +235.2 | +3.4% | 16.5% |
| Commercial banks | +148.7 | +1.3% | 10.4% |
| BoT special funds | +13.0 | +1.5% | 0.9% |
| Insurance | −12.6 | −0.6% | −0.9% |
| Total | +1,427.3 | +3.6% | 100% |
Source: TERI calculations from Table 2.6.6.
Government Domestic Debt Stock
Contribution to the August Increase
The BoT's holdings rose TZS 235.2 billion in the month after falling in prior months, and overdraft rose to TZS 4,176.9 billion from TZS 3,941.6 billion (10.2% of the stock). The source does not state the creditor of the overdraft, so the link to central bank financing should be confirmed against the Ministry of Finance data.
03 — InstrumentsHow the Debt Is Structured
Government securities are 89.8% of the stock. Treasury bonds alone are TZS 34,793.4 billion (85.1%), up from 79.9% a year ago, while Treasury bills have fallen to 4.4% from 5.6%. Non-securitised debt, which is the overdraft, declined from 14.1% to 10.2% of the stock over the year, shifting financing toward longer-dated market instruments.
| Instrument (TZS billion) | Aug 2025 | Share | Jul 2026 | Aug 2026 | Share |
|---|---|---|---|---|---|
| Government securities | 32,048.0 | 85.8% | 35,530.5 | 36,722.5 | 89.8% |
| Treasury bonds | 29,836.5 | 79.9% | 33,615.9 | 34,793.4 | 85.1% |
| Treasury bills | 2,075.7 | 5.6% | 1,778.7 | 1,793.4 | 4.4% |
| Government stocks | 135.7 | 0.4% | 135.7 | 135.7 | 0.3% |
| Non-securitised debt (overdraft) | 5,261.8 | 14.2% | 3,941.7 | 4,176.9 | 10.2% |
| Domestic debt stock | 37,309.8 | 100% | 39,472.2 | 40,899.5 | 100% |
Source: Bank of Tanzania, Table 2.6.5. Non-securitised debt includes overdraft (TZS 5,243.4bn in Aug 2025) and minor other liabilities.
Instrument Shares of Domestic Debt
04 — Financing & ServiceIssuance, Auctions and Debt Service
In August 2026 the Government raised TZS 632.5 billion from the domestic market to finance development projects: TZS 178.1 billion in Treasury bills and TZS 454.4 billion in Treasury bonds. Domestic debt service amounted to TZS 633.4 billion, of which TZS 163.5 billion was principal and TZS 469.9 billion interest, so the month's financing was almost entirely consumed by servicing (TERI observation).
Government Securities Issued for Financing
| Auction results, August 2026 | Tender (TZS bn) | Bids (TZS bn) | Bid-to-cover | Accepted (TZS bn) |
|---|---|---|---|---|
| Treasury bills (two auctions) | 580.0 | 981.7 | 1.7 | 520.8 |
| 15- and 25-year bonds | 621.5 | 2,136.3 | 3.4 | 595.4 |
Auction amounts include liquidity management and differ from the TZS 632.5bn issued for financing. The weighted average T-bill yield rose to 4.86% from 4.74%; the 25-year bond yield fell to 11.48% from 11.89% and the 15-year yield rose to 10.55% from 10.39%.
05 — AnalysisWhat the Creditor Mix Means
- Crowding-out risk is limited so far: private credit grew 33.0%, faster than domestic debt at 9.6%, but banks' securities holdings grew 40.3%, so government paper competes for bank balance sheets.
- Pension funds are structural buyers, supporting long maturities. Their growing role ties public debt to workers' retirement savings, so debt sustainability matters for pensioners.
- Demand is strong: a bond bid-to-cover of 3.4 shows investors can absorb larger issuance without yield pressure.
- Interest costs: TZS 469.9 billion of interest in one month, with 10- to 25-year yields of 10.9% to 11.5%.
- Concentration: banks and pension funds together hold 56.0%, so stress in either sector would transmit to government financing.
- Rollover: 85.1% bond share means large future redemptions; the maturity profile is not in this report.
06 — RecommendationsPolicy Recommendations
1. Broaden the investor base
- Expand retail and non-resident participation in government securities.
- Publish a detailed breakdown of the "others" category (19.6%).
2. Protect private-sector credit
- Monitor banks' securities holdings against lending to SMEs and manufacturing.
- Pace bond issuance with the interest-rate cycle.
3. Manage rollover and cost
- Publish the maturity profile and a redemption calendar.
- Set limits on interest costs relative to revenue.
4. For investors and institutions
- Pension funds and banks can use 25-year yields near 11.5% as a long-dated benchmark.
- Project sponsors should expect domestic funding costs to track sovereign yields.
"Domestic debt is no longer just a banking-sector story. When pension funds fund more than half of a month's increase, public borrowing and retirement savings are the same conversation."
— TICGL / Tanzania Economic Research Institute (TERI)
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✉️ economist@ticgl.com →07 — Quick AnswersFrequently Asked Questions
How large is Tanzania's government domestic debt?
TZS 40,899.5 billion at end-August 2026, up 3.6% in the month and 9.6% in a year.
Who holds it?
Commercial banks 28.4%, pension funds 27.6%, Bank of Tanzania 17.2%, insurance 5.0%, BoT special funds 2.1%, others 19.6%.
Which instruments dominate?
Treasury bonds at 85.1%, Treasury bills at 4.4%, and overdraft at 10.2%.
What was the August debt service?
TZS 633.4 billion: TZS 163.5 billion principal and TZS 469.9 billion interest.
Built from the Bank of Tanzania Monthly Economic Review, September 2026: Section 2.6 (Domestic Debt), Charts 2.6.1 and 2.6.2, and Tables 2.6.5 and 2.6.6. Monthly issuance values are read from Chart 2.6.2. Y/Y growth, monthly contributions and 6-year growth are TERI calculations.
Muhtasari kwa Kiswahili
Deni la Ndani la Serikali kwa Kundi la Wakopeshaji, Agosti 2026 — Deni la ndani la Serikali lilifikia TZS bilioni 40,899.5 mwishoni mwa Agosti 2026, ongezeko la 3.6% ndani ya mwezi mmoja, likichochewa hasa na utoaji wa hati fungani za Hazina.
Wakopeshaji: Benki za biashara 28.4%, mifuko ya pensheni 27.6%, Benki Kuu 17.2%, bima 5.0%, mifuko maalum ya BoT 2.1%, na wengineo 19.6%.
Nani alichochea ongezeko: Mifuko ya pensheni iliongeza TZS bilioni 801.1, sawa na 56% ya ongezeko la mwezi (hesabu za TERI). Benki za biashara ziliongeza bilioni 148.7 tu.
Vyombo: Hati fungani ni 85.1% ya deni, hati za Hazina 4.4%, na overdraft 10.2%.
Huduma ya deni: Agosti ilikuwa TZS bilioni 633.4, ikiwa na mtaji bilioni 163.5 na riba bilioni 469.9. Hatari ni gharama za riba, mkusanyiko kwa benki na pensheni, na urejeshaji wa hati fungani.
- Deni la ndani: TZS bilioni 40,899.5 | +9.6% y/y
- Benki + Pensheni: 56.0% ya deni
- Mahitaji ya hati fungani: bid-to-cover 3.4
Chanzo: Benki Kuu ya Tanzania, Monthly Economic Review, Septemba 2026. Maelezo zaidi: economist@ticgl.com.