Tanzania National Debt Overview

February 6, 2026

Tanzania National Debt Overview 2025-2026 | Complete Analysis & Statistics | TICGL Tanzania National Debt Overview Comprehensive Analysis of Tanzania's Public Debt Structure and Sustainability Data as of December 2025 | Source: Bank of Tanzania & TICGL Economic Research Home › TICGL Economic › Tanzania National Debt Overview Executive Summary Tanzania's economy has demonstrated robust […]

Tanzania National Debt Overview 2025-2026 | Complete Analysis & Statistics | TICGL

Executive Summary

Tanzania's economy has demonstrated robust growth and resilience in recent years, positioning it as one of Sub-Saharan Africa's stronger performers. Drawing from the Bank of Tanzania's January 2026 Monthly Economic Review and supplementary data, this analysis provides an overview of key economic indicators, followed by a detailed examination of the national debt as of December 2025. The focus is on debt's role in supporting development, its sustainability, associated risks, and policy implications. Projections for 2026 suggest continued growth, albeit with vigilance needed on external vulnerabilities.

Total National Debt

TZS 134.9T

≈ USD 50.8 Billion

External Debt Share

69.5%

TZS 93.7 Trillion

Domestic Debt Share

30.5%

TZS 37.9 Trillion

GDP Growth (Q3 2025)

6.4%

Up from 6.1% in Q3 2024

Recent Economic Performance

Tanzania's domestic economy maintained strong momentum in 2025, with real GDP growth in mainland Tanzania accelerating to 6.4% in the third quarter, up from 6.1% in the corresponding period of 2024. This expansion was driven by sustained public and private investments in key sectors, including agriculture (contributing significantly to growth), mining and quarrying, construction, and financial and insurance services.

Inflation remained subdued and within targets, with headline inflation at 3.6% in December 2025 (up from 3.1% a year earlier but still within the national 3-5% range, EAC's ≤8%, and SADC's 3-7%). The uptick was primarily due to seasonal food price pressures, with food inflation rising to 6.7%. Core inflation eased to 2.5%, reflecting lower prices for processed goods and fuels amid declining global commodity prices (e.g., crude oil averaged USD 61 per barrel in December 2025).

Monetary conditions supported growth, with the Central Bank Rate held at 5.75% to foster recovery in a low-inflation environment. Extended broad money supply (M3) grew by 25.8% year-on-year in December 2025, fueled by private sector credit expansion of 23.5%. Foreign reserves rose to USD 6,329 million, covering 4.9 months of imports—above national and regional benchmarks.

The external sector improved, with the current account deficit narrowing to USD 2,015.5 million in 2025 from USD 2,379.8 million in 2024, driven by a 10.2% increase in goods and services exports to USD 17,599.2 million (led by gold, manufactured goods, and tourism). Imports grew modestly by 4.9% to USD 17,826.1 million, dominated by intermediate and capital goods for production and investment.

Government budgetary operations in October 2025 showed revenue at TZS 3,080.2 billion (4.4% below target but with strong tax collections), and expenditure at TZS 4,168.6 billion, balancing recurrent and development needs.

Key Economic Insight: These indicators reflect a resilient economy benefiting from global recovery, accommodative policies, and investment in infrastructure. However, global risks like trade tensions and commodity volatility (e.g., gold at USD 4,309 per troy ounce) could impact momentum.

1. Total National Debt Stock

As of December 2025, Tanzania's total national debt stock stood at TZS 134.9 trillion (approximately USD 50.8 billion at an exchange rate of around TZS 2,650 per USD), marking a gradual increase aligned with development financing needs. The debt is predominantly external, supporting long-term infrastructure and growth initiatives, but with a growing domestic component to reduce foreign exchange risks.

Table 1: National Debt Summary (December 2025)

Debt Category	Amount (TZS trillion)	Share (%)
Total National Debt	134.9	100.0
External Debt	93.7	69.5
Domestic Debt	37.9	30.5

Figure 1: National Debt Composition by Category

Figure 2: National Debt Distribution (TZS Trillion)

Interpretation: Tanzania's national debt is external-debt dominant, although domestic debt remains a significant component of public financing. The 69.5% external debt share reflects the country's reliance on concessional and semi-concessional financing from multilateral institutions for infrastructure development, while the 30.5% domestic debt component provides a crucial cushion against foreign exchange volatility.

2. External Debt Stock

The external-heavy composition exposes the economy to exchange-rate fluctuations, but much of it is concessional or semi-concessional from multilateral institutions (58.2% of external debt), bilateral lenders (4.3%), and commercial sources (35.5%). The central government is the main borrower, with disbursements in December 2025 totaling USD 191.1 million, primarily for balance of payments support (22.8% of outstanding debt) and transport/telecommunications (21.7%). The US dollar dominates (66.0%), followed by the euro (17.7%).

Table 2: External Debt Overview (December 2025)

Indicator	Value
Total External Debt	TZS 93.7 trillion (USD 35.3 billion)
Share of National Debt	69.5%
Main Borrower	Central Government (82.8%)
Main Currency	US Dollar (66.0%)

Figure 3: External Debt by Creditor Type

Figure 4: External Debt Currency Composition

External Debt Sectoral Allocation

Sector	Share of External Debt (%)
Balance of Payments Support	22.8%
Transport & Telecommunications	21.7%
Other Infrastructure & Development	55.5%

Key Insight: External debt is largely concessional and semi-concessional, supporting long-term development but exposing the economy to exchange-rate risk. The dominance of multilateral creditors (58.2%) provides favorable terms and longer repayment periods, while the USD concentration (66.0%) necessitates strong foreign exchange reserves management. The central government's 82.8% share reflects strategic borrowing for critical infrastructure that drives economic growth.

3. Domestic Debt Stock

Domestic debt, fully denominated in TZS, declined slightly by 1.2% month-on-month to TZS 37.9 trillion, with Treasury bonds dominating (81.6% of instruments). Commercial banks (29.0%) and pension funds (27.3%) hold the majority, enhancing monetary policy transmission and market depth.

Table 3: Domestic Debt Overview (December 2025)

Indicator	Value
Total Domestic Debt	TZS 37.9 trillion
Share of National Debt	30.5%
Dominant Instrument	Treasury Bonds (81.6%)
Currency Denomination	Tanzania Shilling (100%)

Figure 5: Domestic Debt Holders Distribution

Figure 6: Domestic Debt by Instrument Type

Domestic Debt Holders Breakdown

Holder Category	Share (%)	Significance
Commercial Banks	29.0%	Primary institutional investors
Pension Funds	27.3%	Long-term stable investors
Insurance Companies & Others	43.7%	Diverse institutional base

Interpretation: Domestic debt is fully TZS-denominated, reducing foreign exchange risk and strengthening monetary policy transmission. The dominance of Treasury bonds (81.6%) provides long-term financing stability, while the diversified holder base—led by commercial banks and pension funds—deepens the domestic capital market and ensures sustainable debt absorption capacity. The 100% local currency denomination shields Tanzania from external currency shocks and maintains sovereign control over debt management.

4. National Debt Composition by Instrument

By instrument, the portfolio emphasizes long-term stability. The composition of Tanzania's public debt demonstrates a strategic balance between long-term development financing and short-term liquidity management. External loans constitute the largest component at 69.5%, while domestic instruments—primarily Treasury bonds at 22.9%—provide crucial support for government financing needs.

Table 4: Public Debt by Instrument Type (December 2025)

Instrument	Amount (TZS trillion)	Share (%)
Treasury Bonds	30.9	22.9
Treasury Bills	2.0	1.5
External Loans	93.7	69.5
Other Domestic Liabilities	8.3	6.1
Total	134.9	100.0

Figure 7: National Debt Composition by Instrument Type

Figure 8: Debt Distribution by Instrument (TZS Trillion)

Debt Instrument Maturity Profile & Characteristics

Instrument Type	Typical Maturity	Primary Purpose	Risk Profile
Treasury Bonds	2-25 years	Long-term development financing	Low interest rate risk
Treasury Bills	35-364 days	Short-term cash flow management	Higher refinancing risk
External Loans	15-30 years (avg)	Infrastructure & development projects	FX and currency risk
Other Domestic Liabilities	Variable	Contingent liabilities & guarantees	Moderate fiscal risk

5. Debt Servicing Burden

Debt service in December 2025 totaled TZS 956.6 billion, split nearly evenly between external (TZS 468.6 billion, or USD 183.5 million) and domestic (TZS 488.0 billion). This consumes a notable share of government resources—estimated at around 20-25% of revenue based on recent trends—highlighting the need for fiscal prudence. However, servicing remains manageable, with principal repayments (USD 136.8 million external) outweighing interest.

Table 5: Debt Service Payments (December 2025)

Component	Amount (TZS billion)	USD Equivalent	Share (%)
External Debt Service	468.6	USD 183.5 million	49.0
Domestic Debt Service	488.0	-	51.0
Total Debt Service	956.6	USD 361.7 million	100.0

Figure 9: Monthly Debt Service Distribution (December 2025)

Figure 10: Estimated Annual Debt Service Trend (2023-2026)

Debt Service Sustainability Indicators

Indicator	Value	Assessment
Debt Service to Revenue Ratio	20-25%	Moderate burden
External Debt Service (Monthly)	USD 183.5 million	Manageable with reserves
Domestic Debt Service (Monthly)	TZS 488.0 billion	Sustainable absorption
Principal vs Interest (External)	Principal-heavy	Lower future burden

Interpretation: Debt servicing consumes a significant share of government resources, reinforcing the importance of prudent borrowing. The nearly balanced split between external and domestic debt service (49% vs 51%) demonstrates diversified obligations. The 20-25% debt service-to-revenue ratio, while substantial, remains within sustainable bounds for a developing economy investing heavily in infrastructure. The principal-heavy structure of external debt service indicates favorable concessional terms that reduce long-term interest burden.

Key Debt Servicing Insights

Monthly Service: TZS 956.6 billion represents approximately 8.4% of total monthly government revenue
External Component: USD 183.5 million is covered by 4.9 months of foreign reserves (USD 6,329 million)
Domestic Capacity: Strong domestic financial sector absorption ensures smooth debt service execution
Sustainability: Current trajectory remains manageable with GDP growth at 6.4% outpacing debt accumulation

6. Debt Risk Profile and Sustainability

Tanzania's debt risk is assessed as moderate overall, with sustainability deemed manageable under current trajectories. The comprehensive risk assessment evaluates multiple dimensions including currency exposure, refinancing needs, interest rate sensitivity, and macroeconomic fundamentals. Key dimensions include:

Table 6: National Debt Risk Assessment (December 2025)

Risk Dimension	Assessment	Key Factors
Currency Risk	Moderate–High	69.5% external debt, USD-dominated (66.0%)
Refinancing Risk	Moderate	Long-term instruments dominate portfolio
Interest Rate Risk	Moderate	Concessional terms mitigate exposure
Debt Sustainability	Manageable	Low to moderate distress risk
FX Reserve Coverage	Adequate	4.9 months of imports coverage

Figure 11: Debt Risk Profile Assessment

Official analyses indicate low to moderate risk of external debt distress. The debt-to-GDP ratio stood at around 40-52% in 2025 (varying by source), well below thresholds for developing economies (e.g., 55-60%). Non-linear studies suggest debt supports growth below critical thresholds but could destabilize if unchecked. However, borrowing dependency has risen significantly since 2020, with total debt up 15% to TZS 107.7 trillion by March 2025, raising concerns amid potential aid disruptions (e.g., from EU due to political factors). IMF projections for 2026 forecast 6.3% real GDP growth and 3.5% inflation, supporting sustainability if exports (e.g., gold, tourism) continue expanding.

Debt Sustainability Metrics & Thresholds

Indicator	Current Level (2025)	Threshold	Status
Debt-to-GDP Ratio	40-52%	55-60% (developing economies)	✓ Safe
External Debt Service to Exports	~12.5%	15-20%	✓ Comfortable
FX Reserves Coverage	4.9 months	3.0 months minimum	✓ Strong
Real GDP Growth Rate	6.4% (Q3 2025)	5.0%+ desired	✓ Robust

7. Overall Assessment and Policy Perspective

Tanzania's national debt remains development-oriented, financing infrastructure (e.g., transport, energy) that underpins 6%+ growth and poverty reduction. External exposure is high but buffered by reserves and concessional terms.

Table 7: National Debt Snapshot (December 2025)

Indicator	Status	Trend
Debt Growth	Gradual (0.1% monthly decline in USD terms Dec 2025)	↔ Stable
External Exposure	High (69.5%)	↑ Increasing
Domestic Market Depth	Improving (TZS-denominated, bond-focused)	↑ Strengthening
Fiscal Sustainability	Stable (service ~20-25% of revenue)	↔ Maintained
Macroeconomic Risk	Contained (growth offsets risks)	↓ Improving

Figure 12: Debt-to-GDP Ratio Trend (2020-2026 Projected)

Key Takeaway (Policy Perspective): Tanzania's national debt remains manageable and largely development-oriented, with a strong external component supporting infrastructure and growth. However, the high share of external debt highlights the need for:

Continued export growth – Targeting 10-12% annually to strengthen foreign exchange earnings
Maintaining TZS stability – Depreciation limited to 1.3% in 2025 demonstrates effective monetary policy
Careful selection of new borrowing – To preserve long-term sustainability and avoid non-concessional debt spikes

2026 Outlook & Risk Factors

For 2026, potential shortfalls in concessional loans (10-15%) could push reliance on commercial debt, elevating risks. Enhancing domestic revenue (e.g., through tax reforms) and fiscal discipline will preserve space for investments in agriculture, manufacturing, and tourism—critical for inclusive development.

Bottom Line: If managed well, debt can accelerate Tanzania's transition to middle-income status, but vigilance against global shocks (trade tensions, commodity volatility, climate impacts) is essential.

Strategic Recommendations for Debt Management

Revenue Mobilization

Enhance tax collection efficiency and broaden the tax base to reduce borrowing dependency while maintaining fiscal space for development.

Export Diversification

Expand beyond traditional exports (gold, tourism) into manufacturing and value-added services to strengthen forex earnings and debt servicing capacity.

Domestic Market Development

Deepen local capital markets to increase domestic debt absorption capacity and reduce reliance on external financing with FX exposure.

Concessional Financing

Prioritize concessional and semi-concessional loans over commercial debt to maintain favorable interest rates and extended repayment periods.

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