Prepared by TERI for research and strategic-information purposes only. It is not investment, legal, tax or financial advice and does not state the position of the Bank of Tanzania, the Ministry of Finance or the Government. Where TICGL/TERI computes or converts a figure it is marked "TICGL calc." Debt-to-GDP ratios are not shown because the review does not publish current-year GDP in shillings.
00 — OverviewExecutive Summary
Tanzania's debt stock rose 1.7% in August alone, driven by Treasury bond issuance at home and fresh external disbursements. The headline looks heavy, but its composition and the currency effect matter more than the total.
Of the TZS 16.96 trillion added to the debt stock in twelve months, about TZS 6.0 trillion is the weaker shilling revaluing external debt, TZS 7.4 trillion is new net external borrowing and TZS 3.6 trillion is growth in domestic debt (TICGL calc.). The risk is therefore less the absolute size than the 70% external share, a stock that rises automatically whenever the shilling falls, and an interest bill already equal to 13.4% of revenue.
- External: TZS 96.97 tn, of which multilateral lenders TZS 57.73 tn (59.5%) and commercial lenders TZS 33.35 tn (34.4%).
- Domestic: TZS 40.90 tn, 85.1% in Treasury bonds, held mainly by commercial banks, pension funds and the Bank of Tanzania.
- Cost: interest payments of TZS 5.61 tn in FY2025/26 (domestic 3.69 tn, foreign 1.91 tn); in August total debt service was about TZS 1.00 tn.
- Buffers: gross official reserves of about TZS 15.54 tn cover roughly 16% of the external stock (TICGL calc.).
01 — The StockDebt Stock and Twelve-Month Trend
The Bank reports national debt rising 1.7% month on month. In shilling terms the stock has climbed from TZS 120.91 tn in August 2025 to TZS 137.87 tn, with external debt growing faster than domestic.
National Debt Stock: External and Domestic
| TZS trillions | Aug-25 | Jul-26 | Aug-26 | y/y |
|---|---|---|---|---|
| External debt | 83.60 | 96.59 | 96.97 | +16.0% |
| Domestic debt | 37.31 | 39.47 | 40.90 | +9.6% |
| Total national debt | 120.91 | 136.06 | 137.87 | +14.0% |
Source: Bank of Tanzania, Tables 2.6.5 and A10; external and total converted at end-period exchange rates by TICGL/TERI. At end-period TZS values the monthly rise is 1.3% because the shilling firmed 0.4% in August; the Bank reports 1.7% on its own basis.
Growth: Shilling Terms vs Constant Exchange Rate
External Debt, Long-Run
Domestic Debt, Long-Run
External debt rose 16.0% in shilling terms against only 8.2% at a constant exchange rate; total debt rose 14.0% against 8.7%. The shilling averaged 6.7% weaker than a year earlier (end-period about 7.2% weaker). That is why a number like TZS 137.87 tn can overstate the pace of new borrowing (about TZS 6.0 tn of the rise is revaluation), and also why a further depreciation would add to the stock with no new loan being signed.
02 — ExternalExternal Debt: Who Lends, to Whom, and in What Currency
The external stock stands at TZS 96.97 tn, up 0.8% in the month in original-currency terms. Public debt is 83.7% of it. August disbursements were about TZS 0.42 tn, mostly to central government, against debt service of about TZS 0.37 tn.
External Debt by Creditor
Disbursed Debt by Currency
| Creditor | TZS tn | Share Aug-25 | Share Aug-26 |
|---|---|---|---|
| Multilateral | 57.73 | 59.0% | 59.5% |
| Commercial | 33.35 | 34.5% | 34.4% |
| Bilateral | 4.14 | 4.6% | 4.3% |
| Export credit | 1.75 | 2.0% | 1.8% |
| External debt stock | 96.97 | 100% | 100% |
| By borrower | TZS tn | Share | Note |
|---|---|---|---|
| Central government | 81.18 | 83.7% | Includes interest arrears of 0.21 tn |
| Private sector | 15.79 | 16.3% | Private non-guaranteed borrowing |
| Public corporations | 0.00 | 0.0% | TANESCO, ATCL, TRC, TPA, TFC, DAWASA: none outstanding |
What the Money Was Used For
Balance-of-payments and budget support (TZS 22.7 tn) and transport and telecommunications (TZS 21.0 tn) are the largest uses, followed by social welfare and education (TZS 18.6 tn) and energy and mining (TZS 12.1 tn). Agriculture, the sector employing most Tanzanians, accounts for only TZS 5.0 tn (5.2%).
2.1 Arrears are rising
External Debt Arrears
Arrears reached about TZS 2.75 tn (principal TZS 1.93 tn, interest TZS 0.82 tn), nearly double the TZS 1.43 tn of August 2025 and up from TZS 1.73 tn in January. Commercial creditors account for about 56% (TZS 1.54 tn). Arrears are small next to the stock (2.8%) but they signal liquidity strain and raise the cost of future commercial borrowing.
03 — DomesticDomestic Debt: A Bond-Driven, Locally Held Stock
Domestic debt rose 3.6% in August to TZS 40.90 tn, mostly through Treasury bond issuance. The Government raised TZS 0.63 tn from the market in the month, of which TZS 0.18 tn in Treasury bills and TZS 0.45 tn in Treasury bonds, while domestic debt service was TZS 0.63 tn (principal 0.16 tn, interest 0.47 tn).
| Instrument (TZS tn) | Aug-25 | Jul-26 | Aug-26 | Share Aug-26 |
|---|---|---|---|---|
| Government bonds | 29.84 | 33.62 | 34.79 | 85.1% |
| Treasury bills | 2.08 | 1.78 | 1.79 | 4.4% |
| Government stocks | 0.14 | 0.14 | 0.14 | 0.3% |
| Overdraft (non-securitised) | 5.24 | 3.94 | 4.18 | 10.2% |
| Domestic debt stock | 37.31 | 39.47 | 40.90 | 100% |
Source: Bank of Tanzania, Table 2.6.5 (converted from TZS billions). Tax certificates are negligible. Totals exclude liquidity papers.
Domestic Debt by Instrument
Who Holds Domestic Debt
| Holder (TZS tn) | Aug-25 | Jul-26 | Aug-26 | Share |
|---|---|---|---|---|
| Commercial banks | 10.56 | 11.45 | 11.60 | 28.4% |
| Pension funds | 10.12 | 10.49 | 11.29 | 27.6% |
| Bank of Tanzania | 7.05 | 6.82 | 7.05 | 17.2% |
| Insurance | 2.00 | 2.06 | 2.05 | 5.0% |
| BoT special funds | 0.80 | 0.85 | 0.87 | 2.1% |
| Others (public institutions, companies, individuals, non-residents) | 6.78 | 7.79 | 8.03 | 19.6% |
Monthly Issuance for Financing
Government Securities Yields
3.1 Strong demand, falling yields
- Oversubscribed auctions. Two Treasury bill auctions offered TZS 0.58 tn and drew bids of TZS 0.98 tn (cover 1.7), with TZS 0.52 tn accepted. The 15- and 25-year bond auctions offered TZS 0.62 tn, drew TZS 2.14 tn (cover 3.4) and accepted TZS 0.60 tn.
- Long yields lower than a year ago. The 25-year yield fell to 11.48% from 14.42% in August 2025; the 10-year is 10.87% against 13.74%.
- Concentration. Banks and pension funds hold 56% of domestic debt, and banks' holdings of securities rose to TZS 11.72 tn (up 40.3% on a year earlier), which links public borrowing to private credit conditions.
04 — The CostDebt Service and the Budget
Debt service is where the stock meets the budget. In the fiscal year July 2025 to June 2026, revenue (including LGAs) was TZS 41.93 tn, ahead of the TZS 40.47 tn estimate, while total spending was TZS 48.45 tn and the overall deficit TZS 6.15 tn.
Interest Payments: Budget vs Actual
Where the Money Went
How the Deficit Was Financed
| TZS trillions, FY2025/26 | Budget | Actual | Reading |
|---|---|---|---|
| Total revenue (incl. LGAs) | 40.47 | 41.93 | Above target |
| Total expenditure | 48.77 | 48.45 | Slightly below |
| Interest payments | 6.49 | 5.61 | Foreign interest under-ran by 0.88 tn |
| Development expenditure | 17.49 | 17.06 | 35% of spending |
| Overall balance | -7.24 | -6.15 | Narrower than planned |
| Foreign loans received | 5.97 | 6.06 | o/w non-concessional 1.89 tn |
| Domestic financing (net) | 2.95 | 3.44 | Borrowing/roll-over 3.29 tn |
Source: Bank of Tanzania Table A2 (Ministry of Finance), converted from TZS millions. Budget column is the 2025/26 approved budget.
The Government delivered a smaller deficit than budgeted, helped by strong tax collection (tax revenue TZS 34.58 tn). Interest below budget may partly reflect payment timing, so the saving should not be assumed to be permanent. At 13.4% of revenue, interest is the third-largest recurrent claim after wages (TZS 13.28 tn) and other goods, services and transfers (TZS 12.51 tn).
05 — RisksCurrency Sensitivity, Risks and Recommendations
Because the whole external stock is owed in foreign currency, each percentage point of shilling depreciation adds about TZS 0.97 tn to the debt, before any new borrowing.
External Debt at Different Exchange Rates
| Exchange rate (TZS per USD) | External debt (TZS tn) | Change vs today | Total debt (TZS tn) |
|---|---|---|---|
| 2,500 | 91.83 | -5.14 | 132.73 |
| 2,639.9 (end-Aug 2026) | 96.97 | 0.00 | 137.87 |
| 2,750 | 101.01 | +4.04 | 141.91 |
| 2,850 | 104.68 | +7.71 | 145.58 |
| 3,000 | 110.19 | +13.22 | 151.09 |
Illustrative sensitivity, not a forecast. Domestic debt held at TZS 40.90 tn.
| Risk | Why it matters | Evidence |
|---|---|---|
| Currency valuation | Stock rises as shilling weakens | 14.0% growth vs 8.7% at constant external rate |
| Commercial exposure | Higher cost, shorter maturities | TZS 33.35 tn, 34.4% of external debt |
| Arrears build-up | Liquidity strain, higher future risk premium | TZS 2.75 tn vs 1.43 tn a year ago |
| Domestic crowding-in of banks | Competes with private credit | Banks hold TZS 11.72 tn securities (+40.3%) |
| Interest burden | Squeezes development spending | 13.4% of revenue |
| Thin reserve cover | Limited buffer against a sudden stop | Reserves ≈16% of external stock |
Recommendations
For policy makers
- Prioritise concessional and multilateral financing; cap non-concessional borrowing relative to revenue.
- Clear external arrears, especially commercial, before they reprice future borrowing.
- Lengthen the domestic yield curve and widen the investor base beyond banks and pension funds.
- Publish debt-to-GDP, currency mix and a medium-term debt-service profile with each quarterly review.
For businesses and investors
- Model public-sector counterparties, PPP availability payments and tariffs under higher debt-service scenarios.
- Expect continued heavy bond supply: consider long-term bonds and pension-fund co-investment for project funding.
- Match revenue and debt currency; stress-test for TZS 2,850 to 3,000 per USD.
- Track arrears and commercial loan terms when assessing sovereign-linked projects.
"A debt stock that is 70% external and fully in foreign currency is a shilling bet. The question is not only how much Tanzania owes, but how much of the stock moves with the exchange rate rather than with decisions in Dodoma."
— TICGL / Tanzania Economic Research Institute (TERI)
06 — What TICGL DoesFrom Debt Data to Bankable Projects
Public-debt capacity decides which projects are financed by government, which move to PPP, and what investors can expect in payment risk. TICGL (Tanzania Investment and Consultant Group Ltd), with its research arm TERI, combines original economic research with practical advisory outputs across Tanzania and East Africa. Three technical service lines connect directly to the issues in this report.
Feasibility Studies
- Pre-feasibility and full feasibility studies for PPP and private projects.
- Financial models with FX and inflation escalation, NPV, IRR, DSCR and affordability tests against public-sector budgets.
- Value-for-money and risk-allocation analysis to support PPP over debt-financed procurement.
- Sensitivity analysis on interest rates, exchange rates and payment delays.
Market Entry Advisory
- Sector and location screening with sovereign and counterparty risk assessment.
- Entry-mode choice, incentives mapping and regulatory pathway.
- Currency and financing structure advice, including local-currency funding options.
- Partner, lender and supplier identification.
Market Research
- Macro, fiscal and sector outlooks built on Bank of Tanzania, NBS and Ministry data.
- Demand sizing, consumer and stakeholder surveys, willingness-to-pay studies.
- Policy briefs, training materials and SEO-ready research publications.
- Capital-market and public-finance analysis for institutional clients.
With interest at 13.4% of revenue and arrears rising, projects that depend on government payments need an explicit affordability and payment-risk layer. A refresh of the fiscal and currency assumptions in a feasibility model, PPP proposal or market-entry case is a low-cost way to avoid mispriced risk.
Talk to TICGL/TERI
Request a feasibility, market-entry or market-research scoping call, or a fuller briefing on this report.
What We Do → TICGL Markets → TERI Research → ✉️ economist@ticgl.com07 — SourcesMethod & Source Note
Source: Bank of Tanzania, Monthly Economic Review, September 2026: Section 2.6 (Debt Developments), Section 2.7, Tables 2.6.1–2.6.6, and Statistical Tables A1, A2, A4 and A10, which cite the Ministry of Finance, Bank of Tanzania and Tanzania Revenue Authority. The review publishes external debt in US dollars; TICGL/TERI converts it to TZS trillions using end-of-period exchange rates from Table A10 (TZS 2,639.9 at end-August 2026; monthly series use each month's own rate; year-end A1 rates for 2018–2025). Currency-share and use-of-funds splits apply the published percentage shares to disbursed outstanding debt of TZS 96.15 tn. "Constant exchange rate" growth uses the original-currency series. Domestic debt excludes liquidity papers. August 2026 data are provisional. Scenario and sensitivity figures are illustrations, not forecasts.
08 — Quick AnswersFrequently Asked Questions
How large is Tanzania's national debt?
About TZS 137.9 trillion at end-August 2026: TZS 97.0 trillion external (70.3%) and TZS 40.9 trillion domestic (29.7%).
How much of the rise in debt is due to the weaker shilling?
Debt rose about 14.0% in shilling terms over the year but about 8.7% with external debt at a constant exchange rate; about TZS 6.0 trillion of the TZS 17.0 trillion rise is currency valuation.
Who does Tanzania owe?
Externally, multilateral lenders (59.5%), commercial lenders (34.4%), bilateral creditors (4.3%) and export credit (1.8%). Domestically, banks (28.4%), pension funds (27.6%) and the Bank of Tanzania (17.2%) are the largest holders.
What does Tanzania pay in interest?
TZS 5.61 trillion in FY2025/26 (domestic TZS 3.69 trillion, foreign TZS 1.91 trillion), about 13.4% of revenue.
Are external arrears a concern?
Arrears reached about TZS 2.75 trillion, nearly double a year earlier, though only 2.8% of the external stock. The trend deserves monitoring, particularly commercial arrears.
Muhtasari kwa Kiswahili
Muhtasari wa Deni la Taifa la Tanzania. Kufikia mwisho wa Agosti 2026, deni la taifa lilikuwa takriban TZS trilioni 137.9: deni la nje TZS trilioni 97.0 (asilimia 70.3) na deni la ndani TZS trilioni 40.9 (asilimia 29.7). Deni liliongezeka kwa asilimia 1.7 ndani ya mwezi mmoja, kwa mujibu wa Benki Kuu ya Tanzania.
Ongezeko la mwaka: Deni limekua kwa asilimia 14.0 kwa shilingi, lakini ni asilimia 8.7 tu deni la nje likikadiriwa kwa kiwango cha ubadilishaji kisichobadilika. Maana yake, takriban TZS trilioni 6.0 za ongezeko la trilioni 17.0 zinatokana na kushuka kwa thamani ya shilingi, kwa sababu deni la nje ni la fedha za kigeni.
Deni la nje: Taasisi za kimataifa (multilateral) zinadai asilimia 59.5 (TZS trilioni 57.7), wakopeshaji wa kibiashara asilimia 34.4 (TZS trilioni 33.4). Asilimia 64.9 ya deni ni kwa dola ya Marekani. Malimbikizo ya deni la nje yamefikia TZS trilioni 2.75 kutoka trilioni 1.43 mwaka jana.
Deni la ndani: Asilimia 85.1 ni hati fungani (bonds). Wamiliki wakuu ni benki za biashara (28.4%), mifuko ya pensheni (27.6%) na Benki Kuu (17.2%). Minada imejaa maombi na riba za muda mrefu zimeshuka: hati fungani ya miaka 25 ni asilimia 11.48.
Gharama: Malipo ya riba mwaka wa fedha 2025/26 yalikuwa TZS trilioni 5.61 (ndani 3.69, nje 1.91), sawa na asilimia 13.4 ya mapato ya TZS trilioni 41.93. Upungufu wa jumla wa bajeti ulikuwa TZS trilioni 6.15.
Hatari na ushauri: Kila asilimia 1 ya kushuka kwa shilingi huongeza deni la nje kwa takriban TZS trilioni 0.97. Sera zilenge mikopo nafuu, kulipa malimbikizo na kupanua wawekezaji wa hati fungani. TICGL/TERI hutoa upembuzi yakinifu (feasibility), ushauri wa kuingia sokoni na utafiti wa soko.
Hitimisho: Deni linahimilika, lakini thamani ya shilingi na gharama za riba ndizo zitakazoamua uhimilivu wake. Kinachohitajika ni usimamizi makini wa mchanganyiko wa sarafu na malimbikizo.
- Deni la taifa: TZS trilioni 137.87 · Nje: 96.97 · Ndani: 40.90
- Ongezeko la mwaka: 14.0% (8.7% bila athari ya sarafu ya deni la nje)
- Riba FY2025/26: TZS trilioni 5.61 (13.4% ya mapato)
- Malimbikizo ya deni la nje: TZS trilioni 2.75
Chanzo: Benki Kuu ya Tanzania, Mapitio ya Kila Mwezi ya Uchumi, Septemba 2026; mabadiliko kwenda TZS trilioni na TICGL/TERI. Kwa maelezo zaidi: economist@ticgl.com.