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 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.