Prepared by TERI for research and strategic-information purposes; not investment, legal, tax or financial advice. "y/y" is September 2026 against September 2025. Shilling depreciation is measured as the rise in TZS per USD.
00 — Overview & VerdictStable Month to Month, Weaker Over the Year, With Debt Risk Concentrated in Currency and Arrears
The shilling is stable in the short run but not in the 12-month view. It gained 0.08% on August (2,657.01 to 2,654.91), yet end-period TZS per USD rose from 2,442.8 (Sep-25) to 2,642.3 (Sep-26), about 8.2% weaker.
National debt grew modestly in dollars but faster in shillings. Total debt rose 4.9% to USD 52,344.2M; external debt (70.3%) rose 6.6% in USD but about 15.3% in TZS terms because of depreciation (TICGL calc.).
The weak spot is arrears, not the headline stock. External arrears doubled from USD 584M to USD 1,197M, led by private-sector commercial debt, while the current account deficit widened to USD 2.40B. Reserves of USD 6.03B (4.3 months) remain above the benchmark.
Shilling per USD, End of Month
National Debt Stock: External and Domestic
Key indicators
| Indicator | Sep-25 | Aug-26 | Sep-26 | Reading |
|---|---|---|---|---|
| TZS per USD (end of period) | 2,442.8 | 2,639.9 | 2,642.3 | Flat m/m; +8.2% y/y |
| Total national debt (USD M) | 49,918.0 | 52,341.1 | 52,344.2 | +4.9% y/y |
| External debt stock (USD M) | 34,510.1 | 36,848.2 | 36,784.2 | +6.6% y/y |
| External arrears (USD M) | 584.1 | 1,065.6 | 1,197.4 | Doubled in 12 months |
| Central Bank Rate (%) | 5.75 | 6.25 | 6.25 | Raised in July 2026 |
| Headline inflation (%) | 3.4 | 4.3 | 4.3 | Inside 3–5% target |
Table 0.1. Source: BoT Monthly Economic Review, October 2026; TICGL/TERI calc.
Key findings
- Stability is real but narrow: BoT sold only USD 7.2M in September on a USD 151.7M market.
- Currency risk is total: external debt is USD 65.3%, euro 18.1%, yuan 6.7%, other 10.0%.
- Debt is mostly official: multilateral 59.5%, commercial 34.5%; central government owes 83.4%.
- Domestic debt is bank- and pension-held: banks 28.5% and pensions 27.4%; BoT 17.4%.
- Oil is the shock: crude averaged USD 102.3 in September (USD 84.4 in August); petroleum imports rose 72.3%.
01 — Shilling StabilityHow Stable Is the Shilling, and What Defends It?
Foreign exchange conditions stayed calm in September, supported by commodity export and tourism inflows. The annual 7.4% depreciation largely reflects a base effect, as the shilling appreciated sharply in September 2025. Since then it has weakened steadily as oil prices rose from March 2026.
Monthly Change in TZS per USD
Exchange Rate 2018–2025
Gross Reserves and Import Cover
| Shilling defence indicator | Sep-26 reading |
|---|---|
| Average rate | TZS 2,654.91 per USD (Aug: 2,657.01) |
| Interbank FX turnover | USD 151.7M; BoT net sales USD 7.2M |
| Reserves | USD 6,031.9M, 4.3 months of projected imports, above national benchmark; supported by BoT gold purchases |
| Policy stance | CBR 6.25%; IBCM rate 6.67%; corridor 4.75–7.75% |
| Market reform | Electronic Matching System (May 2026); Government securities opened to foreign investors (17 Jul 2026) |
Intervention was light, so month-to-month stability reflects genuine balance. But the eight-percent drift since September 2025 shows the shilling responds to the oil and import shock with a lag.
02 — National DebtSize, Currency, Creditors and Arrears
External Debt by Creditor (Disbursed)
External Debt Arrears
Government Domestic Debt Stock
Domestic Debt by Holder, Sep-26
| External debt by creditor (USD M) | Sep-25 | Sep-26 | Share |
|---|---|---|---|
| Multilateral | 20,230.1 | 21,892.2 | 59.5% |
| Commercial | 12,042.8 | 12,677.7 | 34.5% |
| Bilateral | 1,559.3 | 1,547.4 | 4.2% |
| Export credit | 677.8 | 666.9 | 1.8% |
| External debt stock | 34,510.1 | 36,784.2 | 100% |
| Borrower / instrument | Sep-26 | Comment |
|---|---|---|
| Central government (USD M) | 30,695.7 | 83.4% of external debt |
| Private sector (USD M) | 6,088.5 | 16.6%; interest arrears USD 249.3M (Sep-25: 103.6) |
| Government bonds (TZS bn) | 34,795.6 | 84.6% of domestic debt |
| Treasury bills (TZS bn) | 1,896.4 | 4.6% |
| Overdraft (TZS bn) | 4,285.8 | 10.4% |
Tables 2.1–2.2. Source: BoT Monthly Economic Review, October 2026.
The stock is mostly concessional-leaning (multilateral 59.5%), but arrears nearly doubled, with commercial principal arrears at USD 549.6M (Sep-25: 184.5). Domestic debt grew 8.7% in TZS from September 2025, while its dollar value rose only about 1%.
03 — Shilling vs DebtThe Link: Depreciation Inflates the Shilling Cost of Debt
Index, September 2025 = 100
Monthly External Debt Service
External Sector, Year to September
| Metric (TICGL/TERI calc.) | Value | Basis |
|---|---|---|
| External debt in TZS, Sep-25 | TZS 84.3 tn | USD 34,510.1M × 2,442.8 |
| External debt in TZS, Sep-26 | TZS 97.2 tn (+15.3%) | USD 36,784.2M × 2,642.3 |
| Of which exchange-rate effect | +8.2% | Rest is +6.6% new borrowing |
| External debt service, 12 months | USD 2,658M | Principal 1,915; interest 743 |
| Debt service ÷ exports of goods and services | ≈12.6% | Exports USD 21,065.1M |
Depreciation sensitivity calculator
Defaults: Sep-26 external debt, 12-month debt service and end-period rate.
Because the stock is 100% foreign-currency, a further 5% depreciation would add about TZS 4.9 trillion to external debt and about TZS 350 billion a year to service. Reserve cover, concessional creditors and rising gold earnings (USD 5.8B, up from 4.4B) are the buffers.
04 — Macro & PolicyOil Shock, Tighter Policy and Fiscal Position
Oil Price vs Headline Inflation
Policy and Market Rates
| July 2026 central government (TZS M) | Estimate | Actual |
|---|---|---|
| Total revenue (incl. LGAs) | 3,198,357 | 3,502,199 |
| Tax revenue | 2,574,527 | 2,877,010 |
| Total expenditure | 3,376,922 | 3,572,478 |
| Domestic interest payments | 192,159 | 383,782 |
| Foreign interest payments | 230,326 | 181,141 |
- Policy: CBR raised to 6.25% (from 5.75%) to contain second-round pressure; private credit grew 34.2%, M3 25.9% y/y.
- Domestic financing: TZS 356bn raised in September; domestic service TZS 556.4bn (interest 305.6bn); bond yields 5-yr 9.53%, 10-yr 10.69%, 15-yr 10.79%.
- Risks: Middle East conflict, El Niño, fertilizer prices; offsets: gold, tourism (USD 4.57B) and transit freight.
- IMF: global growth 3.1% for 2026; Sub-Saharan Africa 4.5%.
The shilling is stable enough for now, but debt sustainability depends on arrears clearance, export earnings and oil. Priorities: settle arrears, favour concessional and shilling-denominated funding (foreign access to bonds helps), and build reserves while gold prices are high.
How TICGL and TERI can help
TICGL/TERI provides debt-sustainability analysis, FX-risk modelling, PPP structuring and bankable project preparation. Contact economist@ticgl.com.
05 — Sources & Data NotesMethod and Definitions
Source. Bank of Tanzania, Monthly Economic Review, October 2026 (Tables 2.1–2.7, A1–A10), with NBS, Ministry of Finance, TRA and World Bank data as cited there. Calculations. Indexes, TZS values of debt, 12-month debt service, ratios and sensitivities are TICGL/TERI arithmetic. TZS value of debt uses end-period exchange rates from Table A10; domestic debt in USD is BoT's series. Section 2 uses disbursed outstanding debt (DOD) for creditor splits; the arrears chart is separate. The annual depreciation of 7.4% is BoT's average-rate measure; 8.2% is the end-period change. Provisional (p) and revised (r) data may change.
06 — Quick AnswersFrequently Asked Questions
Is the Tanzanian shilling stable in 2026?
Stable month to month, weaker over the year. It averaged TZS 2,654.91 per USD in September 2026 against 2,657.01 in August, but depreciated 7.4% year on year, partly a base effect.
How large is Tanzania's national debt?
USD 52,344.2 million at end-September 2026: external USD 36,784.2 million (70.3%) and domestic TZS 41,113.5 billion (about USD 15,560 million).
Why does a weaker shilling raise debt?
All external debt is in foreign currency (USD 65.3%, euro 18.1%, yuan 6.7%, other 10.0%), so each depreciation raises its cost in shillings and the shilling cost of servicing it.
Are Tanzania's external debt arrears rising?
Yes. Arrears rose from USD 584.1 million in September 2025 to USD 1,197.4 million in September 2026, led by private-sector commercial debt.
Muhtasari kwa Kiswahili
Je, shilingi ya Tanzania ni imara wakati deni la taifa linaongezeka? Kulingana na Mapitio ya Kila Mwezi ya Uchumi ya BoT (Oktoba 2026): shilingi ni tulivu kwa mwezi, lakini dhaifu kwa mwaka.
Shilingi: wastani wa TZS 2,654.91 kwa USD Septemba 2026 (Agosti 2,657.01); imeshuka thamani kwa asilimia 7.4 kwa mwaka, kwa kiasi kikubwa kutokana na athari ya msingi. Akiba ya fedha za kigeni USD milioni 6,031.9, inatosha miezi 4.3 ya uagizaji.
Deni la taifa: USD milioni 52,344.2 (ongezeko la asilimia 4.9). Deni la nje USD milioni 36,784.2 (asilimia 70.3), lote kwa fedha za kigeni (USD asilimia 65.3, euro 18.1). Deni la ndani TZS bilioni 41,113.5.
Hatari kuu: thamani ya deni la nje kwa shilingi imepanda takriban asilimia 15.3, na malimbikizo ya deni la nje yameongezeka maradufu hadi USD milioni 1,197.4. Nakisi ya akaunti ya sasa ni USD milioni 2,397.5; bei ya mafuta ilifika USD 102.3 kwa pipa.
Sera: Kiwango cha Benki Kuu (CBR) 6.25%; mfumuko wa bei 4.3%, ndani ya lengo la 3–5%. Mapendekezo: kulipa malimbikizo, kupendelea mikopo nafuu na ya shilingi, na kuimarisha akiba wakati bei ya dhahabu iko juu.
Chanzo: BoT Monthly Economic Review, Oktoba 2026; mahesabu ya TICGL/TERI. Wasiliana: economist@ticgl.com.