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.

In just nine months of the 2024/25 fiscal year, the Tanzania Revenue Authority (TRA) has collected TZS 24.05 trillion, marking a 17% increase compared to TZS 20.55 trillion collected during the same period in 2023/24. With projections showing total annual collections could exceed TZS 32 trillion, TRA’s performance now rivals the country’s reliance on external development financing — which typically stands at TZS 7–8 trillion annually from loans and grants. This growth signals that domestic revenue can progressively become a sustainable source for financing development projects, reducing dependence on foreign aid.

Revenue Collection Performance – January to March 2025 (Q3, FY 2024/25)

• Collected: TZS 7.53 trillion
• Target: TZS 7.43 trillion
• Performance: 101.32% of the target
• Growth: 13.47% compared to the same period in FY 2023/24 (which had TZS 6.63 trillion collected)

TRA exceeded the target by TZS 0.10 trillion (100 billion).

Cumulative Revenue – July 2024 to March 2025 (First 9 months)

• Collected: TZS 24.05 trillion
• Target: TZS 23.21 trillion
• Performance: 103.62%
• Growth: 17.01% compared to the same period in FY 2023/24 (TZS 20.55 trillion)

This is the highest ever 9-month collection in TRA’s history.

Historical Growth Comparison

• FY 2020/21 (Same period): TZS 13.59 trillion
• FY 2024/25 (Current period): TZS 24.05 trillion
• Growth in 4 years: 77% increase

This highlights the impact of reforms since President Samia Suluhu Hassan assumed office.

Key Drivers of Improved Revenue Collection

1. Leadership Directives

• Implementation of President Samia’s instructions to improve voluntary tax compliance.

2. Internal Improvements at TRA

• Improved staff discipline and innovation.
• Engagement with business communities and tax education.
• Deployment of the enhanced Customs Management System (TANCIS) in January 2025.
• Better enforcement of Electronic Fiscal Devices (EFDs).
• Weekend services at TRA offices (Saturday & Sunday).
• Weekly “Taxpayer Listening Day” (every Thursday).

3. Government Reforms and Environment

• Port services improvement led to increased imports/exports.
• Enhanced relations with investors.
• Rise in the number of Authorized Economic Operators (AEOs).

Focus for April – June 2025 (Q4)

• Finalization of IDRAS (Domestic Revenue System) by June 2025.
• Intensified tax education campaigns.
• Enforcement of electronic receipt issuance.
• Fair and equitable taxation (no favoritism).
• Collaboration with the Presidential Tax Review Taskforce.
• Strengthening audit and investigation units to fight tax evasion.

Tanzania’s revenue performance and how the Tanzania Revenue Authority (TRA) has improved in collecting taxes.

1. Strong Revenue Growth

• TRA collected TZS 24.05 trillion from July 2024 to March 2025.
• This is TZS 3.5 trillion more than the same period last year.
• It shows a 17% increase, which is a sign of strong economic activity and better tax compliance.

TRA is not only meeting but exceeding its targets.

2. Better Efficiency and Reforms Are Working

• TRA’s systems like TANCIS and EFD enforcement are helping track and collect taxes better.
• Opening offices on weekends and listening to taxpayers every Thursday builds trust and accessibility.

It shows that management reforms are paying off.

3. Business and Government Relationship is Improving

• The number of registered businesses and investors is going up.
• TRA is working more closely with them instead of just punishing—a shift from fear to collaboration.

4. Taxpayer Engagement is Crucial

• TRA is thanking taxpayers and encouraging patriotism.
• This signals that voluntary compliance is improving—people are paying taxes because they trust the system more.

5. Tanzania is Building a Stronger Economy

• A 77% growth in 4 years (from TZS 13.6T in 2020/21 to TZS 24.05T now) tells us:
  • There’s real momentum.
  • The government's focus on transparency, digital systems, and service delivery is helping.

🔑 In Simple Terms:

This report shows that Tanzania is collecting more tax than ever before, because:

• People are paying more willingly.
• TRA is doing a better job.
• The government is creating a good business environment.

Key Revenue Collection Figures – TRA Report (March 2025)

Could Tax Collections Alone Power Tanzania’s Development Projects?

Current Performance Shows Great Potential

From this report:

• TRA collected TZS 24.05 trillion in 9 months (July 2024 – March 2025).
• If this trend continues, TRA could collect over TZS 32 trillion by June 2025.

🧮 Estimation: If Q4 (Apr–Jun) brings another ~TZS 8 trillion → Annual Total = 24.05T + ~8T = ~TZS 32T

📉 Tanzania’s 2023/24 Budget Financing Gap (Aid + Loans)

According to past budgets:

• In 2023/24, Tanzania expected about TZS 7.26 trillion from concessional loans and grants.
• Out of a total budget of TZS 44.4 trillion, external financing accounted for ~16.4%.

🧾 So the financing gap Tanzania usually covers with aid/loans = ~TZS 7.2–8 trillion per year

🧠 What This Means

TRA already:

• Collected TZS 24.05T in just 9 months.
• Could reach TZS 32T annually soon.

If TRA can sustain and increase revenue growth:

• It can cover the same amount (or more) than what Tanzania receives from foreign aid and concessional loans.
• Example: TRA exceeding annual revenue by even just 10% = ~TZS 3T extra — halfway to the aid/loan gap.

📌 Key Considerations

Conclusion

Yes, TRA has the potential to replace or reduce Tanzania’s dependence on aid and loans, especially if:

• The current growth trend continues (13%–17% yearly),
• Reforms in tax systems and transparency are sustained,
• The government continues creating a good business and investment climate.

If Tanzania can fully fund development through its own taxes, it becomes more independent and self-reliant.

Over the past five years (2020–2024), Tanzania’s ATM infrastructure expanded by 48.7%, increasing from 1,462 ATMs in 2020 to 2,174 ATMs in 2024. This growth supported a rise in ATM transactions, which peaked at 75 million in 2023 before declining by 5.63% in 2024 to 70.79 million. Similarly, the value of ATM transactions grew significantly, reaching TZS 13.9 trillion in 2023, but experienced a slight 0.77% decline in 2024. These trends indicate increased ATM accessibility but also suggest a possible shift towards digital and mobile banking solutions.

Tanzania's ATM infrastructure and usage have seen notable fluctuations from 2020 to 2024, reflecting shifts in banking behavior and digital payment trends.

• The number of ATMs increased from 1,462 in 2020 to 2,174 in 2024, a 48.7% growth over five years. The most significant increase occurred in 2022 (30.81%), while 2021 saw a slight decline (-1.44%).
• ATM transactions peaked in 2023 at 75.01 million but dropped by 5.63% in 2024, settling at 70.79 million. This decline suggests a shift towards alternative digital payment methods.
• The value of ATM transactions surged by 41.64% in 2023, reaching TZS 13.9 trillion, before slightly decreasing by 0.77% in 2024 to TZS 13.79 trillion.

ATM transactions in Tanzania from 2020 to 2024:

Table: ATM Transactions in Tanzania (2020–2024)

Key Observations

• The number of ATMs grew by 48.7% over five years, from 1,462 in 2020 to 2,174 in 2024, with the largest growth occurring in 2022 (30.81%).
• ATM transactions peaked in 2023 at 75.01 million but declined by 5.63% in 2024, signaling a possible shift to digital payment methods.
• The value of transactions followed a similar pattern, peaking at TZS 13.9 trillion in 2023 before slightly declining to TZS 13.79 trillion in 2024.

Rising Transaction Values and Growing USD Dependence

From 2020 to 2024, Tanzania’s payment system saw significant shifts in transaction patterns. TISS transactions in Tanzania Shillings (TZS) grew in value by 68.6% (from TZS 186,369 billion in 2020 to TZS 314,233 billion in 2024) despite a 2.92% drop in volume in 2024. Meanwhile, USD-denominated transactions surged—the volume increased by 204%, from 227,894 in 2020 to 692,271 in 2024, while the value rose by 108%, from TZS 16,440 million to TZS 34,215 million. These trends indicate a shift towards high-value transactions in TZS and a growing preference for USD in financial settlements, reflecting deeper integration with global trade and potential shifts in monetary dynamics.

The trends in both Tanzania Shilling (TZS) and United States Dollar (USD) transactions reveal important insights about Tanzania’s financial system, monetary policy, and economic activities.

1. TZS Transactions: High Value Growth Despite Volume Decline

• The volume of transactions (number of transactions) peaked in 2023 at 4.11 million but dropped slightly in 2024 to 3.98 million (a 2.92% decrease).
• However, the value of transactions continued to grow significantly, reaching TZS 314,233 billion in 2024, a 22.87% increase from 2023.

What It Means:

✅ Higher transaction values but fewer transactions indicate a shift toward larger-value transactions. This suggests:

• Increased high-value economic activities, such as major government, corporate, and infrastructure payments.
• Inflationary effects or currency depreciation, where more shillings are needed for transactions.
• Financial consolidation—fewer but higher-value transactions may indicate improved digital banking efficiency or businesses reducing transaction frequency.

2. USD Transactions: Strong and Consistent Growth

• The volume of USD transactions has increased every year, reaching 692,271 transactions in 2024, a 27.03% increase from 2023.
• The value of USD transactions also grew steadily, reaching TZS 34,215 million in 2024, a 24.48% increase from 2023.

What It Means:

✅ Increased reliance on USD transactions suggests:

• Greater use of USD for trade and financial settlements, possibly due to exchange rate volatility or confidence in the dollar.
• More foreign investment and international transactions, reflecting economic globalization and foreign trade expansion.
• Hedging against Tanzania Shilling fluctuations, as businesses might prefer USD for stability.

3. TZS vs. USD Transactions: A Shift Toward Dollarization?

• While TZS transactions showed mixed trends (declining volume but growing value), USD transactions consistently increased in both volume and value.
• This suggests a partial shift toward dollarization in Tanzania's financial system, where businesses and individuals are increasing their reliance on the USD.

Implications for Tanzania's Economy:

• Monetary Policy Challenges: If more transactions shift to USD, the Bank of Tanzania (BoT) may have less control over money supply and inflation.
• Foreign Exchange Pressure: Higher USD demand could put pressure on Tanzania’s foreign exchange reserves.
• Investment Confidence: A rising USD transaction trend could indicate more foreign investor participation, boosting the economy.

Final Thought

The trends suggest that while local currency transactions remain dominant, foreign currency transactions are growing faster. This could indicate:

• A strengthening corporate and trade sector using more USD.
• Macroeconomic adjustments due to inflation, exchange rate policies, or economic shifts.

TISS (Tanzania Interbank Settlement System) transactions from 2020 to 2024:

TISS Transactions Denominated in Tanzania Shillings (TZS)

1. Transaction Volume (Million)
   • 2020: 2.48 million
   • 2021: 3.26 million (31.37% increase)
   • 2022: 3.83 million (17.68% increase)
   • 2023: 4.11 million (7.28% increase)
   • 2024: 3.98 million (2.92% decrease)

Trend: A steady increase in volume from 2020 to 2023, but a slight decline in 2024.

2. Transaction Value (TZS billion)
   • 2020: 186,369 billion
   • 2021: 174,309 billion (6.47% decrease)
   • 2022: 207,503 billion (19.04% increase)
   • 2023: 256,028 billion (23.39% increase)
   • 2024: 314,233 billion (22.87% increase)

Trend: Despite a drop in 2021, the value of transactions has shown consistent growth from 2022 to 2024.

TISS Transactions Denominated in United States Dollars (USD)

1. Transaction Volume
   • 2020: 227,894
   • 2021: 289,979 (27.24% increase)
   • 2022: 415,752 (43.37% increase)
   • 2023: 545,161 (31.13% increase)
   • 2024: 692,271 (27.03% increase)

Trend: Continuous growth in transaction volume every year, indicating increased dollar transactions.

2. Transaction Value (TZS million)
   • 2020: 16,440
   • 2021: 25,210 (29.43% increase)
   • 2022: 25,210 (18.48% increase)
   • 2023: 27,502 (9.09% increase)
   • 2024: 34,215 (24.48% increase)

Trend: The value of USD transactions has steadily increased each year, with the highest growth rate in 2024.

Key Insights:

• TZS transactions experienced a drop in volume in 2024 but saw a significant increase in value.
• USD transactions have shown consistent growth in both volume and value, highlighting the increasing role of USD-based transactions in Tanzania’s financial system.

Mobile banking in Tanzania has experienced significant fluctuations over the past five years. The number of subscribers dropped by 17.77% in 2021 but rebounded strongly in 2022 with a 64.30% increase, reaching 7.92 million users. Active users followed a similar trend, peaking at 2.65 million in 2024 after a 50.91% rise in 2023. The volume of transactions showed remarkable growth in 2024, surging by 76.04% to 144.34 million transactions, reflecting increasing trust in mobile banking. Despite a decline in transaction value in 2023 (-16.78%), it recovered in 2024, reaching TZS 29.92 trillion (+17.32%), signaling renewed confidence in digital financial services. These trends highlight the evolving landscape of mobile banking and its role in financial inclusion in Tanzania.

Analysis of Mobile Banking Trends in Tanzania (2020–2024)

1. Number of Subscribers

• The number of mobile banking subscribers fluctuated, decreasing from 5.86 million in 2020 to 4.82 million in 2021 (-17.77%), before recovering significantly in 2022 to 7.92 million (+64.30%).
• Growth continued in 2023 (8.99 million, +13.47%) and 2024 (9.48 million, +5.41%), indicating a steady increase in mobile banking adoption.

2. Active Users

• Active users followed a similar trend, dropping from 1.48 million in 2020 to 1.24 million in 2021 (-16.27%), then rebounding in 2022 to 1.62 million (+30.78%).
• The highest increase occurred in 2023 (2.45 million, +50.91%), reflecting strong user engagement. In 2024, growth slowed but remained positive (2.66 million, +8.43%).

3. Volume of Transactions

• The number of transactions increased from 59.23 million in 2020 to 71.45 million in 2021 (+20.63%), and further to 92.13 million in 2022 (+28.93%).
• However, there was a decline in 2023 (81.99 million, -11.00%), before a major rebound in 2024 (144.34 million, +76.04%).

4. Value of Transactions (TZS Million)

• The total transaction value surged from TZS 15.23 trillion in 2020 to TZS 24.97 trillion in 2021 (+64.00%), and further to TZS 30.65 trillion in 2022 (+22.74%).
• A dip occurred in 2023 (TZS 25.51 trillion, -16.78%), followed by recovery in 2024 (TZS 29.92 trillion, +17.32%).

Key Takeaways

• Subscriber Growth: Recovery after the 2021 decline suggests increasing confidence in mobile banking services.
• Active Users: The 2023 surge (+50.91%) highlights efforts to boost engagement, possibly through digital financial initiatives.
• Transaction Volume: A sharp rebound in 2024 (+76.04%) signals a renewed push for digital transactions.
• Transaction Value: Despite a temporary decline in 2023, the upward trend in 2024 suggests strengthening mobile banking adoption.

Mobile Banking Trends in Tanzania (2020–2024)

Key Insights

1. Subscriber Growth:
   • A decline in 2021 (-17.77%) but a strong recovery in 2022 (+64.30%).
   • Moderate growth in 2023 (+13.47%) and 2024 (+5.41%).
2. Active Users:
   • Dropped in 2021 (-16.27%), then rebounded in 2022 (+30.78%) and 2023 (+50.91%).
   • Growth slowed in 2024 (+8.43%), indicating stabilization.
3. Volume of Transactions:
   • Increased from 2020 to 2022, peaking at 92.13 million in 2022.
   • A drop in 2023 (-11.00%) was followed by a major increase in 2024 (+76.04%).
4. Value of Transactions:
   • Peaked at TZS 30.65 trillion in 2022 but declined in 2023 (-16.78%).
   • Recovery in 2024 (TZS 29.92 trillion, +17.32%) suggests growing trust in digital financial transactions.

Money remittances in Tanzania have experienced significant shifts from 2020 to 2024, with both bank-facilitated and mobile money transactions showing remarkable growth. Bank remittance inflows surged from TZS 894.08 billion in 2020 to TZS 1,892.71 billion in 2024, marking a 111.7% increase, while outflows rose by 164.5%, reaching TZS 1,163.99 billion. Mobile money remittance inflows also grew significantly, from TZS 483.8 billion in 2020 to TZS 1.065 trillion in 2024, despite a slight 4.23% decline in transaction volume in 2024 compared to 2023. This trend highlights an increasing reliance on formal banking systems while mobile money continues to play a vital role in financial inclusion.

Bank-Facilitated Remittances

Between 2020 and 2024, remittance inflows facilitated by banks grew by 41.7%, from TZS 894.08 billion in 2020 to TZS 1,892.71 billion in 2024. The volume of inflows also saw a significant increase, peaking at 1.26 million transactions in 2024—a 50% rise from 2023. On the outflow side, remittances increased by 16% in volume and 29% in value in 2024, reaching TZS 1.16 trillion. This trend reflects an increasing reliance on formal banking channels for cross-border money transfers.

Mobile Money Remittances

Remittances through Mobile Money Operators (MMOs) saw rapid early growth but stabilized in recent years. The inflow value grew from TZS 483.8 billion in 2020 to TZS 1.065 trillion in 2024, marking a 120% increase over five years. However, after a peak of 4.02 million transactions in 2022, the volume declined by 4.23% in 2024, indicating possible shifts in user behavior or regulatory impacts. Despite this, the value of transactions rebounded in 2024 with an 8.6% increase, showcasing sustained demand for mobile remittance services.

Money Remittance Trends (2020 – 2024)

Table 1: Bank-Facilitated Remittances (TZS Billion & Volume)

Table 2: Mobile Money Remittances (TZS Billion & Volume)

Key Insights from the Data

1. Bank-Remitted Inflows grew from TZS 894.08 billion in 2020 to TZS 1,892.71 billion in 2024, showing a 111.7% increase over the period. The volume of transactions also doubled, reaching 1.26 million in 2024.
2. Bank-Remitted Outflows rose from TZS 439.88 billion in 2020 to TZS 1,163.99 billion in 2024, an increase of 164.5%, highlighting greater outbound financial activity.
3. Mobile Money Remittance Value climbed from TZS 483.8 billion in 2020 to TZS 1.065 trillion in 2024, a 120% increase, even though transaction volumes declined by 4.23% in 2024 compared to 2023.
4. The banking sector saw stronger inflow growth compared to MMOs, possibly due to increased regulatory oversight or shifting consumer preferences toward formal banking channels.