In March 2025, the Tanzania Shilling showed signs of short-term depreciation, yet maintained overall stability, supported by effective interventions from the Bank of Tanzania. The average exchange rate weakened to TZS 2,650.24 per USD from TZS 2,492.05 in February 2025, reflecting a 6.3% monthly depreciation and an annual depreciation of 3.4%. To manage this pressure, the central bank sold USD 62.3 million in the foreign exchange market, up sharply from USD 24.4 million in the previous month. Meanwhile, gross official reserves rose to USD 5.7 billion, enough to cover 4.6 months of imports, exceeding both the national (4.0 months) and EAC (4.5 months) benchmarks. Despite currency pressures, inflation remained contained at 5.1%, staying within the national target and highlighting the strength of macroeconomic policy coordination.

Tanzania Shilling Stability: Analysis with Figures

Exchange Rate Trends

• In March 2025, the Tanzania Shilling traded at an average rate of TZS 2,650.24 per US dollar, showing a monthly depreciation from TZS 2,492.05 in February 2025.
• This represents a monthly depreciation of approximately 6.3%, and an annual depreciation of 3.4%, compared to a 2.2% appreciation in February 2024.

Foreign Exchange Market Interventions

• The Interbank Foreign Exchange Market (IFEM) experienced liquidity constraints, mainly due to seasonal declines in forex inflows from tourism and cash crop exports.
• To stabilize the shilling, the Bank of Tanzania intervened by selling USD 62.3 million in March 2025, compared to only USD 24.4 million in February 2025.
• Total IFEM transactions rose to USD 70.1 million, up from USD 24.4 million in February but down from USD 86.8 million in March 2024.

Foreign Exchange Reserves

• Gross official reserves increased to USD 5,693.2 million at the end of March 2025 from USD 5,327.1 million in March 2024.
• This level of reserves is enough to cover 4.6 months of projected imports, exceeding both the national benchmark (4.0 months) and EAC benchmark (4.5 months).

Inflation Context

• Headline inflation in March 2025 was recorded at 5.1%, slightly higher than 4.8% in February.
• Despite the currency depreciation, inflation has remained within the national and EAC target levels, indicating controlled domestic price pressures.

Interpretation

The Tanzania Shilling has experienced moderate depreciation against the US dollar, but this has been effectively managed by the Bank of Tanzania through:

• Active forex market interventions,
• Adequate reserve levels, and
• Maintaining stable inflation.

Table: Indicators of Tanzania Shilling Stability (March 2025)

*Approximate value based on annual depreciation rate.
MoM = Month-on-Month, YoY = Year-on-Year.

This table shows that despite some pressure on the shilling, monetary policy measures and foreign reserves have helped maintain its overall stability in the short term.

Key Insights

1. Moderate Depreciation, But Under Control

• The Tanzania shilling depreciated from TZS 2,492.05 to TZS 2,650.24 per USD in one month—a 6.3% fall.
• Over the past year, the currency has weakened by 3.4%.
• This depreciation was expected due to seasonal drops in foreign exchange inflows (like tourism and cash crop exports).

2. Effective Central Bank Intervention

• To limit excessive volatility, the Bank of Tanzania sold USD 62.3 million in the foreign exchange market.
• This is a significant increase from USD 24.4 million in February, showing active efforts to stabilize the shilling.

3. Strong Foreign Reserves Support Stability

• Reserves rose to USD 5.7 billion, enough to cover 4.6 months of imports.
• This exceeds the national benchmark (4.0 months) and EAC requirement (4.5 months).
• High reserves give the central bank the power to defend the currency if needed.

4. Stable Inflation Despite FX Pressure

• Even with the depreciation, inflation stayed at 5.1%, within the national target.
• This shows that the depreciation has not triggered runaway price increases, indicating good policy coordination.

Conclusion

The Tanzania Shilling faced short-term depreciation pressures in March 2025, but remained broadly stable due to effective central bank action, healthy foreign reserves, and contained inflation. This reflects a resilient and well-managed financial system, capable of absorbing external shocks while supporting economic stability.

As of March 2025, Tanzania’s domestic debt reached TZS 34,255.4 billion, reflecting a modest increase from TZS 34,014.1 billion in February, largely due to net Treasury bond issuances amounting to TZS 163.5 billion. The largest share of the debt was held by commercial banks, amounting to TZS 9,948.4 billion (29%), followed closely by pension funds with TZS 9,091.5 billion (26.5%), and the Bank of Tanzania holding TZS 6,883.9 billion (20.1%). Other significant creditors included insurance companies (5.4%), BOT special funds (1.6%), and a diverse group of public institutions, individuals, and others (17.3%). This composition highlights a stable and diversified domestic financing structure, with key institutional investors playing a central role in funding government operations.

1. Government Domestic Debt Stock (March 2025)

• Total domestic debt: TZS 34,255.4 billion, a slight increase from TZS 34,014.1 billion in February 2025.
• The increase was primarily due to the issuance of Treasury bonds, adding TZS 163.5 billion in net terms.
• Treasury bonds remained the dominant borrowing instrument, accounting for 79.5% of the government securities portfolio.

2. Domestic Debt by Creditor Category (March 2025)

*Others include public institutions, private companies, and individuals.

Interpretation: What the Data Tells Us

1. Commercial banks remain the leading creditors, holding 29% of the domestic debt. This suggests strong financial sector participation in government financing.
2. Pension funds (26.5%) and the Bank of Tanzania (20.1%) also play key roles, providing long-term and stabilizing sources of funding.
3. The “Others” category (17.3%) shows growing participation from smaller institutions and individuals, indicating increasing financial market inclusiveness.

As of March 2025, Tanzania's government domestic debt stood at TZS 34.26 trillion, with commercial banks, pension funds, and the central bank as the main creditors. The composition reflects a stable and diversified domestic debt market, supporting the government's financing needs through long-term and market-based instruments.

What the Data Tells Us

1. Domestic Financing Is Heavily Market-Based

• Commercial banks are the largest creditors, holding TZS 9.95 trillion or 29% of domestic debt.
• This indicates that banks play a major role in financing the government through instruments like Treasury bills and bonds.

This shows: The government relies significantly on the financial sector for short- to medium-term funding, which can influence interest rates and credit availability for the private sector.

2. Pension Funds Are Strategic Long-Term Lenders

• Pension funds hold 26.5% (TZS 9.1 trillion) of the debt.
• This reflects a long-term and stable investment relationship, as pension funds often prefer secure, fixed-income government securities.

This shows: A strong link between public savings (retirement funds) and government financing, supporting fiscal stability over time.

3. The Bank of Tanzania Supports Liquidity and Stability

• The central bank itself holds TZS 6.88 trillion or 20.1% of domestic debt.
• This is typical in monetary policy operations and may include direct purchases of government securities to ensure liquidity or support policy goals.

This shows: The BoT acts as a fiscal backstop, helping manage cash flow needs and stabilize the bond market.

4. Broadening Participation in Domestic Debt Market

• The “Others” category (17.3%), including private institutions and individuals, shows growing inclusion in the debt market.

This shows: The domestic debt market is maturing, becoming more inclusive and diversified, which reduces overreliance on any single creditor group.

Conclusion

Tanzania’s domestic debt structure as of March 2025 reveals a healthy mix of commercial banks, pension funds, and the central bank as major creditors, supported by increasing participation from other entities. This structure reflects a stable and increasingly diversified domestic financing base, essential for sustainable debt management and macroeconomic stability.

As of March 2025, Tanzania’s total external debt stood at USD 34.06 billion, with the central government accounting for 78.3% (USD 26.67 billion), reflecting the public sector’s dominant role in external borrowing. The private sector held USD 7.38 billion (21.7%), of which USD 1.28 billion represented interest arrears. Disbursed funds were largely directed toward transport and telecommunication (21.3%), budget and balance of payments support (20.6%), and social welfare and education (20.1%), highlighting the government’s investment in infrastructure and social sectors. In terms of currency composition, the debt stock was heavily denominated in US dollars (67.7%), followed by the Euro (16.7%) and Chinese Yuan (6.3%), exposing the country to significant exchange rate risk. These figures underscore Tanzania’s strategy of development-oriented borrowing, while also signaling the need for prudent foreign currency risk management.

1. External Debt Stock by Borrowers (March 2025)

Insight: Public sector dominates Tanzania’s external debt, with over three-quarters owed by the central government.

2. Disbursed Outstanding Debt by Use of Funds (March 2025)

Insight: The top three sectors—Transport & Telecom (21.3%), Social Welfare & Education (20.1%), and BoP/Budget Support (20.6%)—account for over 62% of debt usage, showing focus on infrastructure and public services.

3. Debt by Currency Composition (March 2025)

Insight: The US dollar continues to dominate, making up over two-thirds of external debt. This exposes the debt profile to USD exchange rate risk.

As of March 2025, Tanzania’s external debt totaled USD 34.06 billion, with the central government accounting for 78.3%. Debt usage was primarily focused on infrastructure, public services, and budget support. The portfolio is heavily denominated in USD (67.7%), signaling potential currency exposure risk that needs active management.

Key Insights:

1. Debt Is Primarily Public and Government-Controlled

• 78.3% of total external debt (USD 26.7 billion) is owed by the central government.
• The private sector holds only 21.7%, with some of it (USD 1.28 billion) in interest arrears.

This shows: Tanzania’s external debt is mainly public, which gives the government control over how funds are allocated and managed, but also increases fiscal responsibility and repayment risk for the state.

2. Debt Is Focused on Development Priorities

• The largest shares of disbursed debt were used for:
  • Transport & Telecom (21.3%)
  • Budget Support & BoP (20.6%)
  • Social Welfare & Education (20.1%)
  • Energy & Mining (13.5%)

This shows: Borrowed funds are being directed towards infrastructure, public services, and economic growth sectors, which are critical for long-term development.

3. High Exposure to the US Dollar

• 67.7% of the debt stock is denominated in USD, with only 16.7% in EUR and 6.3% in Chinese Yuan (CNY).

This shows: Tanzania is highly exposed to USD fluctuations, meaning if the US dollar strengthens, the cost of servicing the debt increases in local currency (TZS). This is a key exchange rate risk.

Conclusion

The data indicates that Tanzania’s external debt is heavily concentrated in the central government, used for productive sectors like infrastructure and social services. However, the large share in USD poses a currency risk, making it important for Tanzania to maintain foreign reserves and export earnings to cushion against global shocks.

In March 2025, Tanzania’s central government collected a total of TZS 2,465.8 billion in revenue, which was 98.9% of the monthly target. Of this, TZS 2,387.5 billion came from the central government, including TZS 2,055.2 billion in tax revenue—driven by income taxes (TZS 676.1 billion), taxes on imports (TZS 755.3 billion), and local goods and services (TZS 490.6 billion). Non-tax revenue reached TZS 332.3 billion, meeting 99.4% of its target. On the expenditure side, the government spent TZS 3,658.3 billion, with TZS 2,372.0 billion allocated to recurrent expenses—including TZS 937.6 billion for wages and salaries—and TZS 1,286.3 billion for development projects. This spending reflects the government's commitment to public service delivery and infrastructure investment, despite operating a short-term fiscal gap of over TZS 1.19 trillion.

1. Central Government Revenue (March 2025)

• Total revenue collected: TZS 2,465.8 billion, which was just 1.1% below the target.
• Central government share: TZS 2,387.5 billion, which is 96.8% of total revenue.
• Target: TZS 2,390.1 billion, indicating near-target performance.
• Breakdown:
  • Tax revenue: TZS 2,055.2 billion (met the monthly target)
    • Income tax: TZS 676.1 billion
    • Taxes on local goods and services: TZS 490.6 billion
    • Taxes on imports: TZS 755.3 billion
    • Other taxes: TZS 133.2 billion
  • Non-tax revenue: TZS 332.3 billion vs. target of TZS 334.4 billion (99.4%)

Revenue performance remains strong, supported by tax administration improvements and steady economic activity.

2. Central Government Expenditure (March 2025)

• Total spending: TZS 3,658.3 billion
  • Recurrent expenditure: TZS 2,372.0 billion
    • Wages and salaries: TZS 937.6 billion
    • Interest payments: TZS 366.4 billion (Domestic: TZS 240.2 billion, Foreign: TZS 126.2 billion)
    • Other recurrent expenses: TZS 1,068.0 billion
  • Development expenditure: TZS 1,286.3 billion (Target exceeded slightly)

The government maintained a fiscal discipline approach, focusing on key social services and infrastructure despite a slight revenue shortfall.

Summary Table: Government Budget Operations (March 2025)

In March 2025, Tanzania’s central government demonstrated strong revenue performance, collecting over TZS 2.4 trillion, primarily through taxes. Despite revenue being slightly below target, government expenditure reached TZS 3.7 trillion, focusing on development and essential services, supported by prudent fiscal management.

Key Takeaways

1. trong Revenue Performance

• The government collected TZS 2,465.8 billion, just 1.1% below target, showing strong tax collection efficiency.
• Tax revenue (TZS 2,055.2 billion) hit its target, indicating:
  • Good tax administration,
  • Broadening tax base,
  • Resilient economic activity.
• Non-tax revenue (TZS 332.3 billion) also performed well at 99.4% of target, reflecting enhanced collection from fees, licenses, and dividends.

What it tells: The revenue system is functioning effectively, even under economic pressure.

2. High Government Spending

• Total expenditure reached TZS 3,658.3 billion, led by:
  • Recurrent spending: TZS 2,372.0 billion (65%) — covering wages and essential services.
  • Development spending: TZS 1,286.3 billion (35%) — invested in infrastructure, education, and health.

What it tells: The government is committed to balancing service delivery and long-term development, even if it means running a short-term fiscal deficit.

3. Fiscal Gap Suggests Borrowing

• With revenue at TZS 2.5 trillion and spending at TZS 3.7 trillion, there's a fiscal gap of about TZS 1.2 trillion.
• This likely requires borrowing (domestic and/or external) to bridge the deficit.

What it tells: The fiscal policy is slightly expansionary, prioritizing development, but managed under a disciplined framework.

Conclusion

The March 2025 budget performance shows a resilient fiscal system, with strong revenue collection and strategic spending priorities. Although the government is spending more than it earns in the short term, this is controlled and focused on growth-oriented sectors, supported by good tax performance and financial management.

In March 2025, Tanzania’s financial system experienced a moderate tightening in borrowing conditions, with the overall lending rate rising to 15.50%, up from 15.14% in February 2025. Short-term loans (up to 1 year) averaged 15.83%, while medium-term loans (1–3 years) rose above 16%, reflecting higher credit risk pricing. In contrast, negotiated lending rates for prime borrowers declined to 12.94% from 13.42%, indicating competitive conditions for low-risk clients. On the deposit side, returns eased due to improved liquidity, with the 12-month deposit rate dropping sharply to 8.14% from 9.48%, and the negotiated deposit rate falling to 10.35% from 11.40%. Consequently, the interest rate spread widened to 7.69 percentage points, compared to 6.29 points in February, highlighting growing bank profit margins and a cautious credit outlook.

1. Lending Interest Rates (TZS Loans)

Interpretation: Lending rates rose slightly across most loan durations in March 2025, reflecting cautious pricing due to liquidity costs and credit risk. However, negotiated rates (for prime borrowers) declined, indicating banks' willingness to offer competitive rates to low-risk clients.

2. Deposit Interest Rates (TZS Deposits)

Interpretation: Deposit rates declined slightly, particularly the 12-month and negotiated deposit rates, due to improved liquidity conditions in the banking system, reducing banks' need to compete for deposits.

3. Short-Term Interest Rate Spread

• The interest rate spread (difference between short-term lending and deposit rates) widened to 7.69 percentage points in March 2025, from 6.29 in February and 7.23 in March 2024.

Implication: A widening spread suggests improved bank profitability on new lending, but may also imply tighter borrowing conditions for depositors.

In March 2025, lending interest rates slightly increased, while deposit rates softened due to ample liquidity. The negotiated lending rate dropped to 12.94%, showing room for favorable terms for low-risk borrowers. These trends reflect active monetary management and a stable credit environment.

What the Figures Tell Us

1. Borrowing Costs Are Slightly Rising

• The overall lending rate increased from 15.14% in February to 15.50% in March 2025.
• Rates for short- and medium-term loans also rose.
• 👉 This suggests that banks are charging more for credit, possibly due to:
  • Inflation expectations,
  • Higher demand for credit,
  • Or cautious risk pricing.

2. Preferred (Low-Risk) Borrowers Still Get Better Deals

• The negotiated lending rate fell from 13.42% to 12.94%.
• 👉 This means banks are competing more for large or safe borrowers, such as corporates or government clients, by offering lower rates.

3. Depositors Are Getting Lower Returns

• Deposit rates fell slightly:
  • 12-month deposit rate dropped from 9.48% to 8.14%.
  • Negotiated deposit rate declined from 11.40% to 10.35%.
• 👉 This indicates that banks are less pressured to attract new deposits, thanks to improved liquidity in the system.

4. Wider Interest Rate Spread = Higher Bank Profit Margins

• The interest rate spread (gap between lending and deposit rates) increased to 7.69% in March from 6.29% in February.
• 👉 A higher spread often means better margins for banks, but it also signals higher borrowing costs for the public compared to the returns they earn from savings.

Overall Interpretation

The data shows a stable but cautious banking environment in Tanzania. Banks are raising lending rates slightly to manage risks and inflation, while lowering deposit rates as liquidity improves. However, prime borrowers still enjoy favorable terms, and banks are earning more from the gap between what they pay and what they charge.

In March 2025, Tanzania’s external sector recorded a significant improvement, with the current account deficit narrowing to USD 2.02 billion, down from USD 2.93 billion in March 2024, marking a 31.1% year-on-year reduction. The improvement was driven by robust export growth, as exports of goods and services rose to USD 16.51 billion, up from USD 14.08 billion a year earlier, representing a 17.2% increase. Within services, travel receipts—mainly tourism—accounted for 56.7% of total service earnings, reaching USD 3.93 billion, supported by a 12% rise in tourist arrivals to 2.15 million visitors. On the import side, service payments increased to USD 2.67 billion, up by 19.4%, largely due to higher freight and transport costs, which made up 53.3% of service imports. Meanwhile, foreign exchange reserves rose to USD 5.69 billion, enough to cover 4.6 months of imports, exceeding both the national (4.0 months) and EAC (4.5 months) benchmarks.

1. Current Account Performance (March 2025)

The current account deficit narrowed significantly by 31.1% year-on-year, driven by strong export growth, particularly in tourism, gold, and transport. Reserves now cover 4.6 months of imports, exceeding both national and EAC thresholds.

2. Export – Service Receipts by Category

*Includes construction, insurance, financial, telecom, computer services, IP charges, etc.

Travel receipts (tourism) dominate service exports, driven by a 12% increase in international arrivals, from 1.92 million in 2024 to 2.15 million in 2025.

3. Import – Service Payments by Category

Service payments rose sharply by 19.4%, mainly due to increased freight costs, reflecting rising import activity and global shipping rates.

As of March 2025, Tanzania’s external sector performance showed strong resilience. The current account deficit narrowed significantly to USD 2.02 billion, supported by a 17.2% increase in exports, especially in tourism and gold. On the import side, rising freight and service costs pushed service payments up by nearly 20%, yet the country maintained a healthy reserve position covering 4.6 months of imports.

Key Insights:

1. Current Account Deficit is Shrinking – A Positive Signal

• The current account deficit narrowed from USD 2.93 billion (March 2024) to USD 2.02 billion (March 2025) — an improvement of 31.1%.

This shows: Tanzania is earning more from exports, especially services like tourism and goods like gold, helping reduce reliance on foreign borrowing or reserve drawdowns.

2. Tourism is Driving Export Growth

• Service receipts rose to USD 6.92 billion, with tourism (travel services) accounting for 56.7%.
• Tourist arrivals increased from 1.92 million (2024) to 2.15 million (2025) — a 12% growth.

This shows: The tourism sector is rebounding strongly, contributing significantly to foreign exchange inflows and supporting the current account.

3. Higher Import Costs, Especially for Transport (Freight)

• Service payments jumped by 19.4%, from USD 2.24 billion to USD 2.67 billion, mainly due to rising freight/transport costs (53.3% of service imports).

This shows: While exports are improving, import-related costs are also rising, possibly due to increased import volumes and global shipping price pressures.

4. Foreign Reserves are Healthy

• Foreign reserves increased to USD 5.69 billion, covering 4.6 months of projected imports, above both:
  • The national benchmark (4.0 months)
  • The EAC benchmark (4.5 months)

This shows: Tanzania has a strong external buffer, allowing it to meet foreign obligations even under global shocks.

Conclusion

Tanzania’s external sector in March 2025 demonstrated improved stability with a shrinking current account deficit, strong tourism recovery, and growing exports. Despite rising freight costs increasing service import bills, the country maintains solid foreign reserves, ensuring resilience in external payments.

Government Securities and Interbank Cash Markets Thrive

In March 2025, Tanzania’s financial markets demonstrated robust investor confidence and liquidity strength, as shown by the performance of the government securities and interbank cash markets. The Bank of Tanzania conducted two Treasury bill auctions with a combined offer of TZS 218 billion, attracting bids worth TZS 662.5 billion, more than 3 times the offer, indicating high demand. The weighted average yield for T-bills dropped from 11.93% in February 2025 to 10.10%, reflecting investor optimism and lower inflation expectations. Similarly, the Treasury bond market saw strong participation, with 5-year and 15-year bonds oversubscribed, receiving TZS 200.5 billion and TZS 267.7 billion in bids respectively. Meanwhile, the Interbank Cash Market (IBCM) recorded total transactions of TZS 1,757.7 billion, dominated by 7-day maturities, with the average interbank rate slightly increasing to 8.12% from 8.06% in February. These developments underline a stable and active financial market environment supporting fiscal and monetary policy objectives in 2025.

1. Government Securities Market

Treasury Bills (T-Bills)

• In March 2025, the Bank of Tanzania conducted two T-bill auctions, each with a tender size of TZS 109 billion.
• These auctions were heavily oversubscribed, receiving bids totaling TZS 662.5 billion.
• Out of these, TZS 210.8 billion were accepted.
• The weighted average yield (WAY) dropped from 11.93% (Feb 2025) to 10.10% (Mar 2025), reflecting increased investor demand.

Treasury Bonds

• The Bank also held auctions for:
  • 5-year bond: Tender size TZS 77.8 billion → received TZS 200.5 billion in bids → TZS 151.6 billion accepted.
  • 15-year bond: Tender size TZS 148.4 billion → received TZS 267.7 billion in bids → TZS 146.5 billion accepted.
• The yield to maturity:
  • 5-year bond: Increased to 13.14%.
  • 15-year bond: Slightly decreased to 14.63%.

Implication: High demand for government securities shows strong investor confidence and liquidity in the market.

2. Interbank Cash Market (IBCM)

• The IBCM remained vibrant and active in facilitating short-term liquidity among banks.
• Total transactions in March 2025 amounted to TZS 1,757.7 billion, down from TZS 1,990.1 billion in February.
• The 7-day maturity transactions were dominant, making up 50.9% of all trades.
• Overnight transactions accounted for 7.3%.
• The overall interbank cash market interest rate slightly increased to 8.12% from 8.06% in February 2025.

Implication: The slight rate increase and high transaction volumes reflect active liquidity management by banks despite some market segmentation.

Summary Table

The data from the Government Securities Market and the Interbank Cash Market (IBCM) in Tanzania for March 2025 tells us several key things about the financial market conditions and investor behavior:

1. High Investor Confidence and Liquidity in the Market

• Oversubscription of Treasury bill and bond auctions (bids far exceeded offers) shows:
  • Strong investor demand for government securities.
  • Abundant liquidity in the financial system—investors, especially banks and pension funds, have cash to invest.
• Falling T-bill yields from 11.93% to 10.10% signal:
  • Investors are willing to accept lower returns, indicating confidence in macroeconomic stability and low inflation expectations.

2. Balanced Government Financing Strategy

• The government is actively using the domestic financial market to fund its budget through:
  • T-bills (short-term needs).
  • Bonds (medium to long-term financing).
• This approach helps reduce reliance on external debt and manage domestic borrowing costs.

3. Active Interbank Liquidity Management

• The IBCM transacted TZS 1.76 trillion, although slightly lower than the previous month.
• The interbank rate slightly rose to 8.12%, which still remains within the Bank of Tanzania’s policy corridor (centered around the 6% CBR ±2%).
• This suggests:
  • Banks are effectively managing short-term liquidity needs.
  • The market remains stable and well-functioning, with no significant liquidity stress.

4. Slight Yield Adjustments Reflect Market Dynamics

• The increase in 5-year bond yield (13.14%) and slight drop in 15-year yield (14.63%) show:
  • Investors may perceive more risk or uncertainty in the medium term.
  • But still maintain confidence in long-term fiscal management and economic outlook.

In Simple Terms:

• Investors trust the government and are keen to lend it money.
• The financial system is liquid and active.
• The central bank is maintaining a stable monetary environment.
• Tanzania’s domestic market is maturing as a reliable source of financing for the government.

Tanzania’s food inflation rose to 5.4% in March 2025, a slight increase from 5.0% in February, but still remains below the country’s long-term average of 7.7% recorded between 2010 and 2025. This moderate inflation level reflects relative price stability in the country’s food sector despite global and regional challenges. Compared to its East African neighbors, Tanzania ranks 8th, performing better than Kenya (6.6%) and Ethiopia (11.9%), but trailing behind Uganda (2.0%) and Rwanda (3.5%). On a continental scale, Tanzania stands in the middle tier, significantly outperforming high-inflation countries like South Sudan (106%), Zimbabwe (105%), and Malawi (37.7%), indicating a relatively stable macroeconomic and food supply environment.

Tanzania Food Inflation: March 2025

• Current Rate: 5.4% (year-on-year)
• Previous Month: 5.0%
• Historical Average (2010–2025): 7.7%
• Historical High: 27.84% in Jan 2012
• Historical Low: 0.10% in Mar 2019

This shows that Tanzania’s food inflation is currently below its long-term average, suggesting moderate food price pressures compared to historical trends.

Tanzania in Africa (Ranking)

Tanzania ranks 18th out of 42 African countries listed in terms of food inflation (from highest to lowest), placing it in the mid-range.

• Countries like South Sudan (106%) and Zimbabwe (105%) have extremely high food inflation.
• Djibouti (-2.9%) and Somalia (-1.5%) are currently experiencing food deflation.

Tanzania in East Africa

Tanzania compares with selected East African countries:

Tanzania ranks 8th among East African countries based on current food inflation. It is lower than Kenya (6.6%), but higher than Uganda (2%) and Rwanda (3.5%).

Top 10 African Countries with Highest Food Inflation (Mar 2025)

These countries are facing severe food price pressures, likely due to economic instability, currency depreciation, or supply chain issues.

Summary Insights:

• Tanzania's food inflation of 5.4% is moderate by African standards.
• It is below regional giants like Kenya and Ethiopia, but above Uganda and Rwanda.
• Compared to Africa’s average, Tanzania sits in the middle tier for food inflation.

Tanzania’s food inflation (5.4% in March 2025) with several important things at national, regional, and continental levels:

1. National Insights (Tanzania)

• Moderate Pressure: Tanzania's food inflation is relatively moderate compared to its historical average of 7.7%.
• Stability Compared to History: It’s far below its peak in 2012 (27.84%) and shows price stability in recent months.
• Rising Trend: There is a slight increase from 5.0% in the previous month, suggesting growing food cost pressures—possibly due to seasonal factors, fuel prices, or currency trends.

2. Regional Comparison (East Africa)

• Tanzania ranks 8th in East Africa in terms of food inflation.
• Lower than Kenya (6.6%) and Ethiopia (11.9%), meaning Tanzania is managing food prices better than some key neighbors.
• Higher than Uganda (2%) and Rwanda (3.5%), which may indicate areas for improvement in food supply chains or agricultural productivity.
• Suggests Tanzania’s inflation is under control, but with room for better performance compared to top regional performers.

3. Continental Position (Africa)

• Tanzania ranks 18th out of 42 African countries in food inflation – putting it in the middle of the pack.
• It’s far better than countries in crisis like Zimbabwe (105%), South Sudan (106%), Malawi (37.7%), and Ghana (26.5%).
• Indicates relative economic and price stability compared to many African nations struggling with hyperinflation or conflict.

Overall Interpretation

• Tanzania is in a stable but cautious position.
• Food prices are increasing, but not alarmingly.
• Compared to peers in East Africa and Africa:
  • Tanzania is doing better than many.
  • But it can still learn from countries with lower inflation, like Uganda or Rwanda, in managing supply and price controls.

Between 2010 and 2019, Tanzania recorded an impressive average real GDP growth rate of 6.3%, positioning it among Africa’s top five fastest-growing economies—surpassing regional peers such as Kenya (5.9%), Uganda (5.4%), and Ghana (6.2%), and trailing only behind Ethiopia (9.4%), Rwanda (7.8%), and Côte d’Ivoire (7.5%). Looking ahead, Tanzania is projected to maintain a strong growth trajectory with an average GDP growth rate of 5.9% from 2025 to 2027, slightly below its historical performance but ahead of several large economies, including Nigeria (3.8%) and South Africa (1.8%). While not leading the continent, Tanzania remains a key growth driver in East Africa, alongside Rwanda (8.5%), Uganda (6.2%), and Zambia (6.5%), reflecting continued resilience and investment momentum in sectors like construction, services, and agriculture.

Tanzania’s Position

• 2010–2019 average growth: 6.3%, among the top 5 in Africa.
• 2025–2027 average projection: 5.9%, maintaining a strong position, but slightly below past performance.
• Trajectory: Increasing growth trend:
  • 2023: 5.1%
  • 2024e: 5.5%
  • 2025f: 5.7%
  • 2026f: 5.9%
  • 2027f: 6.1%​

Regional Context

• Tanzania is one of the key drivers of growth in the East African Community alongside Kenya, Uganda, and Rwanda.
• East Africa is projected to remain the fastest-growing subregion, with average growth above 6.8% in 2026–27

Top Performers: Real GDP Growth (2010–2019)

Top Projected Performers: Real GDP Growth (2025–2027 average)

The real GDP growth data from 2010 to 2027 for Tanzania, as detailed in the Africa’s Pulse (Spring 2025), reveals the following key insights when comparing Tanzania to other African countries

1. Strong Historical Performance (2010–2019)

• Tanzania averaged 6.3% GDP growth, ranking it among the top 5 fastest-growing economies in Africa during that period.
• It outperformed Kenya (5.9%), Ghana (6.2%), Senegal (5.7%), and Uganda (5.4%), showing robust and consistent economic expansion driven by public investment, services, and agriculture.
• Only Ethiopia (9.4%), Rwanda (7.8%), and Côte d’Ivoire (7.5%) performed better during this decade.

Interpretation: Tanzania was one of the most stable and rapidly growing economies in Sub-Saharan Africa during the 2010s.

2. Projected Growth (2025–2027): Slightly Below the Top Tier

• While still strong, Tanzania’s projected growth places it just below the top-tier performers.
• Tanzania remains ahead of larger economies like Kenya, Nigeria, and South Africa, which are forecast to grow more slowly due to structural and fiscal challenges.

Interpretation: Tanzania will maintain steady, healthy growth but may not lead the continent as before unless it enhances reforms or investment levels like Rwanda or Ethiopia.

3. East African Regional Context

• Tanzania, Rwanda, Uganda, and Kenya are driving East Africa’s performance.
• Among these, Rwanda leads, followed by Uganda, then Tanzania, and finally Kenya.
• Tanzania is expected to grow at or above 5.9%, while Kenya is forecast to grow below 5.5%, giving Tanzania a relative advantage.

 Interpretation: Tanzania is a regional growth leader, though it is slightly behind Rwanda and Uganda in projected growth pace.

Overall Message for Tanzania

• Historically strong and steady economic performer.
• Consistently among the fastest-growing economies in Africa from 2010–2027.
• Faces competition from smaller but faster-growing economies (e.g., Rwanda, Senegal, Ethiopia).
• To remain competitive, Tanzania may need to boost productivity, investment, and governance reforms.

Tanzania has made significant progress in reducing inflation over the past decade. From an average annual Consumer Price Index (CPI) growth rate of 7.1% during 2010–2019, the country is projected to achieve a much lower and more stable rate of 4.0% over 2025–2027. This improvement reflects effective monetary and fiscal management, helping Tanzania transition into the group of low-inflation economies in Sub-Saharan Africa. For context, inflation is projected to remain high in countries like Nigeria (10%+), Ghana (8.0%), and Zambia (8.0%), while Tanzania outperforms even some of its regional peers, including Uganda (5.0%) and Kenya (5.5%). From 4.4% in 2022, CPI in Tanzania declined to 3.1% in 2024, and is expected to stabilize around 4.0% by 2027, underscoring its growing macroeconomic resilience and investor appeal.

Tanzania is expected to maintain low and stable inflation between 3.1% and 4.0% from 2024 to 2027, indicating macroeconomic stability and strong monetary policy performance​.

Tanzania’s Position and Implications

• Historically (2010–2019), Tanzania had moderately high inflation (7.1%).
• In the forecast period (2025–2027), inflation is projected to stabilize around 4.0%, which is well below the regional average and better than many high-inflation economies.
• Compared to regional peers:
  • Lower than Uganda (5.0%)
  • Lower than Zambia (8.0%)
  • Lower than South Africa (4.6%)
  • Comparable to Rwanda (4.3%)

Top African Countries by CPI Annual Change (Inflation Rate)

Highest Inflation Countries (2010–2019 average)

These countries faced persistent inflationary pressures over the decade:

Tanzania recorded an average annual CPI of 7.1%, slightly higher than Uganda (6.2%) and comparable to Zambia (8.8%). This places Tanzania among the moderately high-inflation economies in Sub-Saharan Africa during the 2010s.

CPI Trends and Projections (2022–2027)

Tanzania's annual CPI (inflation) showed the following trend:

Comparison with other notable countries (2027 projections)

Tanzania is transitioning from a moderately high inflation environment to a low and stable inflation economy, which enhances its macroeconomic credibility, investment attractiveness, and household purchasing power.

1. Tanzania Has Tamed Inflation Over Time

• From 2010 to 2019, Tanzania experienced moderately high inflation, averaging 7.1% annually.
• This level was higher than Uganda (6.2%) and much higher than Benin or Côte d’Ivoire (often under 3%), reflecting structural challenges like food price volatility, energy costs, and monetary expansion.

2. A Clear Downward Trend in Inflation

• Tanzania has achieved significant inflation reduction:
  • 2022: 4.4%
  • 2023: 3.8%
  • 2024e: 3.1%
  • 2025f–2027f: Stabilizing at ~4.0%
• This puts Tanzania in the low-inflation group in Sub-Saharan Africa, joining countries like Rwanda (4.3%) and Benin (1.5%).

3. Tanzania Performs Better Than Many Peers

• In 2027, Tanzania’s CPI of 4.0% will be:
  • Lower than Nigeria (10%+), Ghana (8.0%), and Zambia (8.0%)
  • Lower than regional average, with many countries still facing double-digit inflation
• This shows Tanzania’s strong monetary policy and price stability, even as others still struggle with inflationary pressures.

💡 What It Tells Us

• Tanzania has made real progress in macroeconomic management.
• It is now one of the more stable economies in East and Sub-Saharan Africa in terms of inflation, which:
  • Supports consumer purchasing power
  • Encourages investment
  • Enables predictable economic planning

In short, Tanzania has moved from a high-inflation past to a low-inflation future, showing maturity in economic policy and resilience compared to many of its African peers.