As of February 2025, Tanzania’s total public debt reached TZS 109.92 trillion (approximately USD 42.68 billion), with external debt accounting for 73.4% (TZS 80.73 trillion) and domestic debt 26.6% (TZS 29.19 trillion). Given a population of around 69–70 million, this translates to an average debt burden of TZS 1.57–1.59 million per citizen. The high proportion of external debt—largely denominated in USD—underscores the importance of prudent fiscal management to ensure long-term sustainability amid exchange rate and global interest rate fluctuations.

Tanzania's total debt (external + domestic) as of February 2025, including figures in Tanzania shillings (TZS), along with an estimate of debt per citizen based on a population of 69–70 million:

Tanzania’s Total Public Debt Profile – February 2025

🔸 1. Total Public Debt

• Total Public Debt Stock:
  • USD: $42.68 billion
  • TZS: Approx. TZS 109.98 trillion
    (Using an exchange rate of TZS 2,577.35/USD, as reported in Feb 2025)

🔹 2. Breakdown of Public Debt

Debt per Citizen Estimate

Assuming a population between 69 million and 70 million, here’s how much debt is effectively held per Tanzanian:

What This Tells Us

• Tanzania’s public debt is growing, driven mainly by external borrowing (over 73% of total).
• The average debt burden per Tanzanian citizen is around TZS 1.57–1.59 million, showing the scale of fiscal responsibility required over time.
• While this debt has supported key infrastructure and development projects, it also raises questions about long-term repayment capacity and debt sustainability, especially with most external debt denominated in USD (over 65%).

The total public debt figures and debt per citizen tell us about Tanzania’s current financial situation:

What It Tells Us

1. High Debt Burden
   With total public debt reaching TZS 109.92 trillion (≈USD 42.68 billion), Tanzania has a substantial financial obligation—mostly owed to external creditors (73.4% of the total). This shows that the country relies heavily on foreign borrowing, which exposes it to currency risks, especially if the shilling weakens further.
2. Heavy Debt per Capita
   At an average of TZS 1.57–1.59 million per citizen, the debt burden per person is significant, especially considering that Tanzania’s GDP per capita is under TZS 4 million. This implies that each citizen would owe nearly 40% of their annual income if the national debt were to be evenly distributed—a high ratio for a developing economy.
3. Growing Domestic Financing
   While still smaller than external debt, domestic debt (26.6%) is increasing steadily. This shows that the government is also tapping into local capital markets and institutional investors, such as commercial banks and pension funds, which can strengthen domestic financial systems but also crowd out private sector lending.
4. Debt Sustainability Is Crucial
   The current debt size is manageable if the borrowed funds are used for productive investments—like infrastructure, health, and education—that generate future returns. However, the growing reliance on debt financing calls for tight fiscal discipline and improved revenue collection to maintain debt sustainability and avoid excessive repayment pressures.

In January 2025, Tanzania's central government recorded total revenue of TZS 2,697.8 billion, achieving 98.3% of the monthly target. Tax revenue reached TZS 2,222.3 billion, slightly exceeding the target by 0.3%, signaling strong tax administration. However, non-tax revenue underperformed at TZS 347.8 billion against a target of TZS 413.9 billion. Total expenditure stood at TZS 3,576.1 billion, with recurrent spending consuming TZS 2,358.0 billion and development expenditure totaling TZS 1,218.1 billion. This created a budget deficit of TZS 878.3 billion, underscoring growing fiscal pressure despite stable revenue performance.

Government Budgetary Operations in Tanzania focusing on Central Government Revenues, Expenditure, and the Budget Deficit

1. Central Government Revenues (January 2025)

• Total Revenue: TZS 2,697.8 billion
  • This was 98.3% of the monthly target.
• Central Government Revenue: TZS 2,570.1 billion
  • 97.7% of the target.
• Tax Revenue: TZS 2,222.3 billion
  • Exceeded the monthly target by 0.3% due to sustained tax administration efforts.
• Non-Tax Revenue: TZS 347.8 billion
  • Lower than the estimated TZS 413.9 billion.

This shows strong tax revenue collection but a shortfall in non-tax revenue.

2. Central Government Expenditure (January 2025)

• Total Expenditure: TZS 3,576.1 billion
  • Recurrent Expenditure: TZS 2,358.0 billion
  • Development Expenditure: TZS 1,218.1 billion
    • Includes infrastructure, social services, and development projects.

The government prioritized development while maintaining high recurrent spending.

3. Budget Deficit

To compute the budget deficit for January 2025:

Deficit = Total Expenditure - Total Revenue
= 3,576.1 billion - 2,697.8 billion
= TZS 878.3 billion

🧮 Budget Deficit: TZS 878.3 billion in January 2025
This suggests the government spent more than it collected, creating a financing gap.

Tanzania’s Government Budget Operation in January 2025:

Key Takeaways & Interpretation

1. Strong Revenue Performance – Especially in Taxes

• The government collected 97.7% of its revenue target, and tax revenue slightly exceeded its goal.
• ✅ This indicates effective tax collection efforts and a stable tax base, which is good for fiscal sustainability.
• ❌ However, non-tax revenues fell short, suggesting issues in collecting fees, dividends from state enterprises, or other sources.

2. High Government Spending

• The government spent TZS 3.6 trillion, higher than its revenue collection.
• A significant portion (TZS 2.36 trillion) went to recurrent expenditure (salaries, interest payments, etc.).
• Development spending was also strong, indicating continued investment in infrastructure and growth-supportive areas.

3. Large Budget Deficit

• The deficit of TZS 878.3 billion shows the government spent significantly more than it earned.
• This implies the need to borrow domestically or externally to cover the gap.

What It Means Overall:

• Positive: Tax administration is working well; government is prioritizing development.
• Risk: Persistent budget deficits, if not carefully managed, can lead to higher debt levels, more interest payments, and reduced room for future development spending.

In the first nine months of the 2024/25 fiscal year, the Tanzania Revenue Authority (TRA) collected TZS 24.05 trillion, surpassing its target of TZS 23.21 trillion by TZS 0.84 trillion — a performance rate of 103.62%. Compared to the same period in 2023/24, this marks a 17% increase in revenue, highlighting the success of tax reforms, improved compliance, and administrative efficiency. With projected annual collections expected to exceed TZS 32 trillion, domestic revenue now significantly outpaces annual foreign development support (typically TZS 7–8 trillion), positioning TRA as the central force in financing Tanzania’s economic stability and development.

1. Strong Tax Revenue Performance Supports Budget Execution

In January 2025, tax revenue collections reached TZS 2,222.3 billion, slightly exceeding the government’s target by 0.3%. This enabled the government to finance 62% of its total expenditure of TZS 3,576.1 billion using domestic revenue — a clear demonstration of the growing role of TRA in budget sustainability.

Interpretation: With tax revenue making up over 80% of total government revenue, TRA is already the pillar of fiscal financing, especially in a context where development partners' grants and loans cover only TZS 7–8 trillion annually.

2. Record-Breaking Collections Show TRA’s Growing Impact

Between July 2024 and March 2025, TRA collected TZS 24.05 trillion, surpassing its 9-month target of TZS 23.21 trillion — an impressive 103.62% performance rate. This marks a 17% increase from the TZS 20.55 trillion collected in the same period of 2023/24.

✅ Historical growth: In just 4 years, revenue collections have grown by 77% — from TZS 13.59 trillion in FY 2020/21 to TZS 24.05 trillion in FY 2024/25.
🔑 Implication: If sustained, TRA could reach or even surpass TZS 32 trillion annually, covering nearly the entire annual recurrent government budget, and reducing reliance on external debt or aid.

3. Efficient Systems and Reforms Are Paying Off

Key structural and technological reforms — like:

• TANCIS (Customs System),
• EFDs enforcement, and
• Upcoming IDRAS (Domestic Revenue System),

...are making TRA more efficient and transparent. For instance, during Q3 (Jan–Mar 2025) alone, TRA collected TZS 7.53 trillion, exceeding the target of TZS 7.43 trillion by TZS 0.10 trillion (100 billion).

4. Broader Economic Role – Reducing Deficits

In January 2025, the government faced a budget deficit of TZS 878.3 billion. However, TRA’s ability to exceed targets by TZS 100 billion in Q3 shows it can help narrow future fiscal gaps through robust domestic financing.

📌 Example: If TRA consistently overperforms by even TZS 100 billion per quarter, this could amount to TZS 400–500 billion annually, directly offsetting a significant portion of the deficit.

5. Reducing Dependency on Foreign Support

With development support (grants + loans) hovering between TZS 7–8 trillion annually, and TRA potentially generating TZS 32+ trillion, domestic revenue is on the path to becoming Tanzania’s primary engine of development financing.

TRA has demonstrated its potential to be the central engine of Tanzania’s domestic resource mobilization. With annual revenue likely to exceed TZS 32 trillion, and steady quarterly overperformance (e.g., Q3: 101.32%), TRA can reduce the country’s dependency on external aid, close budget deficits, and provide sustainable funding for key development priorities.

If this momentum continues, Tanzania’s economy will shift from externally supported to domestically driven — powered by TRA’s performance and smart fiscal management.

Table: TRA Revenue Performance and Government Budget Comparison

The Tanzania Revenue Authority (TRA) has emerged as a critical engine of domestic resource mobilization. From July 2024 to March 2025, TRA collected TZS 24.05 trillion, exceeding its target of TZS 23.21 trillion with a performance rate of 103.62%. Compared to the same period last year (TZS 20.55 trillion), this reflects a 17% growth. Notably, this figure is three times higher than the typical annual foreign support of TZS 7–8 trillion, demonstrating TRA’s central role in funding national priorities and reducing reliance on external aid.

What the Data Tells Us about TRA and Tanzania’s Budget Operations

1. TRA Is Becoming the Backbone of Tanzania’s Public Finances

The Tanzania Revenue Authority (TRA) has demonstrated exceptional performance by collecting TZS 24.05 trillion in just 9 months, surpassing its target by TZS 0.84 trillion. This performance means that TRA now covers more than 60% of the government’s total expenditure — especially the recurrent budget, which relies heavily on tax revenue.

💡 It shows Tanzania is increasingly funding its own budget — a sign of economic maturity and self-reliance.

2. TRA’s Growth Is Outpacing Economic Challenges

Despite global and regional economic challenges, TRA’s revenue has grown by:

• 17% year-on-year (Jul–Mar),
• 13.47% growth in Q3 alone,
• and 77% over four years (from TZS 13.59T in 2020/21 to TZS 24.05T now).

💡 This signals better tax compliance, improved systems, and strong policy leadership under President Samia.

3. Budget Deficit Still Exists but Can Be Reduced Domestically

The budget deficit in January 2025 was TZS 878.3 billion, but TRA had already overcollected TZS 100 billion in Q3. If this performance continues consistently across quarters, TRA alone could contribute TZS 400–500 billion annually to closing the deficit — nearly half of the gap.

💡 This shows that strategic tax reforms and improved administration can reduce borrowing needs.

4. Domestic Revenue May Replace Foreign Dependency

Currently, Tanzania receives TZS 7–8 trillion annually in loans and grants for development. If TRA hits its projection of TZS 32 trillion, it will collect 4–5 times more than what donors give — effectively making domestic revenue the main engine for development.

💡 Tanzania is shifting from aid-dependence to self-driven development — a major policy milestone.

5. Trust, Technology, and Taxpayer Engagement Are Working

TRA’s success is also due to:

• Better use of digital systems (TANCIS, EFDs, IDRAS),
• Weekend and Thursday services,
• Listening to taxpayers and improving relationships.

💡 People are paying taxes more willingly — which is critical for long-term sustainability.

✅ Final Takeaway:

This data tells us that Tanzania is building a self-reliant economy, and TRA is the cornerstone of that transformation. With good leadership, effective systems, and strong taxpayer engagement, domestic revenue is proving to be more stable and sustainable than foreign aid or debt.

As of February 2025, Tanzania’s external debt stock reached USD 31.31 billion, reflecting a monthly increase of USD 393.4 million (1.3%). The central government accounts for 79.7% of the total, highlighting its leading role in borrowing to fund infrastructure and social projects. Funds are mainly allocated to transport and telecommunications (21.6%), education and social welfare (16.3%), and energy and mining (13.7%). However, with 65.8% of the debt denominated in US dollars, the country remains exposed to exchange rate volatility, necessitating prudent fiscal and monetary management.

Tanzania’s debt development, Tanzania’s Monthly Economic Review – March 2025, focusing on external debt.

Tanzania Debt Development (as of February 2025)

1. Total External Debt Stock

• Total External Debt Stock (Public and Private):
  ➤ USD 31,312.8 million (USD 31.31 billion)
• Month-to-Month Change:
  ➤ An increase of USD 393.4 million (1.3%) compared to January 2025.
• Reason for Increase:
  ➤ Mainly due to new disbursements and exchange rate valuation effects.

2. External Debt Stock by Borrower

Key Insight:
The Central Government holds the majority share of external debt, nearly 80%, showing that debt is primarily used to finance public infrastructure and development projects.

3. Disbursed Outstanding Debt by User of Funds

Key Insight:
The largest portion of external debt is invested in transport, telecom, education, and energy, which are strategic sectors for long-term development.

4. Debt by Currency Composition

Key Insight:
The dominance of the US Dollar (nearly 66%) exposes Tanzania to foreign exchange risk if the dollar strengthens further. However, diversification into other currencies like the Euro, Yuan, and Yen offers some buffer.

Summary:

• Tanzania’s external debt stock reached USD 31.31 billion in February 2025.
• 79.7% of it is held by the central government.
• Major debt usage goes to transport, education, energy, and finance.
• USD remains the dominant currency (65.8%), increasing exposure to exchange rate movements.

Tanzania’s external debt development tells us:

What the Figures Tell Us

1. Heavy Reliance on External Financing
   With USD 31.31 billion in total external debt, Tanzania continues to rely significantly on foreign borrowing, especially from multilateral and bilateral sources, to fund its development agenda.
2. Government is the Main Borrower
   The central government holds nearly 80% of the external debt. This indicates that most of the borrowing is channeled into large-scale public projects like infrastructure, energy, and social services—reflecting the government's role in driving economic development.
3. Strategic Allocation of Debt
   A large share of disbursed debt is used in productive sectors:
   • Transport and telecom (21.6%)
   • Social welfare and education (16.3%)
   • Energy and mining (13.7%)
     This shows a development-oriented borrowing strategy, aiming to boost long-term economic productivity.
4. Vulnerability to Exchange Rate Risk
   Since 65.8% of the debt is denominated in US dollars, any strengthening of the dollar could raise the cost of debt servicing. This makes exchange rate management critical for debt sustainability.
5. Gradual but Steady Growth in Debt Stock
   The month-on-month increase of USD 393.4 million (1.3%) suggests a controlled growth in borrowing, possibly linked to disbursements for ongoing projects and valuation changes.

🧠 Bottom Line: Tanzania’s external debt is focused on development, government-driven, and largely USD-denominated, which helps fund national priorities but also requires careful debt and currency risk management to remain sustainable.

As of February 2025, Tanzania’s government domestic debt stood at TZS 29.19 trillion, marking a monthly increase of TZS 195.7 billion (0.7%). The debt is largely held by institutional investors, with commercial banks accounting for 36.4%, followed by the Bank of Tanzania at 30.2%, and pension funds at 22.1%. Other creditors, including insurance companies (3.7%), other official entities (4.2%), and individual investors (3.4%), make up a smaller share. This distribution reflects a stable and concentrated debt market, dominated by institutions seeking safe and long-term returns.

Tanzania’s domestic debt, focusing on government domestic debt by creditor category, as of February 2025.

Tanzania’s Domestic Debt Profile

 1. Total Domestic Debt Stock

• As of end-February 2025, the government’s domestic debt stock stood at TZS 29,191.6 billion (approximately USD 11.37 billion).
• This marks a monthly increase of TZS 195.7 billion, equivalent to a 0.7% rise from January 2025.
• The increase was primarily due to new issuances of Treasury bonds to finance government operations and refinance maturing obligations.

2. Domestic Debt by Creditor Category

What This Tells Us

1. Commercial Banks are the largest holders of government domestic debt, owning over one-third (36.4%). This reflects strong participation of banks in government securities due to safety and predictable returns.
2. The Bank of Tanzania (BoT) follows closely with 30.2%, indicating its supportive role in managing liquidity and stabilizing the market.
3. Pension Funds also play a significant role, holding 22.1% of domestic debt, which aligns with their long-term investment needs and provides the government with a stable source of funding.
4. The rest—insurance companies, other official entities, and individuals—collectively hold less than 12%, showing room for further market deepening and diversification.

Summary Insight

Tanzania’s domestic debt is largely held by institutional investors, ensuring stability and predictability in the debt market. The dominance of banks and pension funds also suggests that government securities are a preferred low-risk investment for major financial institutions.

Tanzania’s government domestic debt by creditor category:

What the Figures Reveal

1. Strong Institutional Demand
   The fact that commercial banks (36.4%), Bank of Tanzania (30.2%), and pension funds (22.1%) hold nearly 89% of all domestic debt shows that the government relies heavily on large institutional investors for its domestic financing needs. This provides predictability and low volatility in debt markets.
2. Government Debt is Seen as a Safe Haven
   The high concentration of debt in banks and pension funds suggests that government securities are considered low-risk, making them attractive for institutions managing long-term savings or liquidity buffers.
3. Limited Retail and Private Participation
   With only 3.4% of debt held by individuals and smaller investors, there's an opportunity to expand public participation in government securities through retail bonds and savings initiatives—potentially deepening the capital market.
4. Bank of Tanzania’s Support Role
   The central bank’s 30.2% stake also shows its key role in monetary operations, such as liquidity support and market stabilization, especially when commercial demand is weak or during refinancing periods.

🧾 Bottom Line:

Tanzania’s domestic debt market is stable, institutional-heavy, and closely tied to public finance management. However, to foster broader financial inclusion and capital market development, there’s space to diversify the creditor base beyond banks and pension funds.

As of February 2025, Tanzania’s gross official foreign reserves stood at USD 5,450.5 million, slightly down from USD 5,528.1 million in January, reflecting a 1.4% monthly decrease. Despite this dip, the reserves remained robust, covering 4.9 months of projected imports of goods and services, which is well above the East African Community benchmark of 4.5 months. This solid reserve position highlights the country's resilience to external shocks and its ability to stabilize the exchange rate and support key economic activities.

Tanzania Monthly Economic Review – March 2025, the foreign currency reserves of Tanzania remain adequate and stable, ensuring the country’s ability to support import needs and stabilize the shilling when needed.

 Tanzania’s Foreign Currency Reserves – February 2025

Reserve Level:

• Gross Official Reserves (February 2025):
  ➤ USD 5,450.5 million (USD 5.45 billion)

Import Cover:

• These reserves are sufficient to cover about 4.9 months of projected imports of goods and services, which is above the East African Community (EAC) benchmark of 4.5 months.

Comparison:

➤ Change:

• Reserves declined slightly by USD 77.6 million (≈1.4%), likely due to external debt repayments or forex interventions to stabilize the shilling.

What This Tells Us:

1. Reserves Remain Healthy:
   Even with the slight decline, reserves are still well above the regional safety threshold, meaning Tanzania can comfortably meet its import and external payment needs.
2. Buffer Against Shilling Volatility:
   The Bank of Tanzania has enough reserves to intervene in the forex market when needed, which helps explain the stable TZS/USD exchange rate despite higher demand for USD.
3. Macroeconomic Stability Signal:
   Sustained reserves above 4.5 months of import cover signal strong external sector management and improve investor confidence.

✅ Bottom Line:

Tanzania’s foreign currency reserves stood at USD 5.45 billion in February 2025, enough for 4.9 months of imports, underscoring the country's resilience to external shocks and its capacity to support economic stability.

In the year ending February 2025, Tanzania’s external sector showed remarkable improvement, with the current account deficit narrowing to USD 2.81 billion from USD 4.43 billion in the previous year. This positive shift was driven by a rise in total exports to USD 14.29 billion, up from USD 12.23 billion, supported by increased earnings from gold (USD 2.87 billion) and traditional exports like cashew nuts and coffee. Tourism earnings surged to USD 3.25 billion following 1.8 million international arrivals, marking a 33.6% rise. Meanwhile, the balance of payments deficit declined significantly to USD 58.6 million, signaling enhanced resilience in Tanzania’s foreign exchange position.

Tanzania’s External Sector Performance – February 2025

🔸 1. Current Account

• The current account deficit narrowed to USD 2.81 billion for the year ending February 2025, down from USD 4.43 billion in February 2024.
• This improvement is attributed to increased export earnings, particularly from services like tourism and traditional exports.

🔹 2. Exports of Goods and Services

• Total exports amounted to USD 14.29 billion, up from USD 12.23 billion in the previous year.

Breakdown:

• Goods exports:
  • USD 8.22 billion (↑ 4.3%)
  • Gold remained dominant at USD 2.87 billion
  • Traditional exports surged by 46.5%, led by:
    • Cashew nuts: USD 426.2 million
    • Coffee: USD 282.4 million
    • Cotton: USD 152.9 million
• Services exports:
  • USD 6.07 billion (↑ 36.3%)
  • Mainly driven by tourism and transport services

🔹 3. Imports of Goods and Services

• Total imports stood at USD 17.91 billion, slightly up from USD 17.69 billion.

Composition:

• Goods imports:
  • USD 14.42 billion
  • Driven by:
    • Transport equipment (USD 1.92 billion)
    • Industrial transport machinery (USD 1.72 billion)
    • Refined petroleum (USD 3.66 billion)
• Services imports:
  • USD 3.49 billion

🔸 4. Balance of Payments (BoP)

• The overall Balance of Payments recorded a deficit of USD 58.6 million, a sharp improvement from USD 713.2 million deficit in the year ending February 2024.
• This positive shift reflects growth in exports, tourism recovery, and stable inflows from foreign investments and grants.

 5. Tourism Sector Update

• Tourism receipts rose to USD 3.25 billion, up by 33.6% from the previous year.
• This growth was supported by an increase in tourist arrivals, reaching 1.8 million visitors, driven by:
  • Eased travel restrictions
  • Global tourism recovery
  • Improved destination marketing

What This Tells Us

• Tanzania's external sector is rebounding strongly, especially through tourism and traditional exports.
• The narrowing of the current account deficit and improved BoP position reflect a healthier external environment.
• However, the country remains vulnerable to import-related pressures, particularly on fuel and industrial goods.

Key Takeaways: What It Tells Us

1. Improving External Balance
   Tanzania's current account deficit narrowed significantly from USD 4.43 billion to USD 2.81 billion, indicating a stronger trade performance. This shows the country is earning more foreign exchange through exports and services like tourism, while managing its import bill.
2. Export Growth Is Driving Recovery
   Exports rose to USD 14.29 billion (from USD 12.23 billion), boosted by:
   • Gold exports (USD 2.87 billion)
   • Cashew nuts (USD 426.2 million)
   • Coffee and cotton
   • A surge in service exports (USD 6.07 billion), particularly in tourism and transport
3. Tourism Is Back and Booming
   Tourism earned USD 3.25 billion, a 33.6% increase, with 1.8 million visitors. This is a clear sign of post-COVID recovery and improved destination appeal, contributing directly to foreign reserves and job creation.
4. Imports Still High, but Stable
   Imports slightly increased to USD 17.91 billion, mainly due to essential imports like:
   • Refined petroleum (USD 3.66 billion)
   • Transport and industrial machinery This suggests a productive use of imports (e.g., infrastructure or industrialization), not just consumption.
5. Balance of Payments Turning Positive
   The BoP deficit shrank from USD 713.2 million to just USD 58.6 million, showing better foreign exchange management and inflows from investments and grants. This boosts investor confidence and economic stability.

💡 Bottom Line:

Tanzania’s external sector shows resilience and recovery, with exports and tourism leading the way. If this trend continues, it will help strengthen the shilling, foreign reserves, and overall economic stability.

In February 2025, Tanzania’s financial markets showed robust activity, with the government securities market attracting TZS 2.05 trillion in bids—well above the TZS 1.16 trillion accepted—indicating strong investor confidence, especially in long-term Treasury bonds. In the interbank cash market, trading rose to TZS 402.2 billion, up from TZS 362.9 billion in January, while the overnight interest rate inched up to 4.03%, reflecting slight liquidity tightening. Meanwhile, the interbank foreign exchange market saw increased trading, with volume rising to USD 72.9 million from USD 57.2 million, and the Tanzanian shilling depreciated slightly to TZS 2,566/USD from TZS 2,560/USD. These trends suggest a stable yet dynamic financial environment shaped by shifting investment strategies and external demand.

Tanzania Monthly Economic Review – March 2025, Insights on Tanzania’s financial market, focusing on:

1. Government Securities Market
2. Interbank Cash Market
3. Interbank Foreign Exchange Market

1. Government Securities Market (February 2025)

Government securities are used by the government to raise money from investors through Treasury bills (short-term) and Treasury bonds (long-term).

Key Figures:

• Total Government Securities Sold:
  ➤ TZS 1,162.5 billion (down from 1,245.4 billion in January)
• Bids Received:
  ➤ TZS 2,051.6 billion – shows high investor appetite
• Bids Accepted:
  ➤ TZS 1,162.5 billion
• Treasury Bills:
  ➤ Sales dropped to TZS 265.9 billion from TZS 402.2 billion
• Treasury Bonds:
  ➤ Sales increased to TZS 896.6 billion from TZS 843.2 billion

💡 Interpretation:
There’s strong demand for government securities (bids exceeded offers), especially long-term bonds. This suggests that investors have confidence in the government’s stability and prefer long-term instruments, possibly due to higher returns.

2. Interbank Cash Market

This is the market where banks lend to each other on a short-term basis to manage their liquidity.

Key Figures (February 2025):

• Total Volume Traded:
  ➤ TZS 402.2 billion, up from TZS 362.9 billion in January
• Average Overnight Interest Rate:
  ➤ 4.03%, slightly up from 3.92%

💡 Interpretation:
The increase in volume traded shows active liquidity management among banks. The slight rise in interest rates suggests tightening liquidity conditions, but rates remain relatively low, indicating a generally stable money market.

3. Interbank Foreign Exchange Market (IFEM)

This is where commercial banks trade foreign currency (mainly USD) among themselves under Bank of Tanzania oversight.

📊 Key Figures (February 2025):

• Total Traded Volume:
  ➤ USD 72.9 million, up from USD 57.2 million in January
• Exchange Rate (TZS/USD):
  ➤ 2,566.00, slightly depreciated from 2,560.00

💡 Interpretation:
The increase in forex traded volume indicates higher demand and activity in foreign exchange, possibly due to trade or debt service needs. The slight depreciation of the shilling reflects modest pressure on the local currency, potentially from import demand or capital outflows.

Summary Table: Key Financial Market Indicators (February 2025)

Tanzania’s financial markets tell us for February 2025, based on the three key segments:

1. Government Securities Market – Strong Investor Confidence, Shift to Long-Term

• The high volume of bids (TZS 2.05 trillion) compared to what was offered shows strong investor interest in government debt.
• A shift from Treasury bills (short-term) to Treasury bonds (long-term)—from TZS 402.2B to 265.9B for bills and TZS 843.2B to 896.6B for bonds—indicates:
  • Investors prefer long-term investments (possibly due to attractive yields).
  • There is confidence in government fiscal stability and interest rate trends.

What it means:
Investors are locking in longer-term returns, expecting stable or declining interest rates and trusting the government's ability to repay.

2. Interbank Cash Market – Active Liquidity Management

• Volume increased from TZS 362.9B to 402.2B, showing banks are actively lending to one another to manage short-term cash needs.
• The slight rise in the overnight rate from 3.92% to 4.03% suggests mild liquidity tightening, but the rate is still low, meaning the market remains well-supplied with funds.

Banks are liquid and trust each other enough to trade funds, which indicates a stable banking system. The Bank of Tanzania may be carefully managing liquidity to avoid inflation or excessive credit growth.

3. Interbank Foreign Exchange Market – Rising Demand for Forex, Slight Shilling Pressure

• Forex volume jumped from USD 57.2M to USD 72.9M, indicating increased foreign currency demand—possibly due to:
  • Import payments
  • External debt service
  • Corporate demand
• The exchange rate weakened slightly from TZS 2,560/USD to 2,566/USD, showing modest pressure on the Tanzanian shilling.

Demand for US dollars is rising—possibly reflecting stronger import activity, or capital outflows. The slight depreciation suggests moderate currency pressure, but still under control.

Overall Takeaway:

• Tanzania’s financial markets are active and relatively stable.
• The government continues to attract strong investor demand, especially for long-term borrowing.
• Banks are managing liquidity effectively, with low interbank rates.
• Forex activity is increasing, hinting at growing external financial transactions, with slight pressure on the exchange rate.

In February 2025, Tanzania experienced a slight easing in lending rates, with the overall lending rate falling to 15.14% from 15.73% in January—indicating a move toward more affordable credit. At the same time, deposit rates declined, with the 12-month deposit rate dropping to 9.48% from 10.08%, and the negotiated deposit rate easing to 11.40% from 11.80%. Meanwhile, the savings deposit rate remained low at 2.98%, offering limited incentives for household saving. The interest rate spread narrowed to 6.29 percentage points, down from 7.04 a year earlier, reflecting improving efficiency in the financial sector and potentially greater competitiveness among banks.

Interest rates in Tanzania, focusing on lending and deposit interest rates on the Tanzania Monthly Economic Review – March 2025:

1. Lending Interest Rates (February 2025)

• Overall Lending Rate:
  ➤ 15.14%, decreased from 15.73% in January 2025
• Short-Term Lending Rate (Up to 1 year):
  ➤ 15.77%, slightly up from 15.70%
• Negotiated Lending Rate:
  ➤ 13.42%, up from 12.80%

The slight drop in the overall lending rate indicates an easing of credit conditions, potentially aimed at boosting private sector investment. However, the increase in negotiated rates might reflect higher credit risk premiums or tailored credit conditions for larger borrowers.

2. Deposit Interest Rates (February 2025)

• Overall Deposit Rate:
  ➤ 8.13%, slightly down from 8.31% in January
• 12-Month Deposit Rate:
  ➤ 9.48%, down from 10.08%
• Negotiated Deposit Rate:
  ➤ 11.40%, down from 11.80%
• Savings Deposit Rate:
  ➤ 2.98%, marginally up from 2.97%

The declining deposit rates suggest increasing liquidity in the banking system. This could reduce the incentive for savings but might help lower the cost of funds for banks.

3. Interest Rate Spread (February 2025)

• Short-Term Interest Rate Spread:
  ➤ 6.29 percentage points, down from 7.04 in February 2024.

A narrowing spread indicates a reduction in the cost of borrowing relative to deposit returns, signaling improved financial intermediation efficiency and potential support for economic activity through cheaper credit.

Quick Reference Table (Interest Rates, %)

Source: Bank of Tanzania Monthly Economic Review – March 2025​​

What the lending and deposit interest rate figures tell us about Tanzania’s financial and economic environment:

1. Cost of Borrowing Is High, but Decreasing

• Lending rates remain high (15.14% overall), meaning it’s still costly for businesses and individuals to take loans.
• However, the decline from 15.73% to 15.14% shows a gradual easing—likely a monetary policy strategy to stimulate credit for investment and economic growth.

🟢 Implication: The Bank of Tanzania may be trying to support economic activity by making borrowing slightly more attractive.

2. Return on Savings Is Falling

• Deposit rates are dropping slightly—especially the 12-month deposit rate (from 10.08% to 9.48%) and the negotiated deposit rate (from 11.80% to 11.40%).
• The savings deposit rate remains low at around 2.98%, barely enough to beat inflation.

🔴 Implication: There’s less incentive to save, especially for ordinary savers. Money might shift toward spending or investing in assets with better returns (e.g., land, informal lending, or business).

3. Narrowing Interest Rate Spread = Improved Efficiency

• The interest rate spread (difference between lending and deposit rates) is narrowing:
  ➤ 6.29% in Feb 2025, down from 7.04% in Feb 2024.
• This usually signals:
  • Healthier banking competition
  • Lower profit margins for banks per loan
  • Better efficiency in financial intermediation

🟢 Implication: The banking sector may be becoming more competitive and efficient, which is good for the economy, especially for businesses seeking loans.

📊 4. What It Suggests About Monetary Policy

• These movements suggest the central bank is balancing between promoting credit and containing inflation.
• If inflation is under control, they might continue gradual rate reductions to stimulate growth.

In Summary:

In 2023, Tanzania’s tourism sector recorded a remarkable recovery, welcoming 1,809,205 tourists, a 24.3% increase from 1,456,192 in 2022. Tourism earnings surged to USD 3.37 billion, up by 33.2% from USD 2.53 billion the previous year. The United States, France, Germany, the UK, and Italy remained the top source markets. Zanzibar continued to be a major destination, attracting 548,503 tourists, primarily from Europe. These figures highlight tourism’s critical role as a leading contributor to foreign exchange, economic growth, and employment in Tanzania.

Tanzania’s Tourism Sector: A Robust Recovery and Economic Driver

Tourist Arrivals

• In 2023, Tanzania received a total of 1,809,205 tourists, marking an increase of 24.3% compared to 1,456,192 tourists in 2022.
• This growth reflects a strong rebound in the sector following global recovery from the COVID-19 pandemic.

Tourism Earnings

• Earnings from tourism rose significantly to USD 3,368.7 million in 2023, up from USD 2,527.8 million in 2022.
• This represents a 33.2% increase, reinforcing tourism as one of Tanzania’s top sources of foreign exchange.

Source Markets

• The majority of tourists in 2023 came from:
  • United States (largest source market)
  • France
  • Germany
  • United Kingdom
  • Italy
• Tanzania's diverse attractions, including wildlife safaris, Mount Kilimanjaro, Zanzibar beaches, and cultural heritage, continue to attract international visitors.

Zanzibar's Role

• Zanzibar alone welcomed 548,503 tourists in 2023, contributing significantly to the overall national total.
• Tourists to Zanzibar primarily came from Europe (65.9%), led by Italy, France, and Germany.

💡 What This Tells Us

The data shows that Tanzania’s tourism sector is on a strong growth path, recovering well post-pandemic. With a 24.3% increase in arrivals and a 33.2% rise in earnings, tourism is playing a critical role in economic growth, job creation, and foreign exchange inflow. The government’s efforts in marketing, infrastructure development, and service improvements are bearing fruit, though continued investment in sustainability and security will be key to long-term success.

✨ What It Tells Us

1. Tourism Is Rebounding Strongly
   Tanzania saw 1.81 million tourist arrivals in 2023, a 24.3% increase from 2022. This confirms that the sector is recovering fast from the COVID-19 slump and is regaining global attention as a top destination.
2. Significant Increase in Tourism Revenue
   The country earned USD 3.37 billion from tourism in 2023, up from USD 2.53 billion in 2022. That’s a 33.2% increase, showing that not only are more tourists visiting, but they’re also spending more, boosting foreign exchange earnings.
3. Top Source Countries Reflect Global Confidence
   The United States, France, Germany, UK, and Italy were leading tourist sources—highlighting Tanzania’s strong presence in high-value markets. This shows growing international confidence in Tanzania's safety, hospitality, and attractions.
4. Zanzibar Is a Key Contributor
   With 548,503 arrivals, Zanzibar accounts for about 30% of all tourists. European tourists dominate this segment, emphasizing the island’s appeal as a premium destination.
5. Tourism Is Driving the Economy
   As tourism revenue rises, it plays a central role in foreign exchange generation, employment, and supporting local businesses in transport, hospitality, and culture.

📌 Bottom Line:

Tourism in Tanzania is not just recovering—it's accelerating. With strong earnings and increasing arrivals, the sector is a pillar of economic growth and holds great potential for even greater impact with the right investment and policy support.