In April 2025, Tanzania’s government domestic debt reached TZS 34,759.9 billion, a 1.5% increase from TZS 34,255.4 billion in March 2025 and a 9.2% rise from TZS 31,836.5 billion in April 2024, reflecting steady reliance on domestic financing to support fiscal needs. Commercial banks (28.9%, TZS 10,049.9 billion) and pension funds (26.4%, TZS 9,171.1 billion) are the largest creditors, while the “Others” category, including individuals and corporates, surged by 47% to TZS 5,996.8 billion, indicating growing public participation.

1. Total Domestic Debt Stock (April 2025)

The total government domestic debt stock represents the amount owed to domestic creditors, primarily through government securities like Treasury bills and bonds, used to finance budget deficits and support fiscal operations.

Key Figures:

• Total Government Domestic Debt: TZS 34,759.9 billion
• Change from March 2025: Increased by 1.5% from TZS 34,255.4 billion (an increase of TZS 504.5 billion).
• Change from April 2024: Increased by 9.2% from TZS 31,836.5 billion (an increase of TZS 2,923.4 billion).

Analysis:

• Month-on-Month Growth: The 1.5% increase from March 2025 (TZS 34,255.4 billion to TZS 34,759.9 billion) reflects moderate growth in domestic borrowing, likely driven by ongoing fiscal needs, such as financing the March 2025 budget deficit of TZS 284.3 billion (previous responses). The Monthey Economic Review indicates high liquidity in the Government Securities Market (e.g., TZS 1,076.7 billion in bond bids, previous responses), supporting the issuance of new securities.
• Year-on-Year Growth: The 9.2% increase from April 2024 (TZS 31,836.5 billion) aligns with TICGL noting a rising domestic debt trend, with domestic debt reaching TZS 34,014.1 billion in February 2025, down slightly from January due to reduced overdraft use. This growth reflects the government’s reliance on domestic financing to support infrastructure and recurrent expenditures, as outlined in the 2024/25 budget of TZS 49.35 trillion.
• Debt Sustainability: The IMF’s Debt Sustainability Analysis (DSA) indicates that Tanzania’s public debt, including domestic debt, remains sustainable at 46.7% of GDP in 2022/23, including domestic arrears. The domestic debt-to-GDP ratio is estimated at approximately 15.9% in 2021/22, suggesting that April 2025’s TZS 34,759.9 billion (roughly USD 12.97 billion at TZS 2,684.41/USD, previous responses) remains manageable given Tanzania’s GDP of USD 79.2 billion in 2024.

Insights:

• The modest 1.5% monthly increase suggests controlled borrowing, consistent with the Monthey Economic Review’s fiscal deficit target below 3% of GDP and TICGL projecting a 2.5% deficit in 2024/25.
• The 9.2% annual increase indicates a strategic use of domestic borrowing to complement external debt (USD 35.51 billion in April 2025, previous responses), reducing reliance on foreign currency risks (USD dominates external debt at 67.4%, previous responses).
• TICGL highlight commercial banks and pension funds as key creditors reflecting a diversified and stable domestic creditor base.

2. Domestic Debt by Creditor Category (April 2025)

This breakdown details the distribution of domestic debt across creditor categories, highlighting the roles of various institutions and investors in financing government operations.

Key Figures:

Analysis:

• Commercial Banks (28.9%, TZS 10,049.9 billion): As the largest creditor group, commercial banks play a pivotal role in financing government debt, primarily through Treasury bills and bonds. Their share is slightly lower than the 33.1% reported in March 2024, reflecting a minor decline in holdings (see comparison below). This aligns with the Monthey Economic Review’s indication of high banking sector liquidity (e.g., TZS 2,611.1 billion in Interbank Cash Market transactions, previous responses), enabling banks to absorb government securities.
• Pension Funds (26.4%, TZS 9,171.1 billion): The second-largest creditor group, pension funds’ significant share reflects their preference for long-term securities like Treasury bonds, consistent with their long-term investment horizons. TICGL note pension funds held 26.7% in March 2024, indicating stable institutional participation.
• Bank of Tanzania (20.5%, TZS 7,119.2 billion): The BoT’s substantial holding likely includes monetary policy instruments (e.g., liquidity management through Treasury bills) and budgetary support via overdraft facilities. The Monthey Economic Review notes the BoT’s role in stabilizing the interbank market rate within 4–8% (previous responses), supporting its debt holdings.
• Others (17.3%, TZS 5,996.8 billion): This category, including public institutions, private companies, and individuals, shows significant growth (see comparison below), indicating deepening financial market participation. TICGL highlight growing investor interest in government securities, likely driven by attractive yields (e.g., T-bill rates at 11.7% in March 2024).
• Insurance Companies (5.3%, TZS 1,858.4 billion) and BoT Special Funds (1.6%, TZS 564.5 billion): These smaller shares reflect niche roles, with insurance companies investing in secure government securities and BoT special funds supporting specific fiscal needs. Their shares are consistent with historical data (9% and 2% in 2019).

Insights:

• The diversified creditor base reduces reliance on any single group, enhancing debt market stability. Commercial banks and pension funds dominate due to their capacity to absorb large volumes of securities, as noted in TICGL.
• The BoT’s 20.5% share reflects its dual role in monetary policy and fiscal support, aligning with the stable Central Bank Rate (CBR) of 6%.
• The significant share of “Others” (17.3%) indicates broadening financial inclusion, as retail and corporate investors increasingly participate in government securities, supported by digital platforms and market reforms.

3. Comparison: April 2024 vs. April 2025

This comparison highlights changes in creditor holdings, providing insights into evolving debt dynamics.

Key Figures:

Analysis:

• Commercial Banks (↓ -1.1%, TZS -107.9 billion): The slight decline from TZS 10,157.8 billion to TZS 10,049.9 billion suggests portfolio rebalancing or increased competition from other creditors. TICGL note a similar trend in February 2025, with domestic debt declining due to reduced overdraft use, possibly reflecting banks’ shift to other investments amid high liquidity (7-day interbank rate within 4–8%).
• Bank of Tanzania (↑ +6.2%, TZS +416.8 billion): The increase from TZS 6,702.4 billion to TZS 7,119.2 billion indicates greater BoT involvement, likely through monetary policy operations or overdraft facilities to support fiscal needs. The Monthey Economic Review’s stable CBR at 6% supports the BoT’s role in liquidity management.
• Pension Funds (↑ +5.0%, TZS +438.1 billion): The rise from TZS 8,733.0 billion to TZS 9,171.1 billion reflects pension funds’ preference for long-term Treasury bonds, driven by yields (e.g., 2–20-year bond yields up 2–2.9% in March 2024). This aligns with their 26.7% share in March 2024.
• Others (↑ +47.0%, TZS +1,908.7 billion): The sharp increase from TZS 4,088.1 billion to TZS 5,996.8 billion signals growing participation from non-traditional investors (e.g., individuals, corporates), likely due to attractive yields and improved access to securities markets.  TICGL note Treasury bonds as the dominant instrument, appealing to retail investors.
• BoT Special Funds (↑ +84.0%, TZS +257.8 billion): The significant rise from TZS 306.7 billion to TZS 564.5 billion suggests increased use of special funds for specific fiscal purposes, though their small share (1.6%) limits their overall impact.
• Insurance Companies (↑ +0.5%, TZS +10.0 billion): The marginal increase from TZS 1,848.4 billion to TZS 1,858.4 billion indicates stable but limited participation, consistent with their 5–9% historical share.

Insights:

• The decline in commercial banks’ holdings (-1.1%) suggests a shift toward other investments or competition from pension funds and “Others,” reflecting a deepening domestic debt market, as noted in TICGL.
• The significant growth in “Others” (+47.0%) indicates financial market development, with retail and corporate investors increasingly absorbing government securities, supported by digital platforms and market reforms.
• The increases in BoT (+6.2%) and pension funds (+5.0%) reflect institutional confidence in government securities, driven by stable macroeconomic conditions (inflation at 3.2%) and attractive yields (T-bill rates at 11.7% in March 2024).

Conclusion

Tanzania’s domestic debt stock in April 2025 reached TZS 34,759.9 billion, up 1.5% from March 2025 and 9.2% from April 2024, reflecting steady reliance on domestic financing to support a TZS 284.3 billion budget deficit (previous responses). Commercial banks (28.9%, TZS 10,049.9 billion) and pension funds (26.4%, TZS 9,171.1 billion) remain the largest creditors, followed by the BoT (20.5%, TZS 7,119.2 billion), indicating a diversified creditor base. The sharp 47% increase in “Others” (TZS 5,996.8 billion) highlights growing public participation, driven by attractive yields and financial market reforms. The domestic debt remains sustainable, with a debt-to-GDP ratio below 55%, supported by robust GDP growth (5.6% in 2024, projected 6% in 2025) and fiscal discipline.

The following table summarizes these key figures.