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. Holdings in the weekly reports are at face value and use the Bank's investor categories, so they differ from the Ministry of Finance domestic-debt figures in the Monthly Economic Review, which use a different basis and include non-securitised debt. Yields in the "yield curve" tab are weighted average yields from the latest auction of each tenor; the weekly reports do not state auction dates for every tenor, and the Bank's own secondary-market curve (Chart 10) is only shown graphically.
00 — OverviewExecutive Summary
The market is deep but concentrated. Bonds are 89% of the stock; banks and pension funds hold 64%; and in the latest bill auction banks were practically the only bidders. Demand is healthy at long maturities, but the price of long money is edging up.
Strong long-end demand (25-year bond cover of 3.49x, 15-year cover of 2.43x) coexists with a thin bill market (cover 0.80x), and one plausible link (not confirmed by the data) is that banks prefer longer paper to bills yielding well below the policy rate, while pension funds, which already hold 30% of the stock, were allotted only 7.2% of the last 15-year bond and their holdings did not grow in the week. The Government's funding therefore depends on a small group of buyers.
- Stock: TZS 33.41 tn (2 Oct) → TZS 33.56 tn (9 Oct); bills rose TZS 0.15 tn to TZS 3.57 tn while bonds were roughly flat (+TZS 0.01 tn).
- Investors: banks added TZS 0.20 tn in a week; retail investors (-0.03 tn) and insurers (-0.02 tn) reduced holdings (TICGL calc.).
- Price: 15-year bond WAY 10.79% vs 10.55% at the previous auction; the 364-day bill WAY 6.28%, almost exactly the 6.25% Central Bank Rate.
- Next: a 25-year bond auction on Wednesday 14 October; its previous result was 11.48% at 3.49x cover.
01 — HoldingsWho Owns Tanzania's Government Securities
Outstanding government securities were TZS 33.56 tn at face value on 9 October: Treasury bonds TZS 29.99 tn (89.35%) and Treasury bills TZS 3.57 tn (10.65%). The previous week they were TZS 33.41 tn (bonds 89.74%, bills 10.26%).
Holdings by Investor Category
Weekly Change in Holdings
| Investor category | 2 Oct (TZS bn) | 9 Oct (TZS bn) | Share 9 Oct | Change (bn) |
|---|---|---|---|---|
| Banks | 11,232.82 | 11,432.15 | 34.06% | +199.33 |
| Pension funds | 10,117.52 | 10,117.34 | 30.14% | -0.18 |
| Retail investors | 5,908.68 | 5,883.12 | 17.53% | -25.56 |
| CIS & other official entities | 2,713.71 | 2,714.81 | 8.09% | +1.10 |
| Insurance companies | 2,464.98 | 2,446.86 | 7.29% | -18.12 |
| Others | 970.26 | 970.04 | 2.89% | -0.22 |
| Total | 33,407.97 | 33,564.32 | 100% | +156.35 |
Source: Bank of Tanzania, Table 3 of each weekly report. Change column is TICGL/TERI calculation. CIS = collective investment schemes.
Bonds vs Bills in the Stock
Registered Clients Added per Fiscal Year
1.1 What the holdings tell us
- Two-thirds in two hands. Banks and pension funds hold TZS 21.55 tn, 64.2% of the stock. Insurers add 7.3%. Together the three institutional groups hold 71.5%.
- Retail is meaningful but flat. Retail investors hold TZS 5.88 tn (17.5%) and the Bank has onboarded 3,103 new clients this fiscal year (total 34,605), already 31% of the 9,899 added in the last full year, after about three months.
- Pension funds are not adding. Their holdings were unchanged at TZS 10.12 tn (-TZS 0.18 bn in the week), even as banks bought TZS 199 bn.
- The week's growth was mainly bills held by banks. The stock rose TZS 156 bn; bills rose TZS 146 bn. Banks' rise of TZS 199 bn exceeds the net increase, as other holders sold or redeemed.
02 — BondsTreasury Bond Auctions: Strong Demand, Rising Yield
The 15-year Treasury bond No. 696 was auctioned on 30 September 2026. It attracted 312 bids, of which 208 succeeded. Bids totalled TZS 504.13 bn against TZS 207.27 bn offered, an oversubscription of TZS 296.86 bn (cover 2.43x), and TZS 196.51 bn was allotted. The weighted average yield to maturity was 10.7907%, up from 10.5515% at the previous auction of the same tenor.
| Bond auction (latest per tenor) | 2-yr No.712 | 5-yr No.700 | 10-yr No.711 | 15-yr No.696 (prev) | 15-yr No.696 (30 Sep) | 25-yr No.695 |
|---|---|---|---|---|---|---|
| Coupon | 9.50% | 10.25% | 11.25% | 12.25% | 12.25% | 13.25% |
| Redemption date | 30-Jul-28 | 30-Apr-31 | 23-Jul-36 | 19-Feb-41 | 19-Feb-41 | 05-Feb-51 |
| Bids received / successful | 93 / 45 | 100 / 75 | 165 / 87 | 396 / 235 | 312 / 208 | 2,681 / 1,671 |
| Offered (TZS bn) | 138.95 | 145.63 | 182.90 | 207.27 | 207.27 | 414.19 |
| Tendered (TZS bn) | 438.45 | 398.06 | 364.96 | 689.45 | 504.13 | 1,446.83 |
| Allotted (TZS bn) | 111.49 | 143.57 | 149.60 | 181.19 | 196.51 | 414.20 |
| Bid-to-cover | 3.16x | 2.73x | 2.00x | 3.33x | 2.43x | 3.49x |
| Weighted avg yield (%) | 8.40 | 9.53 | 10.69 | 10.55 | 10.79 | 11.48 |
| WAP (per 100) | 101.9580 | 102.6275 | 103.3267 | 112.4713 | 110.5120 | 114.4173 |
| Lowest / highest bid | 82.15 / 104.59 | 90.64 / 105.00 | 83.40 / 109.00 | 86.55 / 117.03 | 90.67 / 113.56 | 88.67 / 118.80 |
Source: Bank of Tanzania, Table 5 of the 2 October report. Auction dates are not stated for tenors other than the 15-year. Allotted = "successful bids" in the Bank's table.
Bid-to-Cover by Auction
15-Year Bond: Offered, Tendered, Allotted
Who Bid and Who Was Allotted
| Investor category | Subscription % | Allotment % | Allotted (TZS bn) | Gap (pp) |
|---|---|---|---|---|
| Banks | 51.05 | 48.17 | 94.66 | -2.88 |
| Individuals & companies | 22.87 | 28.35 | 55.71 | +5.48 |
| Collective investment schemes | 12.24 | 10.97 | 21.56 | -1.27 |
| Pension funds | 8.75 | 7.18 | 14.1 | -1.57 |
| Insurance companies | 5.08 | 5.33 | 10.5 | +0.25 |
Source: Bank of Tanzania Table 4. Allotted amounts for pension funds and insurers are TICGL/TERI calculations (allotment share × TZS 196.51 bn).
2.1 Reading the bond results
- Demand weakened, not collapsed. The 15-year cover fell from 3.33x to 2.43x and tendered volume fell 27% (TZS 689.45 bn → 504.13 bn), yet the Treasury allotted 94.8% of what it offered and paid 24 bps more.
- Bank-led. Banks put in 51% of bids, more than double the next category. Individuals and companies were allotted 5.5 points more than their share of subscriptions; the report does not say why.
- Pension funds took little. Only 8.75% of bids and 7.18% of allotments (about TZS 14 bn), despite holding 30% of the stock. Either their appetite is saturated or they prefer other assets.
- The long end clears at a premium. The 25-year bond drew 2,681 bids and TZS 1.45 tn against TZS 414 bn offered, accepting the full offer at 11.48%, a sign that investors will lend long at around 11.5%.
03 — BillsTreasury Bill Auction No. 1208: Undersubscribed
The Treasury bills auction on 7 October 2026 offered the 35-, 91-, 182- and 364-day tenors. It drew 54 bids, of which 49 succeeded. Bids totalled TZS 309.50 bn against TZS 388.70 bn offered, an undersubscription of TZS 79.20 bn (cover 0.80x), and TZS 279.40 bn was allotted.
| T-bill auction, 7 Oct | 35-day | 91-day | 182-day | 364-day | Total |
|---|---|---|---|---|---|
| Maturity date | 12-Nov-26 | 07-Jan-27 | 08-Apr-27 | 07-Oct-27 | — |
| Bids received / successful | 2 / 2 | 10 / 10 | 24 / 19 | 18 / 18 | 54 / 49 |
| Offered (TZS bn) | 49.9 | 69.9 | 99.9 | 169.0 | 388.7 |
| Tendered (TZS bn) | 10.0 | 42.0 | 130.0 | 127.5 | 309.5 |
| Allotted (TZS bn) | 10.0 | 42.0 | 99.9 | 127.5 | 279.4 |
| Bid-to-cover | 0.20x | 0.60x | 1.30x | 0.75x | 0.80x |
| Weighted avg yield (%) | 3.36 | 3.49 | 5.63 | 6.28 | — |
| WAP (per 100) | 99.6790 | 99.1372 | 97.2696 | 94.1029 | — |
Source: Bank of Tanzania, Table 5 of the 9 October report. Total cover is TICGL/TERI calculation (309.5 ÷ 388.7). Only the 182-day tenor was oversubscribed (TZS 30.1 bn).
Offered vs Tendered vs Allotted
Bill Yields: August vs 7 October
3.1 Why the bill market is shallow
- Banks only. Banks supplied 99.98% of subscriptions and received 99.97% of allotments (TZS 279.33 bn); individuals and companies got TZS 0.07 bn. Bills are effectively an interbank-liquidity instrument.
- Short bills pay far less than the policy rate. The 35-day yield of 3.36% is almost 3 points below the 6.25% CBR; only the 364-day (6.28%) matches it. Bids concentrated in the 182- and 364-day tenors (TZS 257.5 bn of 309.5 bn), leaving the 35- and 91-day tenors at 0.20x and 0.60x cover.
- The bill curve flattened. Versus the August monthly averages, the 35-day yield rose 125 bps (2.11% → 3.36%) while the 364-day fell 42 bps (6.70% → 6.28%), shrinking the 35-to-364-day spread from 4.59 to 2.92 percentage points (TICGL calc.).
- Link to liquidity. The 7 October auction day coincided with a one-day collapse in interbank volume to TZS 1.0 bn and a 6.05% rate (Part 2), consistent with banks holding back cash for the auction or settling it.
Undersubscription means the Government could not raise the full TZS 388.70 bn planned. Given bills are only 10.7% of the stock, the funding impact is small, but a bid-to-cover of 0.80x compares with 1.7x for the August auctions (Bank's September review) and is a warning that the bank base for bills is narrow.
04 — Yield CurveThe Curve and What to Watch
Combining the latest auction result for each tenor gives a picture of the curve from 35 days to 25 years. It is steep at the short end, flatter in the middle and runs from 3.4% to 11.5%.
Tanzania Government Securities Yield Curve (Auction-Based)
| Tenor | Yield (%) | vs CBR 6.25 (bps) | Source |
|---|---|---|---|
| 35-day | 3.36 | -289 | Auction 7 Oct |
| 91-day | 3.49 | -276 | Auction 7 Oct |
| 182-day | 5.63 | -62 | Auction 7 Oct |
| 364-day | 6.28 | +3 | Auction 7 Oct |
| 2-year | 8.40 | +215 | Latest auction |
| 5-year | 9.53 | +328 | Latest auction |
| 10-year | 10.69 | +444 | Latest auction |
| 15-year | 10.79 | +454 | Auction 30 Sep |
| 25-year | 11.48 | +523 | Latest auction |
Slope of the Curve
Bond Yields: August vs Latest Auction
4.1 What the curve says
- Upward sloping and credible. The 25-year yield is 308 bps above the 2-year and 523 bps above the CBR. Investors demand a clear term premium but do not price a sharp policy shock.
- The 2-year to 364-day jump of 212 bps. There is a sizeable step between the bill and bond segments of the curve.
- Rates are close to August for most tenors. The 2-year (8.40%), 5-year (9.53%) and 25-year (11.48%) match August levels; the 10-year is 18 bps lower (10.87% → 10.69%) and the 15-year 24 bps higher (10.55% → 10.79%).
4.2 Outlook and risks
- 14 October 25-year auction. The last 25-year cleared the full TZS 414 bn at 11.48% with 3.49x cover. A cover below about 3x or a yield above 11.8% would be a warning that long-end demand is cooling alongside the 15-year softening. This is a TICGL/TERI threshold for monitoring, not a forecast.
- Concentration. Banks are the marginal buyers of both bills (99.98%) and bonds (51%); a shift in bank liquidity, as shown in Part 2, hits the Treasury directly.
- Pension-fund saturation. If pension funds, 30% of the stock, stop adding, new supply must be absorbed by banks and retail or by higher yields.
- Crowding-out. With the Government borrowing heavily at 10–11.5% in the long end, private firms seeking local-currency bonds face a high benchmark. Banks hold TZS 11.43 tn of government paper while private credit grows 33%.
For investors and pension managers
- Treat 11.5% as the 25-year benchmark and 10.8% as the 15-year benchmark for discounting.
- Use auction cover and the allotted-to-offered ratio as demand signals, not only yield.
- Bills below the CBR suit liquidity management, not return; ladder into 182- and 364-day bills.
For corporates and project sponsors
- Price local-currency debt off the government curve plus a credit spread of 2–4 points (illustratively about 13.5–15.5% for long tenors).
- Consider infrastructure bonds or pension-fund co-investment where pension funds are saturated.
- Time issuance away from heavy government auction weeks.
"The Treasury can still borrow long at about 11 percent, but it is borrowing from the same few hands. The real depth test is whether pension funds, insurers and retail investors take more of the next auctions."
— TICGL / Tanzania Economic Research Institute (TERI)
05 — What TICGL DoesFrom Market Data to Financing Strategy
The government yield curve is the benchmark for every local-currency financing decision. 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 use the analysis in this report directly.
Feasibility Studies
- Pre-feasibility and full feasibility studies for PPP and private projects.
- Discount-rate and cost-of-capital build-ups anchored on the government curve.
- Financing-structure options: bank debt, infrastructure bonds, pension-fund and PPP funding.
- Sensitivity to yields, inflation and exchange rates, with DSCR and affordability tests.
Market Entry Advisory
- Sector screening including local-currency financing availability and cost.
- Treasury and working-capital planning for new entrants.
- Entry-mode choice, incentives and capital-market access routes.
- Partner, lender and investor identification.
Market Research
- Weekly, monthly and quarterly capital-market monitoring from official sources.
- Investor-base, pension and capital-market depth studies.
- Primary surveys and stakeholder interviews with issuers, banks and fund managers.
- Policy briefs, training materials and SEO-ready publications.
A project discount rate set off the CBR (6.25%) understates the cost of long-term local money by about 4.5 to 5 points. Refreshing the curve inputs in a feasibility model, PPP proposal or bond plan takes little time and avoids mispriced risk.
Talk to TICGL/TERI
Request a feasibility, market-entry or market-research scoping call, or a fuller briefing on this series.
What We Do → TICGL Markets → TERI Research → ✉️ economist@ticgl.com06 — SourcesMethod & Source Note
Source: Bank of Tanzania, Domestic Financial Markets Weekly Reports for 28 September–2 October 2026 and 5–9 October 2026 (Section 3: Tables 3–5, Chart 9), plus the Monthly Economic Review, September 2026 (Table A4 yields; Section 2.4 auction cover). Weekly changes in holdings, per-category allotments for pension funds and insurers, total T-bill cover, curve spreads versus the CBR and the August-to-October yield comparisons are TICGL/TERI computations. "Latest auction" tenors in the bond table carry no dates in the weekly report. The monitoring thresholds for the 14 October auction are TICGL/TERI judgements, not forecasts. This is Part 3 of a three-part series; Part 1 covers the foreign exchange market and Part 2 the money market.
07 — Quick AnswersFrequently Asked Questions
How much government debt is outstanding in the securities market?
TZS 33.56 trillion at face value on 9 October 2026: bonds TZS 29.99 trillion (89.35%) and bills TZS 3.57 trillion (10.65%).
Who holds Tanzania's government securities?
Banks 34.06%, pension funds 30.14%, retail investors 17.53%, CIS and other official entities 8.09%, insurers 7.29% and others 2.89%.
What was the latest Treasury bond auction result?
The 15-year bond of 30 September drew TZS 504.13 billion against TZS 207.27 billion offered, allotted TZS 196.51 billion at a weighted average yield of 10.79%, up from 10.55%.
Was the 7 October Treasury bill auction successful?
It was undersubscribed: TZS 309.50 billion tendered against TZS 388.70 billion offered (0.80x), TZS 279.40 billion allotted, banks 99.98% of bids. Yields were 3.36%, 3.49%, 5.63% and 6.28% for 35-, 91-, 182- and 364-day bills.
What happens next?
A 25-year Treasury bond will be offered on Wednesday 14 October 2026. The previous 25-year auction yielded 11.48% at 3.49x cover.
Muhtasari kwa Kiswahili
Soko la Dhamana za Serikali la Tanzania. Kwa mujibu wa ripoti mbili za wiki za Benki Kuu ya Tanzania (28 Sep – 9 Okt 2026), dhamana za serikali zilizopo sokoni zilifikia TZS trilioni 33.56 tarehe 9 Oktoba, kutoka trilioni 33.41 wiki iliyotangulia. Hati fungani ni TZS trilioni 29.99 (asilimia 89.35) na hati za muda mfupi (T-bills) ni trilioni 3.57 (asilimia 10.65).
Wamiliki: Benki asilimia 34.06, mifuko ya pensheni asilimia 30.14, wawekezaji wa rejareja asilimia 17.53, bima asilimia 7.29. Mifuko ya pensheni haikuongeza dhamana wiki hii (TZS trilioni 10.12), wakati benki ziliongeza takriban TZS bilioni 199.
Mnada wa hati fungani ya miaka 15 (30 Sep): Zabuni zilikuwa TZS bilioni 504.13 dhidi ya bilioni 207.27 zilizotolewa (mara 2.43). Mapato ya wastani (yield) yalipanda hadi asilimia 10.79 kutoka asilimia 10.55. Benki zilitoa asilimia 51 ya zabuni, mifuko ya pensheni asilimia 8.75 tu.
Mnada wa T-bills (7 Okt): Zabuni zilikuwa TZS bilioni 309.50 dhidi ya bilioni 388.70 zilizotolewa (mara 0.80), yaani haukujazwa. Benki zilitoa asilimia 99.98 ya zabuni. Yield: siku 35 asilimia 3.36, siku 91 asilimia 3.49, siku 182 asilimia 5.63, siku 364 asilimia 6.28.
Mkunjo wa yield: Kutoka asilimia 3.4 (siku 35) hadi asilimia 11.48 (miaka 25). Yield ya siku 364 ni sawa na CBR ya asilimia 6.25. Mnada ujao ni wa hati fungani ya miaka 25 tarehe 14 Oktoba; mnada uliopita ulikuwa asilimia 11.48 kwa mara 3.49.
Ushauri: Wawekezaji watumie asilimia 11.5 kama kigezo cha miaka 25 na asilimia 10.8 kwa miaka 15. Miradi isipime gharama ya mtaji kwa CBR ya asilimia 6.25 pekee. TICGL/TERI hutoa upembuzi yakinifu (feasibility), ushauri wa kuingia sokoni na utafiti wa soko.
Hitimisho: Mahitaji ya dhamana ndefu ni mazuri, lakini yanatoka kwa wanunuzi wachache. Kina cha soko kitapimwa na kama mifuko ya pensheni, bima na wawekezaji wa rejareja watachukua sehemu kubwa ya minada ijayo.
- Dhamana zilizopo: TZS trilioni 33.56 (hati fungani 29.99, T-bills 3.57)
- Yield ya miaka 15: 10.79% (+24 bps) · miaka 25: 11.48%
- Mnada wa T-bills: mara 0.80 (haukujazwa)
- Benki: 99.98% ya zabuni za T-bills
Chanzo: Benki Kuu ya Tanzania, Domestic Financial Markets Weekly Reports (28 Sep – 9 Okt 2026). Kwa maelezo zaidi: economist@ticgl.com.