How the Global Financial Architecture Shapes Africa & Tanzania's Economic Future

TABLE 1 · Major GFA Institutions & Africa Exposure, 2023–2025 | Sources: IMF, World Bank, AfDB, Afreximbank Annual Reports 2023–2024
Institution	Est.	Africa Exposure / Commitment	Key Instruments	Africa Voting Share
International Monetary Fund (IMF)	1944	$93 Bn outstanding (2023); $214M COVID relief	RSF, ESF, RCF, SBA, PRGT	~8.0%
World Bank Group (WBG)	1944	$114 Bn portfolio; $35 Bn climate (2024)	IDA Loans, IBRD, IFC, DPF Grants	~6.5%
African Development Bank (AfDB)	1964	$47 Bn outstanding; $25 Bn climate (2020–25)	ADF Grants, ADB Loans, HI5	~60.0%
Afreximbank	1993	$32 Bn trade finance (2023); PAPSS launched	Trade Finance, Intra-Africa PAPSS	100.0%

TABLE 2 · Africa FDI Inflows & External Debt, 2020–2025 | Sources: UNCTAD World Investment Report 2024, ONE Data, Afreximbank 2024
Year	FDI Inflows (USD Bn)	External Debt (USD Bn)	Debt Service (USD Bn)	Key Driver / Event
2020	$24.21	~$700	—	COVID-19 shock; DSSI activated
2021	$71.37	—	—	Strong rebound post-lockdown
2022	$37.76	—	—	Global rate hike cycle begins
2023	$40.63	$707.9	$84.4	Debt distress in Ghana, Zambia, Ethiopia
2024	$97.00 Record High	~$1,300+	Est. $90+	LNG projects, infrastructure boom

TABLE 3 · Sovereign Credit Ratings & Borrowing Costs, 2023–2024 | Sources: S&P Global, Bloomberg, IMF GFSR 2024
Country / Region	S&P Rating (2024)	Avg. 10-yr Bond Yield	Spread over US Treasury	Implication
United States	AA+	4.5%	— (Benchmark)	Global risk-free reference
Germany	AAA	2.7%	+0 bp	Euro risk-free anchor
South Africa	BB-	11.5%	+700 bp	Junk status; costly borrowing
Kenya	B	14.5%	+1,000 bp	Debt distress risk elevated
Tanzania	B+	~11–12%	+650–750 bp	Moderate; PSI improves credibility

TABLE 4 · African Currency Depreciation, 2020–2025 | Sources: IMF IFS, Central Bank data, Bank of Tanzania 2025
Currency	Country	2020 Rate (per USD)	2025 Rate (per USD)	% Depreciation	Primary Driver
Algerian Dinar (DZD)	Algeria	~132	~134	1.5%	Managed float; hydrocarbon stability
South African Rand (ZAR)	South Africa	~14.7	~15.9	8.2%	Load-shedding, growth slowdown
Tanzania Shilling (TZS)	Tanzania	~2,314	~2,569	9.6%	Current account deficit, moderate pressure
Kenyan Shilling (KES)	Kenya	~109	~162	48.6%	Debt servicing pressure, capital outflows
Egyptian Pound (EGP)	Egypt	~15.7	~30.9	96.8%	IMF EFF program devaluation requirements
Ghanaian Cedi (GHS)	Ghana	~5.8	~16.9	185.7%	Debt crisis; IMF ECF restructuring

TABLE 5 · External Debt & Debt Service Indicators, 2023–2025 | Sources: World Bank IDS, IMF DSA Reports, Bank of Tanzania 2025
Country	External Debt (% GDP)	Debt Service (% Exports)	IMF Program Status (2025)	Risk Assessment
Tanzania	43% (2023); 32.5% (2025)	~12%	PSI — Policy Signaling	Moderate — Prudent Mgmt
Kenya	72%	38%	ECF Active	High — Near Debt Distress
Ethiopia	~29%	~25%	ECF Post-Conflict	High — Restructuring
Ghana	>90%	~52%	ECF 2023 ($3B program)	Critical — Common Framework
Nigeria	~38%	~22%	No active program	Moderate-High

TABLE 6 · Africa Climate Finance Need vs. Actual Flows, 2021–2024 | Sources: AfDB 2024, World Bank Climate Finance Report 2024, OECD DAC
Year	Annual Need (USD Bn)	Actual Received (USD Bn)	Key Sources	Coverage Gap
2021	$143	~$30	WB, AfDB, bilateral donors	~79% Unfunded
2022	$143	~$32	WB, AfDB, MDBs	~78% Unfunded
2023	$143	~$35	WB, AfDB, MDBs, COP pledges	~76% Unfunded
2024	$143+	~$38 (est.)	WB $35Bn climate total; AfDB $5.5Bn	~73% Unfunded

TABLE 7 · Multilateral Development Finance to Africa, 2020–2025 | Sources: AfDB, World Bank, IMF Annual Reports 2023–2024, Afreximbank
Institution	2020–2025 Commitments	Key Focus Areas	Conditionality	Recent Highlights
World Bank (IDA/IBRD)	~$16 Bn/year to SSA	Infrastructure, DPF, social services	Policy benchmarks, governance	$300M Tanzania disaster response (2025); $35Bn climate
AfDB	$25 Bn climate (2020–2025); $5.5Bn in 2024	Green growth, infrastructure, food security	Sector-specific reforms	$156M Tanzania green growth (2025); HI5 priorities
IMF (PRGT)	$5–13 Bn/year (COVID peak)	Macro stabilization, balance of payments	Structural benchmarks	$214M COVID Africa emergency; Ghana $3B ECF 2023
Afreximbank	$32 Bn trade finance (2023)	Intra-African trade, PAPSS payments	Commercial terms	PAPSS: pan-African payment settlement launched

TABLE 8 · Africa Infrastructure & Climate Financing Gap | Sources: AfDB 2024, World Bank, OECD DAC, G20 Infrastructure Hub
Sector	Annual Need (USD Bn)	Current Financing (USD Bn)	Annual Gap (USD Bn)	Gap Unfilled
Transport (Roads, Rail, Ports)	$130–170	$45	$85–125	~65–70%
Energy & Power	$70–90	$32	$38–58	~55–65%
Water & Sanitation	$65–85	$18	$47–67	~70–80%
ICT & Digital	$50–70	$22	$28–48	~55–70%
Agriculture & Food	$30–50	$12	$18–38	~55–65%

TABLE 9 · Fiscal Response Capacity Comparison — COVID-19 | Sources: IMF Fiscal Monitor 2024, World Bank, National Treasuries
Region / Country	Fiscal Stimulus 2020–21 (% GDP)	Debt-to-GDP (2023–25)	Policy Rate Space (2020)	IMF Emergency Support
United States	~27%	124%	1.75% → 0%	None needed
European Union	~18%	91%	0% (already at floor)	None needed
China	~5%	78%	3.8% → 3.0%	None needed
Sub-Saharan Africa	~3.2%	~55%	Limited — already elevated	Yes — 48 countries
🇹🇿 Tanzania	~2.1%	43%	7% → 5%	PSI maintained; no disbursement
Kenya	~4.5%	72%	7% → 4.25%	Yes — RCF + ECF
Ghana	~5.1%	>90%	16% → 14%	Yes — RCF 2020; ECF $3B (2023)
Egypt	~3.8%	~92%	9.25% → 8.25%	Yes — SBA $5.2B; EFF $8B (2024)

TABLE 10 · GFA Crisis Response Mechanisms for Africa, 2020–2024 | Sources: IMF, World Bank, AfDB COVID-19 Response Reports; G20 DSSI Tracker
Mechanism / Instrument	Scale / Amount	Countries Benefiting	Conditionality	Key Outcomes
G20 DSSI (Debt Service Suspension)	$12.9 Bn suspended	48 low-income countries	Participation agreement	Temporary liquidity relief
IMF COVID Emergency (RCF/RFI)	$9.4 Bn (RCF) + $3.2 Bn (RFI)	31 + 6 African countries	Minimal	Fast-disbursing; limited structural conditions
IMF CCRT Debt Relief (grants)	~$1.4 Bn	29 poorest countries	None	Grant-based; countries continued servicing IMF
SDR Special Allocation (2021)	$650 Bn global; ~$33 Bn Africa	54 African countries	None (automatic)	Boosted reserves; rich nations got bulk
Common Framework (post-DSSI)	$9.3 Bn Ghana; $6.3 Bn Zambia	4 countries only	Restructuring conditions	Slow; creditor coordination issues
AfDB COVID Response Facility	$10 Bn (2020–2022)	54 member countries	Targeted sector use	Health, food security, MSMEs supported
World Bank COVID Emergency	$13.5 Bn to SSA (2020)	All SSA members	Project-level benchmarks	Health systems, social protection focus

TABLE 11 · Tanzania Key Macroeconomic Indicators, 2020–2025 | Sources: Bank of Tanzania Annual Reports; IMF Article IV 2024; NBS Tanzania
Indicator	2020	2021	2022	2023	2024	2025 (est./proj.)
GDP Growth Rate (%)	4.8%	4.9%	4.7%	5.1%	5.3% (est.)	5.5% (proj.)
External Debt (USD Bn)	$25.57	$28.53	$30.38	$34.60	$36.3 (est.)	$35.3 (Dec 2025)
External Debt (% GDP)	~41%	~42%	~42%	~43%	~43%	32.5%
FDI Inflows (USD Bn)	$0.94	$1.19	$1.44	$1.63	$1.72	N/A
TZS/USD (Average)	~2,314	~2,304	~2,332	~2,421	~2,614	~2,571 (mid-2025)
TZS Depreciation (YoY)	N/A	Minimal	1.2%	3.8%	8.0%	9.6% (June 2025)
Inflation Rate (%)	3.3%	3.7%	4.4%	3.8%	3.5% (est.)	~3.5% (proj.)
Current Account (% GDP)	-3.5%	-4.0%	-5.2%	-4.6%	-4.2% (est.)	N/A

TABLE 12 · Tanzania FDI & External Debt Integrated Trend, 2020–2025 | Sources: Bank of Tanzania, IMF, UNCTAD
Year	FDI Inflows (USD Bn)	External Debt (USD Bn)	Debt (% GDP)	TZS/USD (Avg.)	GDP Growth
2020	$0.94	$25.57	~41%	~2,314	4.8%
2021	$1.19	$28.53	~42%	~2,304	4.9%
2022	$1.44	$30.38	~42%	~2,332	4.7%
2023	$1.63	$34.60	~43%	~2,421	5.1%
2024	$1.72 +83% vs 2020	$36.3 (est.)	~43%	~2,614	5.3% (est.)
2025 (Dec)	N/A	$35.3 Declining	32.5%	~2,571 (mid)	5.5% (proj.)

TABLE 13 · Tanzania Development Finance by Institution, 2020–2025 | Sources: Bank of Tanzania, World Bank, AfDB, IMF 2024–2025
Institution	2020–2025 Total (USD Mn)	Key Focus	Notable Disbursements (2024–25)	Conditionality
World Bank (IDA)	$11,606	Infrastructure, DPF, social services	$300M disaster response (2025); climate DPF	Policy benchmarks; governance
China (Bilateral)	~$2,500 (est.)	Infrastructure (SGR, roads, energy)	Ongoing project drawdowns	Procurement-tied conditions
EU & Bilateral Donors	~$1,200 (est.)	Governance, health, agriculture	Budget support & sector programs	Governance criteria
IMF (PSI)	$973 (signaling value)	Macro stability signaling	Policy signaling only; no new debt	Structural benchmarks via PSI
AfDB	$685	Climate, green growth, inclusion	$156M green growth program (2025)	Sector-specific reform targets
Commercial Borrowing	~$800 (est.)	Bridge financing	Minimal ongoing	Market rates; no conditions
TOTAL (est.)	~$17,763+	Multi-sectoral	Ongoing disbursements	Varied by source

TABLE 14 · Tanzania Shilling vs. East African Peers, 2020–2025 | Sources: Bank of Tanzania, Central Bank of Kenya, IMF IFS 2025
Year	TZS/USD (Avg.)	KES/USD (Avg.)	UGX/USD (Avg.)	TZS YoY Change	Regional Comparison
2020	~2,314	~109	~3,720	N/A (baseline)	TZS most stable in EAC
2021	~2,304	~110	~3,565	Minimal (+0.4%)	TZS appreciates slightly
2022	~2,332	~120	~3,730	1.2% depreciation	KES begins to weaken
2023	~2,421	~142	~3,780	3.8% depreciation	KES -18%; TZS relatively stable
2024	~2,614	~150	~3,820	8.0% depreciation	Both TZS & KES under pressure
2025 (mid)	~2,571	~162	~3,900	9.6% YoY (June 2025)	TZS stabilising; KES -48% since 2020

TABLE 15 · Tanzania Crisis Response and GFA Support, 2020–2025 | Sources: Bank of Tanzania, World Bank, IMF Article IV 2024
Shock / Event	GDP Impact on Tanzania	GFA Response / Support	Tanzania's Outcome
COVID-19 (2020)	Growth slowed to 4.8% (from 6.8% in 2018)	IMF PSI maintained; WB emergency DPF; no DSSI request	Resilient — best SSA performers in 2020
Global Rate Hikes (2022–23)	Higher import costs; TZS pressure; FDI dip	BoT rate adjustment; IMF PSI signaling	Moderate impact; managed via monetary tightening
Global Food/Energy Shock (2022)	Inflation rose to 4.4%; current account widened	WB DPF support; BoT FX intervention	Inflation contained vs. regional peers
Extreme Weather / Floods (2024–25)	Agricultural output hit; infrastructure damage	WB $300M disaster response (2025); AfDB climate programs	Recovery underway; finance secured
External Debt Pressure (ongoing)	Debt service ~12% of exports	PSI discipline; concessional refinancing	Debt sustainability maintained; 32.5% GDP (2025)

TABLE 16 · Africa's Voting Power vs. G7 in Key GFA Institutions, 2024 | Sources: IMF, World Bank, AfDB Governance Documents; G20 Secretariat
Institution	Africa Quota / Share	Africa Voting Power	G7 Voting Power	Structural Imbalance
IMF	~8.4%	~8.0%	~43%	G7 has 5.4× Africa's vote share
World Bank	~6.5%	~6.5%	~41%	G7 has 6.3× Africa's vote share
BIS	<2%	<2%	>60%	Minimal Africa participation in standard-setting
G20	1 seat (AU, since 2023)	~5%	~65%	AU holds observer-equivalent influence only
AfDB	~60%	~60%	~25%	Most equitable GFA institution for Africa
FATF (AML/CFT Standards)	~5% (ESAAMLG/GIABA)	~5%	>50%	Rules set without adequate Africa input

TABLE 17 · GFA Reform Agenda — Status and Impact, 2024–2025 | Sources: IMF, G20 Research, UNCTAD, UNECA, AfDB 2024
Reform Area	Proposal	Championed By	Status (2025)	Impact if Implemented
IMF Quota Reform	Double Africa's IMF quota share	AU, G24, UNECA	Stalled — 17th Review delayed	More SDR access; greater GFA voice
SDR Reallocation	Rich nations re-channel SDRs to poorest	AU, G77, UNECA	~20% pledged; slow	Could boost Africa reserves by $100Bn+
Common Framework	Faster, fairer debt restructuring	G20, AU	Slow — creditor holdout issues	Ghana & Zambia deals: partial precedents
Credit Rating Reform	New sovereign rating methodology for LICs	UNCTAD, AU, AfDB	Under discussion at UN/G20	Reduced risk premiums; fairer access
MDB Capital Increase	Triple MDB lending by 2030 (G20 Expert Panel)	G20, V20, EU	Partial commitments secured	$500Bn+ more for development finance
Climate Finance Reform	Loss & Damage Fund (COP28 operationalized)	UNFCCC, AU, V20	Fund agreed; capitalization ongoing	New grants for climate-vulnerable nations
Africa Rating Agency	Sovereign rating institution led by Africans	AfDB, AU	Feasibility study stage	Reduce external credit rating dependency

TABLE 18 · Policy Recommendations for Africa's GFA Engagement | Evidence grounded in Sections 2–7
#	Recommendation	Evidence Base	Timeframe	Key Actor(s)
1	Accelerate GFA quota reform through AU-G24 bloc coordination	Africa holds <8% IMF voting share vs. 43% G7	Near-term (2025–26)	AU Commission, G24, UNECA
2	Push for full SDR reallocation to close climate finance gap	Only 20% pledged; Africa needs $143Bn/year	Near-term	AU, G77, AfDB
3	Scale AfCFTA to reduce trade finance dependency	FDI hit $97Bn; intra-Africa trade still ~17%	Medium-term (2025–30)	AU, RECs, Afreximbank
4	Accelerate Common Framework for debt restructuring	48 DSSI countries; only 4 in Common Framework	Immediate	G20, AU, creditor groups
5	Establish Africa Sovereign Rating Agency	SSA pays ~950bp over US Treasuries	Medium-term	AfDB, AU, Private sector
6	Operationalize PAPSS for intra-African settlement	Reduces USD dependency; Afreximbank-led	Near-term	Afreximbank, Central Banks

TABLE 19 · Policy Recommendations for Tanzania's GFA Strategy | Evidence grounded in Sections 6.1–6.5
#	Recommendation	Evidence Base	Timeframe	Lead Institution
1	Leverage PSI to unlock larger IDA/AfDB envelopes	WB provided $11.6Bn 2020–25	Near-term	MoF, BoT
2	Target tax-to-GDP from ~13% toward 18%	Budget deficit ~3% GDP; debt $35.3Bn	Medium-term	TRA, MoF
3	Build forex reserves to 6+ months import cover	TZS -9.6% YoY; CA -4.2% GDP	Near-term	Bank of Tanzania
4	Issue first green/blue bond	AfDB $156M green growth; larger pipeline	Medium-term	MoF, CMSA, DSE
5	Deepen government bond market to 20% GDP	No sovereign bond market; concessional dependency	Medium-term	BoT, CMSA, DSE
6	Engage Common Framework proactively	Ghana $9.3Bn; Zambia $6.3Bn precedents	Near-term	MoF, BoT
7	Monetize LNG and critical minerals via blended finance	FDI $1.72Bn in 2024; LNG future driver	Long-term	MoF, TPDC, TIC, MEM

TABLE 20 · Complete Data Sources Referenced in this Integrated Research Paper
Institution / Source	Publication / Dataset	Period Covered	Key Data Contributed
IMF	World Economic Outlook (WEO)	2020–2025	GDP, debt, growth, exchange rates, fiscal space
IMF	Africa Regional Economic Outlook	2020–2024	Crisis response, fiscal space, ECF/RCF data
IMF	Global Financial Stability Report (GFSR)	2023–2024	Bond yields, sovereign spreads, credit ratings
IMF	Article IV Consultation — Tanzania	2023–2024	Tanzania macro data, PSI assessment
World Bank	World Development Indicators (WDI)	2020–2024	FDI, debt, social indicators, climate finance
World Bank	International Debt Statistics (IDS)	2020–2024	External debt by country, debt service ratios
AfDB	African Economic Outlook	2023–2024	Infrastructure gap, climate finance, green growth
UNCTAD	World Investment Report	2023–2024	FDI inflows to Africa (including 2024 record $97Bn)
ONE Data	Africa Debt & Development Finance	2023–2024	External debt projections, debt service data
Afreximbank	Annual Report & Trade Data	2023–2024	Trade finance, PAPSS, intra-Africa trade
Bank of Tanzania	Annual Reports & Financial Stability Reports	2020–2025	Tanzania FDI, debt, TZS exchange rates, reserves
Tanzania NBS	National Accounts & Trade Statistics	2020–2024	Tanzania GDP, sectoral data, trade flows
Tanzania MoF	Budget Framework Papers	2020–2025	Tanzania development financing, budget deficits
S&P Global / Bloomberg	Sovereign Ratings & Bond Market Data	2023–2024	African credit ratings, sovereign yields, spreads
G20 Secretariat	DSSI Tracker & Common Framework Reports	2020–2024	Debt relief data, Common Framework progress
UNECA	Economic Report on Africa	2023–2024	Policy analysis, GFA reform agenda, SDR data

Introduction: A Structural, Not Cyclical, Deficit

Tanzania's budget deficit is not a temporary fiscal imbalance driven by short-term shocks. Rather, it reflects deep structural dynamics within the country's public finance system. Despite consistent improvements in revenue collection — particularly by the Tanzania Revenue Authority (TRA) — the fiscal gap persists at around 3–4% of GDP annually, signaling that the deficit is rooted more in expenditure rigidity, debt dynamics, and institutional fiscal design than in revenue underperformance alone.

This comprehensive analysis examines the paradox at the heart of Tanzania's fiscal challenge: TRA achieves 100.5% to 108.4% of its collection targets, yet the government budget remains structurally inadequate. Three interlocking forces explain this phenomenon — extensive expenditure obligations consuming 68.3% of the budget for recurrent costs, substantial debt servicing absorbing over 16% of revenues, and weak Local Government Authority (LGA) revenues failing to match the scale of economic activities in their jurisdictions.

📉

Narrow Tax Base

Tax-to-GDP at 12.9% vs. 16% SSA average. Every 1pp increase = TZS 2.7–3.0T extra revenue.

🔒

Rigid Recurrent Spending

47.2% of budget committed to wages + interest before a single service is delivered.

⛓

Debt Servicing Drain

TZS 7.8 trillion in annual debt service. For every TZS 6 collected, TZS 1 goes to creditors.

🏘

Weak LGA Revenue

185 LGAs collect only TZS 1.36T/yr, just 2.8% of the national budget, despite hosting 40–50% of GDP activity.

🏗

Ambitious Development Agenda

SGR, JNHPP, Vision 2050 commitments require sustained capital outlay beyond fiscal space.

🔍 Key Finding

Even with TRA collecting TZS 82.6 billion above target in H1 2024/25, Tanzania still faces a budget deficit of 3.4% of GDP — a TZS 1.68 trillion shortfall — demonstrating that revenue performance alone cannot bridge the gap created by structural expenditure pressures.

Historical Budget Deficit Trend: Tanzania 1991–2030

Budget Balance as % of GDP — Historical & Projected

Historically, Tanzania's fiscal balance has averaged approximately –3% to –5% of GDP over the past three decades, with peaks of widening deficits during periods of heavy infrastructure investment and external shocks. Early surpluses in the mid-1990s gave way to persistent deficits following liberalization, with the deepest trough in 2010 (–4.74%) following the global recession. Recent fiscal consolidation has narrowed the gap, but structural forces keep it above the EAC's 3% convergence criterion.

Tanzania Budget Balance as % of GDP (1991–2030)

Negative = Deficit · EAC Criterion: –3.0% · Projected values shown with dashed line

Recent years show a pattern of structural persistence rather than cyclical volatility:

2022

–3.92%

Post-pandemic recovery spending widened gap

2023

–3.67%

Above EAC 3% threshold

2024

–3.03%

Modest improvement; still above EAC

2025–26

~–3.0%

Projected target — structurally challenging

Table 1 — Tanzania Budget Balance (% of GDP), 1991–2030

Year	Budget Balance (% GDP)	Trend	Period Context
1991	+0.61%	▲ Surplus	Pre-liberalization
1992	–4.96%	▼ Deficit	Liberalization shock
1996	+1.57%	▲ Surplus	ESAP stabilization
2004	–2.43%	▼ Deficit	Infrastructure push
2009	–4.46%	▼ Deficit	Global recession
2010	–4.74%	▼ Deepest	Post-recession spending
2017	–1.14%	▲ Narrowest	Revenue reforms
2022	–3.92%	▼ Deficit	COVID-19 recovery
2023	–3.67%	▼ Deficit	Expenditure pressure
2024	–3.03%	~ Stable	Consolidation
2025 (proj.)	–2.98%	▲ Improving	Fiscal reform
2026 (proj.)	–3.02%	~ Stable	Budget expansion risk
2027–30 (proj.)	~–3.0%	~ Flat	Structural floor

⚠ EAC Benchmark

The East African Community (EAC) sets a maximum fiscal deficit of 3% of GDP as a convergence criterion. Tanzania has exceeded this threshold in 2021/22, 2022/23, and 2024/25, reflecting the structural nature of the fiscal gap.

Revenue Performance: Strong but Structurally Insufficient

TRA Exceeds Targets — Yet the Fiscal Gap Persists

Over the past two fiscal years, revenue performance has improved significantly. The Tanzania Revenue Authority (TRA) exceeded annual targets by approximately 3–4 percent. Yet this achievement conceals a deeper paradox: the national revenue base itself remains structurally narrow relative to the size of government commitments.

TRA Revenue Collection vs. Targets — Recent Fiscal Years

TZS Trillion · Shows consistent overperformance while deficit persists

Table 2 — TRA Revenue Collection Performance

Period	Target (TZS T / B)	Actual Collection	Achievement	Above Target
FY 2023/24 (Full Year)	TZS 28.9T	TZS 29.8T	103.1%	+TZS 0.9T
FY 2024/25 (Full Year)	TZS 31.5T	TZS 32.26T	103.0%	+TZS 0.76T
July 2024 (Monthly)	TZS 2.247T	TZS 2.347T	104.5%	+TZS 100B
January 2025 (Monthly)	~TZS 3.57T	TZS 3,877B	108.6%	+TZS 307B
H1 2024/25 (Jul–Dec)	TZS 14,874.9B	TZS 15,111.6B	101.6%	+TZS 236.7B
May 2025 (Monthly)	~TZS 2.79T	TZS 2,880B	103.1%	+TZS 86.9B

⚡ The Core Paradox

Even in January 2025 — when TRA achieved 108.6% of its monthly target — total revenues could not cover expenditure of TZS 3,806B, and the annual deficit remained at 3.4% of GDP. The structural gap is expenditure-driven, not a revenue collection failure.

The Tax-to-GDP Structural Gap

The core structural issue lies in Tanzania's tax-to-GDP ratio, which remains at approximately 12–13 percent. This falls short of multiple key benchmarks:

Tax-to-GDP Ratio: Tanzania vs. Benchmarks

Tanzania's structural revenue gap relative to regional and global standards

Tanzania (Current) 12.9%

Sub-Saharan Africa Average ~16%

Minimum Efficiency Benchmark 15%

Long-term Fiscal Sustainability Target 18%

Tanzania TRA Target (2027) 15%

Note: Bar width scaled proportionally to 26.4% upper bound for display clarity.

📐 Revenue Gap Calculation

Nominal GDP (2026 est.) ≈ TZS 275 Trillion

Every +1pp in tax-to-GDP = TZS 2.7–3.0 Trillion in additional revenue

Current gap below 15% benchmark ≈ 2.1 percentage points

⟹ Structural revenue shortfall = TZS 5.7–6.3 Trillion annually

Therefore, even when TRA exceeds its internal targets, the national revenue base itself remains structurally narrow relative to the size of government commitments. Closing this gap requires formalizing the informal economy — estimated at 50–65% of GDP and outside the tax net — rather than merely improving compliance within the existing base.

Table 3 — Tanzania vs. EAC/SSA Fiscal Benchmarks

Indicator	Tanzania (2024/25)	Benchmark	Gap	Status
Tax-to-GDP Ratio	12.9%	15% minimum	–2.1 pts	⚠ Below target
Budget Deficit	3.4% of GDP	3% (EAC)	+0.4 pts	⚠ Above EAC
Debt-to-GDP	47.3%	55% max	14.4% buffer	✅ Within limit
Interest Payments (% Revenue)	>16%	<10% ideal	+6 pts	🔴 High burden
Development Expenditure %	31.3%	30–35%	On target	✅ On target
Wage Bill % of Budget	32.5%	<35%	Near ceiling	⚠ Near limit

Recurrent Expenditure Rigidity

Non-Discretionary Spending Locks in the Fiscal Gap

A central structural driver of the deficit is the dominance of recurrent expenditure in the national budget. In FY2024/25, recurrent expenditure accounted for approximately 65–69% of total spending, leaving limited space for development investment or fiscal adjustment.

FY2024/25 Budget Composition — Where the Money Goes

TZS Trillion · Total Budget: TZS 30.19 Trillion (expenditure)

Table 4 — Tanzania Expenditure Breakdown FY2024/25 vs FY2025/26

Category	FY2024/25 (TZS T)	% of Total	FY2025/26 (TZS T)	Nature
Recurrent Expenditure	20.75	68.7%	38.6	Non-discretionary
— Wages & Salaries	9.83	32.5%	~12.5	🔒 Fixed / Political
— Interest Payments	4.45	14.7%	~5.0	🔒 Contractual
— Other Charges	~6.47	21.4%	~21.1	Partially flexible
Development Expenditure	9.44	31.3%	16.4	Policy-driven
TOTAL EXPENDITURE	30.19	100%	~55.0	—

⚡ Critical Finding

47.2% of the entire budget (wages TZS 9.83T + interest payments TZS 4.45T = TZS 14.28T) is committed to fixed obligations before any government services are delivered or development projects funded. This leaves only 52.8% for operations, social services, and development — creating constant fiscal pressure.

Table 5 — Mandatory & Committed Expenditure Items FY2024/25

Expenditure Type	Amount (TZS T)	Reason It's Mandatory
Wages & Salaries (32.5%)	9.83	Public sector employment; politically sensitive — not reducible short-term
Debt Servicing (14.7%)	4.45	Contractual obligations; defaulting has severe credit & reputation consequences
Development Budget Mandate (31.3%)	9.44	Government policy commits 30–40% to development for growth targets
Fee-free Education Policy	~3.0	Constitutional commitment; essential social service
Infrastructure (SGR, JNHPP)	~5.0	Vision 2025/2050 multi-year contracts already signed
Elections (2024/2025)	~1.0	Constitutional requirement — unavoidable

This means that nearly half of all government expenditure (wages + interest) is effectively non-discretionary. When fixed obligations consume nearly 47–50% of the budget before service delivery expansion or new development priorities are considered, fiscal flexibility becomes structurally constrained. Any increase in revenue tends to be absorbed by rising wage costs, inflation-indexed spending, or debt servicing adjustments.

📐 The Budget Equation — Why Revenue Success ≠ Fiscal Adequacy

Revenue Available: TZS 28.12 Trillion

minus Wages (9.83T) + Interest (4.45T) + Other Recurrent (6.47T)

= Remaining: TZS 7.37 Trillion

BUT required: Development (9.44T) + Elections + Social Programs = TZS 11+ Trillion

⟹ STRUCTURAL DEFICIT: TZS 3.63+ Trillion (3.4% of GDP)

Data Sources: Ministry of Finance and Planning (Tanzania), Tanzania Revenue Authority (TRA) Monthly Reports, Bank of Tanzania (BoT), PO-RALG LGA Revenue Reports, IMF Article IV Consultation (2025), World Bank Tanzania Economic Updates. | Period: FY2022/23–FY2026/27 (projected). | Compiled by: TICGL Research Division, February 2025.

Rising Debt Servicing Burden

How Borrowed Yesterday Crowds Out Tomorrow

Public debt dynamics represent one of the most acute structural pressures on Tanzania's fiscal position. As debt stock has grown to finance infrastructure and development programs, servicing obligations have expanded to the point where they now consume a significant and growing share of government revenue — creating a self-reinforcing constraint on fiscal space.

TZS 125.5T

Total Public Debt (March 2025)

47.3% of GDP

>16%

Interest-to-Revenue Ratio

Ideal benchmark: <10%

TZS 7.8T

Annual Debt Service FY2026/27

Up ~13% year-on-year

30–35%

Revenue Absorbed in Peak Quarters

By debt servicing alone

Table 6 — Tanzania Public Debt Structure (March 2025)

Debt Indicator	Amount / Value	Fiscal Impact
Total Public Debt	TZS 125.55 trillion	47.3% of GDP — below 55% EAC threshold
Domestic Debt	TZS 34.26 trillion	28.7% of total debt; interest rate 8–10%
External Debt	USD 34.1 billion	71.3% of total debt; rate 1–4% (concessional)
Annual Interest Payments (FY2024/25)	TZS 4.45 trillion	14.7% of total expenditure; 16%+ of revenue
Domestic Interest Payments (Annual)	TZS 5.31 trillion	Crowds out private sector credit growth
External Debt Servicing	USD 1–2 billion/year	Exchange rate vulnerability risk
Debt Service (Total FY2026/27 proj.)	TZS 7.8 trillion	12.6% of proposed TZS 61.9T budget

Debt Servicing as % of Revenues — FY2022/23 to FY2026/27

Escalating share of revenues diverted to creditors · TZS Trillion

Table 7 — Debt Servicing Trend: Revenue Absorption FY2022/23–2026/27

Fiscal Year	Total Debt Service (TZS T)	As % of Revenues	As % of Budget Expenditure	Trend
FY 2022/23	9.09	28.5%	22.1%	↑ Rising
FY 2023/24	10.20	31.0%	24.5%	↑ Rising
FY 2024/25 (proj.)	11.50	34.0%	26.0%	↑ Rising
FY 2025/26 (est.)	~6.9	~18%	~12.5%	~ Stable
FY 2026/27 (proj.)	7.80	~16.7%	12.6%	↑ Rising

⛓ Crowding-Out Effect

High domestic borrowing — accounting for 60% of deficit financing — raises domestic interest rates and reduces private sector credit growth from 15% (2010s) to ~10% post-2020. Funds that could be allocated to education, health, or infrastructure are diverted to creditors. Even if revenues grow by 20–25% annually, debt service obligations grow proportionally, limiting net fiscal space creation.

Table 8 — Debt Sustainability Assessment FY2025/26 → FY2026/27

Debt Metric	FY2025/26 Value	FY2026/27 Projected	Sustainability Assessment
Debt-to-GDP Ratio	40.6%	~39.5% (Declining)	Low Risk — below 55%
Annual Debt Service (TZS T)	~7.0	7.8	Manageable (15–20% of rev.)
Borrowing Composition	50% concessional	Prioritized	Stable — minimizes costs
Interest-to-Revenue Ratio	>16%	~16.7%	High — ideal is <10%
External Debt Service (USD)	USD 1–2B/yr	USD ~1.5B	FX exposure risk

📐 Debt Service Impact Calculation

For every TZS 100 collected by TRA:

→ TZS 16 immediately goes to interest payments

→ Only TZS 84 available for wages, services, development

Annual interest (TZS 4.45T) vs. development spending (TZS 9.44T) = 47% ratio

⟹ Nearly half of all development investment is "cost" before any project begins

Structural Weakness in LGA Revenue Mobilization

Local Government Authorities Collect Only a Fraction of What Their Economies Generate

A further structural driver of the national budget deficit lies in fiscal centralization and weak own-source revenue at the Local Government Authority (LGA) level. Tanzania's 185 LGAs (districts and councils) generate own-source revenues far below the scale of local economic activities, creating a dependency on central government transfers that reinforces national fiscal pressure.

TRA — Central Revenue

TZS 15.1T

Collected in 6 months (H1 2024/25) · 101.6% of target

185 LGAs Combined — Local Revenue

TZS 697.8B

Collected in same 6 months · 103.5% of target
Just 4.6% of TRA's collection despite hosting vast economic activity

LGA Revenue vs. TRA — The Scale Mismatch

TZS Trillion · All 185 LGAs combined vs. TRA · H1 FY2024/25

Table 9 — LGA Own-Source Revenue Performance

Period	LGA Collection (TZS B)	Target Achievement	Share of Total Domestic Revenue
Q2 FY2024/25 (Oct–Dec)	342.1	99.2%	~2.0%
H1 FY2024/25 (Jul–Dec)	697.8	103.5%	4.0% of TRA total
FY2023/24 (Annual)	1,132	102.9%	3.5% of domestic revenue
FY2024/25 Target (Annual)	1,360	100% target	2.8% of national budget
FY2025/26 Target (Annual)	1,680	100% target	3.0% of national budget

Table 10 — Economic Activity in LGA Jurisdictions vs. Revenue Captured (FY2023/24)

Sector	Activity in LGAs	% of National GDP	Revenue Capture Challenge
Agriculture & Livestock	Majority in rural LGAs; TZS 20–30T annual value	24.5–26.5%	Informal sector; limited taxation capacity; <TZS 5B/LGA
Wholesale & Retail Trade	Markets, shops, street vendors across 185 LGAs	18.2%	Low license fees; weak enforcement
Construction	Building permits issued at LGA level	13.2%	Under-collection of permit fees
Informal Economy	Street trade, small-scale farming, boda-boda	~50%	Entirely outside tax net; only 20% of potential taxes realized
Property / Land	Transfers, rentals across all LGAs	Significant	Weak property tax system; outdated valuations
Mining (small-scale)	Artisanal mining in multiple LGAs	9% total	Large mines pay central govt (TRA), not LGAs

Root Causes of LGA Revenue Weakness

📋

Narrow Revenue Base

LGAs are restricted to licenses, permits, and market fees — unable to capture VAT, income tax, or corporate tax, all of which flow to TRA.

📅

Outdated By-Laws

Many LGAs still use 2012 bylaws with fees too low relative to current inflation. A market stall permit may still cost what it did a decade ago.

💻

No Digital Systems

Unlike TRA's EFD (Electronic Fiscal Devices), most LGAs use manual collection — creating leakage, fraud, and no audit trail.

🗳

Political Constraints

Locally elected officials face voter resistance to fee increases, creating political disincentives to improve revenue mobilization.

👥

Staff Capacity Gaps

Insufficient revenue officers across 185 LGAs cannot monitor all economic activities; internal controls remain weak per CAG findings.

⚖️

Structural Imbalance

LGAs are mandated to deliver primary education, health, local roads, and water — costs that far exceed their revenue capacity, forcing dependency on central grants.

Table 11 — LGA Fiscal Reality and National Budget Impact

LGA Fiscal Indicator	Value / Impact
LGA own-source revenue (annual)	TZS 1.36 trillion (2.8% of national budget)
LGA total budget (incl. central transfers)	TZS 15.8 trillion (48% of recurrent spending)
Central government grants to LGAs	TZS 4.66 trillion added pressure on national budget
LGA dependency on central transfers	80–90% of LGA budgets
Potential digital reform gains	+30% boost in LGA collections (World Bank est.)
Economic activities in LGA jurisdictions	Agriculture (26.5% GDP), trade, construction, services
Revenue realized from local economic activities	<5% of potential — only 20% of taxes realized

⚠ Structural Mismatch

Local Government Authorities preside over billions of shillings in economic transactions daily — agriculture, trade, construction, services — yet collect only TZS 1.36 trillion annually across all 185 LGAs. That is less than 5% of TRA's collection. This forces the central government to fund both national and local functions, adding TZS 4.66 trillion to the national fiscal burden and reinforcing the deficit.

LGA Revenue: Current vs. Reform Potential (TZS Trillion)

Estimated gains from digital systems, by-law updates and capacity building

Expansionary Development Commitments

Vision 2050 Ambitions vs. Available Fiscal Space

Tanzania has pursued an ambitious development agenda including the Standard Gauge Railway (SGR), Julius Nyerere Hydropower Project (JNHPP), strategic industrialization, and the long-term Vision 2050 goals. These commitments require sustained capital expenditure that consistently pushes total spending beyond what domestic revenues can support — a key structural contributor to the persistent deficit.

Table 12 — Major Development Commitments and Fiscal Impact

Project / Commitment	Estimated Cost	Fiscal Impact	Status
Standard Gauge Railway (SGR)	USD 7.6B+ total	Multi-year debt obligations; ~TZS 2–3T/yr	🔄 Ongoing
Julius Nyerere Hydropower Project (2,115 MW)	USD 2.9 billion	TZS 7.4T in FY2026/27 borrowing for dev. projects incl. JNHPP	🔄 Nearing completion
LNG Development (Lindi)	USD 30B+ (long-term)	Infrastructure investment; potential future revenue	🟡 Planning stage
AFCON 2027 Preparations	Allocated in budget	Stadium & infrastructure; one-time international commitment	🔄 Ongoing
Fee-Free Education Policy	~TZS 3.0T/yr	Permanent recurrent commitment; cannot be reversed	🔒 Permanent
Vision 2050 Industrialization	Long-term	SEZ, EPZ, industrial parks — sustained capital outlay	🔄 Multi-decade

📌 Structural Tension

While GDP growth is projected at 6.3% real growth in 2026, and domestic revenue is expected to rise to TZS 46.7 trillion, grants are projected to decline by nearly 44.8% to just TZS 563.1 billion — increasing reliance on domestic resources and borrowing. Without structural reform, expansion risks pushing the deficit beyond the targeted 3% of GDP if growth assumptions or revenue projections underperform.

FY2026/27 Budget Expansion: Sustainability Assessment

Is the Proposed 10% Expansion Fiscally Sustainable?

🔭

The Proposed Expansion: TZS 61.9–61.93 Trillion (+9.6%)

Tanzania's proposed FY2026/27 budget represents a historic 9.6% expansion from TZS 56.49 trillion in FY2025/26 — aligning with Vision 2050 goals for industrialization and infrastructure. This section assesses whether this expansion is fiscally sustainable given Tanzania's structural fiscal constraints.

Table 13 — Tanzania Budget Size and Growth Trajectory

Fiscal Year	Budget (TZS Trillion)	% Change YoY	As % of Nominal GDP
FY2021/22	~42.0	—	~19.0%
FY2022/23	~43.5	+3.6%	~19.5%
FY2023/24	44.4	+2.1%	~19.8%
FY2024/25	50.29	+13.3%	~21.4%
FY2025/26	56.49	+12.3%	~22.0%
FY2026/27 (Proposed)	61.9–61.93	+9.6%	~22.5%

Tanzania Budget Expansion Trajectory FY2021/22 – FY2026/27

TZS Trillion · Showing accelerating expenditure growth

Table 14 — Revenue Projections: FY2025/26 vs. FY2026/27

Revenue Source	FY2025/26 (TZS T)	FY2026/27 Projected (TZS T)	% Change	Share of Budget
Domestic Revenue (Total)	38.9	46.69	+20.0%	75.4%
— Tax Revenue (TRA)	29.17	36.9	+26.5%	59.6%
— Other Revenues	9.73	9.24	–5.0%	14.9%
Grants from Development Partners	1.02	0.563	–44.8%	0.9%
Total Borrowing	15.0	15.24	+1.6%	24.6%
Total Budget Financing	~55.0	61.9	+9.6%	100%

Table 15 — FY2026/27 Expenditure and Deficit Implications

Category	FY2026/27 Allocation (TZS T)	% of Budget	Key Notes
Recurrent Expenditures	~46.7 (estimated)	~75%	Public sector wage bill up ~15% historically
Development Expenditures	~7.4 (borrowing portion)	~12%	Infrastructure: LNG, SGR, JNHPP continuation
Debt Servicing	7.8	12.6%	Stable but rising ~13% YoY
Overall Deficit Target	~3% of GDP	N/A	Relies on 6.3% GDP growth; risk of widening to 3.5–4%

Table 16 — FY2026/27 Fiscal Risk Assessment

Risk Factor	Potential Impact on Deficit	Risk Level	Mitigation
Declining Grants (–44.8%)	+0.5–1.0% GDP widening	High	Boost TRA to 18% tax-to-GDP
Climate Shocks (Agriculture: 26% GDP)	Revenue shortfalls 5–10%	High	Diversify exports; build contingency reserves
Post-2025 Election Uncertainty	FDI drop ~10%; investment slowdown	Medium	Private sector partnerships (70% of FYDP IV)
Global Commodity Price Volatility	Inflation up 2–3%; import costs rise	Medium	Maintain ~3% deficit cap as fiscal anchor
Revenue Projection Underperformance	TRA target miss → deficit widening	Medium	Multi-year medium-term expenditure framework
Wage Bill Overrun	Exceeds 35% of budget ceiling	Medium	Strict payroll controls; freeze new hiring

FY2026/27 Revenue vs. Expenditure — Three Scenarios

Base case vs. optimistic vs. stress scenario · TZS Trillion

⚠ Sustainability Verdict

The FY2026/27 expansion is conditionally sustainable if revenues hit targets and GDP growth sustains at 6.3%. However, a combination of declining grants (–44.8%), rising debt service (+13% YoY), and historical patterns of spending overruns creates meaningful risk of slippage above the 3% deficit target. The structural gap remains unless tax-to-GDP rises by at least 1–2 percentage points and LGA revenue mobilization is accelerated.

✦

Conclusion & Policy Recommendations

Addressing the Root Causes — Not Just the Symptoms

A Structural, Not Cyclical, Deficit

Tanzania's budget deficit cannot be solved through revenue collection improvements alone. The paradox of TRA consistently exceeding targets while the budget remains inadequate reveals a fundamental mismatch: the country's ambitious development agenda, legacy debt obligations, and insufficient revenue mobilization at the local government level create a recurring fiscal gap of approximately TZS 3–7 trillion annually — equivalent to around 3% of GDP.

Five structural forces sustain this gap regardless of TRA's performance: (1) a tax base too narrow at 12.9% of GDP, (2) 47.2% of the budget locked in non-discretionary wages and interest before services begin, (3) rising debt service consuming 30–35% of revenues in peak quarters, (4) 185 LGAs collecting only 2.8% of the national budget despite hosting over 40% of GDP, and (5) multi-decade development commitments exceeding available fiscal space.

12.9% tax-to-GDP → target 15–18% 47.2% non-discretionary spending TZS 7.8T annual debt service 185 LGAs = 2.8% of budget only TZS 61.9T proposed FY2026/27

Policy Recommendations

💰

Revenue-Side Reforms

Accelerate tax-to-GDP ratio from 12.9% to 15% target by 2027 through broadening the base, not just improving compliance in the existing base.

Formalize the informal sector — estimated at 65% of the workforce and currently outside the tax net — through tiered presumptive tax systems and digital registration incentives.

Expand IDRAS (Integrated Domestic Revenue Administration System) nationwide to reduce leakage, improve compliance, and create a real-time fiscal monitoring framework.

Target tax-to-GDP of 18% as a long-term fiscal sustainability goal, which would generate an additional TZS 14–15 trillion annually at 2026 nominal GDP levels.

✂️

Expenditure-Side Reforms

Restructure domestic debt to reduce the interest burden from over 16% to below 10% of revenue, shifting to longer-tenor concessional instruments where possible.

Implement strict wage bill controls to prevent exceeding the 35% of budget ceiling — particularly as FY2026/27 proposes a further 15% wage bill increase.

Prioritize high-return development projects that generate future revenue (energy, ports, tourism infrastructure) over prestige projects with limited fiscal multipliers.

Cut non-essential recurrent expenditures by 10% through procurement rationalization, subsidy review, and operational efficiency gains.

🏘

Local Government Revenue Reforms

Expand LGA revenue sources beyond market fees and business licenses — introduce property tax systems, service fees aligned with economic activities, and tourism levies.

Update LGA bylaws across all 185 councils with realistic fee structures that reflect current inflation and economic values (many still use 2012 rates).

Implement digital revenue collection systems in all 185 LGAs — World Bank estimates this alone could boost LGA collections by 30%, adding TZS 400–500 billion annually.

Strengthen internal audit and control systems to prevent fraud and revenue leakage identified by the Controller and Auditor General (CAG) in successive annual reports.

📅

Medium-Term Fiscal Planning

Adopt a credible medium-term expenditure framework (MTEF) with budgets averaging TZS 68 trillion/year through 2028/29, anchored to realistic revenue projections rather than optimistic targets.

Maintain the EAC 3% deficit ceiling as a hard fiscal rule, with automatic expenditure adjustments triggered if revenue underperforms by more than 5%.

Focus on concessional debt for major projects to minimize borrowing costs — the current 1–3% rate on 25–40 year external loans versus 8–10% on domestic debt represents a significant fiscal advantage.

Build a fiscal stabilization reserve of at least 0.5% of GDP to buffer against climate shocks, commodity price swings, and other external vulnerabilities.

Table 17 — Summary: Five Structural Drivers & Required Reforms

Structural Driver	Current State	Target / Reform	Fiscal Impact if Achieved
Narrow Tax Base	12.9% tax-to-GDP	15–18% tax-to-GDP by 2027–2030	+TZS 5.7–14T additional annual revenue
Recurrent Expenditure Rigidity	47.2% of budget non-discretionary	Wage bill below 35%; interest below 10% of revenue	+TZS 2–4T fiscal space released
Rising Debt Service	16%+ of revenue; TZS 7.8T FY2026/27	Debt restructuring; concessional focus; below 10% of revenue	Deficit narrows by 0.5–1.0% of GDP
Weak LGA Revenue	TZS 1.36T/yr (2.8% of budget)	Digital systems + bylaw updates → +30%	+TZS 400–500B; reduce central transfers
Excessive Development Commitments	Exceeds fiscal space annually	MTEF prioritization; high-return project focus	Deficit stabilized at 2.5–3.0% of GDP

✅ Final Assessment

Tanzania's budget deficit challenge is not a failure of revenue collection — TRA consistently exceeds targets and demonstrates strong institutional capacity. Rather, it reflects a fundamental mismatch between the country's ambitious development agenda, legacy debt obligations, and insufficient revenue mobilization at the local government level. Without structural reforms addressing all five drivers simultaneously, even perfect tax collection will not close the budget gap. The solution requires both expanding the revenue base and rationalizing expenditure priorities, while managing debt more sustainably — and this analysis provides the roadmap for how Tanzania can achieve fiscal sustainability by FY2028/29.

Data Sources: Ministry of Finance and Planning (Tanzania), Tanzania Revenue Authority (TRA) Monthly & Annual Reports, Bank of Tanzania (BoT), PO-RALG LGA Revenue Reports, IMF Article IV Consultation (2025), World Bank Tanzania Economic Updates, Controller and Auditor General (CAG) Annual Reports. | Period covered: FY2022/23–FY2026/27 (projected). | Compiled by: TICGL Research Division — Tanzania Investment and Consultant Group Ltd, February 2025.

Fiscal Year	Budget (TZS Trillion)	Budget (USD Billion)	YoY Growth (%)	% of GDP	GDP Growth (%)
2015/16	29.51	13.2	—	~26%	7.0
2020/21	36.70	15.8	~8.5%	~24%	4.9
2024/25	49.35	18.9	10.8%	~21%	5.5
2025/26	56.49	22.1	12.3%	~23%	6.0
2026/27	61.93	24.2	9.6%	~24%	6.3

Period	Deficit (% GDP)	Debt-to-GDP (%)	GDP Growth (%)	Context
2013	~-2.5	32.7	7.3	Pre-infrastructure boom
2020	~-3.2	41.0	2.0	COVID-19 pandemic impact
2023	~-3.3	53.4	5.3	Peak debt-to-GDP ratio
2024/25	-3.4	47.3	5.5	Election year spending
2025/26	-3.0	40.6	6.0	Fiscal consolidation target
2026/27	-3.0	~38-40	6.3	Revenue-led expansion

Budget Component	Amount (TZS Trillion)	% of Budget	% of GDP
TOTAL BUDGET	56.49	100.0%	~23%
Domestic Revenue	40.47	71.6%	16.7%
Tax Revenue	32.31	57.2%	13.3%
Non-Tax Revenue	6.48	11.5%	2.7%
Local Government Revenue	1.68	3.0%	0.7%
External Grants	1.07	1.9%	0.4%
Total Borrowing	14.95	26.5%	6.2%
Domestic Loans	6.27	11.1%	2.6%
External Loans	8.68	15.4%	3.6%

Financing Source	2025/26 (TZS T)	2026/27 (TZS T)	Change (Amount / Share)	Growth Rate
Domestic Revenue	40.47 (71.6%)	46.69 (75.4%)	+6.22 / +3.8pp	15.4%
Tax Revenue	32.31	36.90	+4.59	14.2%
Non-Tax Revenue	6.48	8.11	+1.63	25.2%
LGA Revenue	1.68	1.68	±0.00	0.0%
Total Borrowing	14.95 (26.5%)	15.24 (24.6%)	+0.29 / -1.9pp	1.6%
TOTAL BUDGET	56.49	61.93	+5.44	9.6%

Revenue Component	2024/25	2025/26	2026/27	2-Year Growth	CAGR
Tax Revenue	TZS 28.46T	TZS 32.31T	TZS 36.90T	+29.7%	13.9%
Non-Tax Revenue	TZS 5.85T	TZS 6.48T	TZS 8.11T	+38.6%	17.7%
LGA Revenue	TZS 1.52T	TZS 1.68T	TZS 1.68T	+10.5%	5.1%
Total Domestic Revenue	TZS 35.83T	TZS 40.47T	TZS 46.69T	+30.3%	14.1%
External Grants	TZS 0.98T	TZS 1.07T	TZS 1.20T	+22.4%	10.6%
Total Borrowing	TZS 12.54T	TZS 14.95T	TZS 15.24T	+21.5%	10.3%

Risk Category	Probability	Impact	Overall Risk	Trend	Key Mitigation
Revenue Shortfall	Medium	High	Medium-High	↓ Improving	TRA modernization, digital systems
Currency Depreciation	Medium	Medium	Medium	→ Stable	Forex reserves, export diversification
Debt Service Pressure	Low	Medium	Low-Medium	↓ Improving	Concessional financing priority
Budget Execution	High	High	High	↓ Improving	Procurement reform, capacity building
Global Economic Shock	Medium	High	Medium-High	↑ Increasing	Fiscal buffers, economic diversification
Inflation Acceleration	Low	Medium	Low-Medium	→ Stable	Monetary-fiscal coordination

Country	Deficit (% GDP)	Debt-to-GDP (%)	GDP Growth (%)	Inflation (%)	Assessment
Tanzania (2025/26)	-3.0	40.6	6.0	3.5	Strong position
Kenya (2025)	~-4.5	~68	5.0	6.8	High debt stress
Uganda (2025)	~-4.2	~52	5.8	5.2	Moderate risk
Rwanda (2025)	~-5.0	~73	7.2	4.5	High debt, high growth
Ethiopia (2025)	~-3.8	~35	6.5	28.1	Inflation crisis
Developing Economy Avg	-3.5 to -4.0	45-50	4.5-5.5	5-7	Reference

Indicator	Current Status	International Benchmark	Rating	Trend
Budget Deficit (% GDP)	3.0%	3.5-4.0% (Developing)	Excellent	↓ Improving
Debt-to-GDP Ratio	40.6%	55% (Threshold)	Excellent	↓ Improving
Revenue-to-Budget	75.4% (2026/27)	65-70% (Healthy)	Excellent	↑ Increasing
Tax-to-GDP Ratio	13.3%	15% (Recommended)	Good	↑ Increasing
GDP Growth	6.0-6.3%	4.5-5.5% (Developing)	Excellent	↑ Increasing
Inflation Rate	3.5%	5-7% (Developing)	Excellent	→ Stable
Budget Execution	67%	80%+ (Target)	Needs Improvement	→ Stable
Revenue Collection	89.6%	95%+ (Target)	Good	↑ Increasing

Indicator	2025/26 Actual	2027 Projection	2028 Projection	2030 Target
Debt-to-GDP (%)	40.6	38-39	36-38	35-38
Tax-to-GDP (%)	13.3	14.0-14.5	14.5-15.5	15-17
Budget Deficit (% GDP)	3.0	2.8-3.0	2.7-2.9	2.5-2.7
GDP Growth (%)	6.0	6.2-6.5	6.3-6.7	6.5-7.0
Revenue-to-Budget (%)	71.6	73-75	75-77	77-80

Priority	Recommendation	Responsible Entity	Timeline	Impact
URGENT	Implement comprehensive tax administration reforms	TRA, MoF	2026-2027	High
URGENT	Improve budget execution to 80%+	All MDAs, PO-RALG	2026-2028	High
HIGH	Strengthen infrastructure project management	MoW, TANROADS, REA	2026-2030	High
HIGH	Maintain concessional debt focus	MoF, BoT	Ongoing	Medium
MEDIUM	Build fiscal contingency reserves	MoF, BoT	2027-2030	Medium
MEDIUM	Diversify export base beyond gold	MIT, BoT	2026-2030	Medium

Year	GDP (USD Billion)	National Debt (USD Billion)	Debt-to-GDP Ratio (%)	Debt Change (YoY)	GDP Change (YoY)
2020	$63.37	$26.15	41.27%	—	—
2021	$67.84	$29.85	44.00%	+14.2%	+7.1%
2022	$72.95	$33.92	46.50%	+13.6%	+7.5%
2023	$76.66	$37.29	48.64%	+9.9%	+5.1%
2024	$80.14	$39.61	49.43%	+6.2%	+4.5%
2025	$87.44	$43.36	49.59%	+8.5%	+9.1%
Total Change	+$24.07B (+38.0%)	+$17.21B (+65.8%)	+8.32 pp	—	—

Year	GDP Growth (%)	Debt Growth (%)	Growth Differential	Sustainability Trend
2020-2021	+7.1%	+14.2%	-7.1 pp	⚠️ Deteriorating
2021-2022	+7.5%	+13.6%	-6.1 pp	⚠️ Deteriorating
2022-2023	+5.1%	+9.9%	-4.8 pp	⚠️ Deteriorating
2023-2024	+4.5%	+6.2%	-1.7 pp	⚠️ Deteriorating
2024-2025	+9.1%	+8.5%	+0.6 pp	✓ Improving

Year	Calculated Debt (Debt-to-GDP Method)	Official Reported Debt (BoT/MoF)	Variance	Variance %
2020	$26.15	$31.50	-$5.35	-17.0%
2021	$29.85	$34.20	-$4.35	-12.7%
2022	$33.92	$36.80	-$2.88	-7.8%
2023	$37.29	$38.91	-$1.62	-4.2%
2024	$39.61	$42.57	-$2.96	-6.9%
2025 (Mid-year)	$43.36	$42.58	+$0.78	+1.8%
2025 (Dec - Latest)	$43.36	$50.85	-$7.49	-14.7%

Year	Method A: Debt-to-GDP × GDP	Method B: Official Reports (BoT/MoF)	Method C: TZS Converted	Best Estimate (Weighted Avg)
2020	$26.15B	$31.50B	$29.80B	$29.15B
2021	$29.85B	$34.20B	$32.50B	$32.18B
2022	$33.92B	$36.80B	$35.90B	$35.54B
2023	$37.29B	$38.91B	$38.20B	$38.13B
2024	$39.61B	$42.57B	$41.80B	$41.33B
2025 (Mid-year)	$43.36B	$42.58B	$43.00B	$42.98B
2025 (December)	$43.36B	$50.85B	$50.85B	$48.35B

Year	Total Debt (USD Billion)	External Debt (USD Billion)	External %	Domestic Debt (USD Billion)	Domestic %
2020	$31.50	$25.58	81.2%	$5.92	18.8%
2021	$34.20	$27.14	79.4%	$7.06	20.6%
2022	$36.80	$33.60	91.3%	$3.20	8.7%
2023	$38.91	$28.88	74.2%	$10.03	25.8%
2024	$42.57	$29.27	68.7%	$13.30	31.3%
2025 (Mid-year)	$42.58	$28.00	65.8%	$14.58	34.2%
2025 (December)	$50.85	$37.31	73.4%	$13.54	26.6%

Year	Debt Service (TZS Trillion)	Debt Service (USD Billion)	YoY Growth (%)	As % of GDP	Per Capita (USD)
2020	TZS 2.30	$1.00	—	1.58%	$16.95
2021	TZS 3.15	$1.36	+37.0%	2.01%	$22.58
2022	TZS 4.20	$1.79	+33.3%	2.45%	$29.09
2023	TZS 5.80	$2.30	+38.1%	3.00%	$36.51
2024	TZS 7.20	$2.88	+24.1%	3.59%	$44.44
2025	TZS 8.30	$3.12	+15.3%	3.57%	$46.86
Total Growth	+TZS 6.0T (+259%)	+$2.12B (+212%)	—	+1.99 pp	+$29.91

Year	Government Revenue (TZS Trillion)	Debt Service (TZS Trillion)	Debt Service / Revenue (%)	Revenue Growth (%)	Risk Level
2020	TZS 16.50	TZS 2.30	13.9%	—	🟡 Moderate
2021	TZS 19.80	TZS 3.15	15.9%	+20.0%	🟡 Moderate
2022	TZS 24.20	TZS 4.20	17.4%	+22.2%	🔴 Approaching Threshold
2023	TZS 31.20	TZS 5.80	18.6%	+28.9%	🔴 Exceeded Threshold
2024	TZS 39.50	TZS 7.20	18.2%	+26.6%	🔴 Exceeded Threshold
2025	TZS 57.20	TZS 8.30	14.5%	+44.8%	🟡 Below Threshold
Total Change	+TZS 40.7T (+246.7%)	+TZS 6.0T (+259%)	+0.6 pp	+164.7%	—

Currency	Amount (USD Billion)	Percentage of External Debt	Typical Interest Rate Range	Primary Creditors
USD	$25.29	67.8%	2.5% - 7.0%	World Bank, IMF, Commercial Banks
CNY (Chinese Yuan)	$7.09	19.0%	2.0% - 3.5%	China Exim Bank, ICBC
EUR (Euro)	$2.61	7.0%	1.5% - 3.0%	EIB, AfDB, EU Institutions
SDR (Special Drawing Rights)	$1.49	4.0%	0.5% - 1.5%	IMF
JPY (Japanese Yen)	$0.75	2.0%	0.5% - 2.0%	JICA, Japanese Banks
Other Currencies	$0.08	0.2%	Varies	Various bilateral creditors
Total External Debt	$37.31	100.0%	—	—

Year	TZS/USD Exchange Rate	Annual Depreciation (%)	External Debt (USD Billion)	Cost Increase (TZS Trillion)	Cost Increase (USD Equivalent)
2020	2,300	—	$25.58	—	—
2021	2,315	-0.7%	$27.14	TZS 0.41	$0.18
2022	2,330	-0.6%	$33.60	TZS 0.50	$0.22
2023	2,520	-8.2%	$28.88	TZS 5.49	$2.18
2024	2,500	+0.8%	$29.27	TZS -0.59	$-0.24
2025	2,653	-6.1%	$37.31	TZS 5.71	$2.15
Total Impact	—	-15.3%	—	TZS 11.52T	$4.34B

Scenario	TZS Depreciation vs USD (%)	New Debt Value (TZS Trillion)	Implied Debt-to-GDP Ratio (%)	Risk Assessment
Current (Baseline)	0%	TZS 134.9	49.59%	🟢 Current State
Mild Shock	-5%	TZS 141.6	52.06%	🟡 Manageable
Moderate Shock	-10%	TZS 148.4	54.54%	🟡 Approaching Limit
Severe Shock	-15%	TZS 155.1	57.01%	🔴 Exceeded IMF Threshold
Crisis Shock	-20%	TZS 161.9	59.49%	🔴 High Distress Risk
Extreme Crisis	-30%	TZS 175.4	64.45%	🔴 Debt Crisis

Sector	Debt Amount (USD Billion)	Percentage (%)	Expected ROI Timeline (Years)	Revenue Generation
Transport & Infrastructure	$14.92	40.0%	15-25	🟡 Long-term
Energy & Power	$5.60	15.0%	10-15	✓ Revenue-generating
Budget Support	$4.85	13.0%	—	✗ Non-productive
Water & Sanitation	$3.36	9.0%	8-12	🟡 Indirect benefits
Agriculture	$2.99	8.0%	5-10	✓ Productive
Education & Health	$2.61	7.0%	—	🟡 Social returns
ICT & Technology	$1.49	4.0%	5-8	✓ High potential
Tourism & Natural Resources	$0.75	2.0%	3-7	✓ Revenue-generating
Other Sectors	$0.74	2.0%	Varies	Mixed
Total External Debt	$37.31	100.0%	—	—

Project	Total Debt (USD Billion)	Annual Debt Service (USD M)	Actual Revenue (USD M/year)	Revenue vs Target (%)	Performance
Standard Gauge Railway (SGR)	$11.20	$780	$390	50%	🔴 Major Underperformance
Julius Nyerere Hydropower	$2.90	$210	$245	117%	✓ Exceeding Target
Dar es Salaam BRT	$0.68	$52	$38	73%	🟡 Below Target
Bagamoyo Port (Suspended)	$0.45	$35	$0	0%	🔴 No Revenue
National Fiber Optic Backbone	$0.42	$32	$41	128%	✓ Exceeding Target
Kinyerezi Gas Power Plant	$1.20	$95	$102	107%	✓ Meeting Target
Airport Modernization Program	$0.85	$68	$55	81%	🟡 Below Target
Total Major Projects	$17.70	$1,272	$871	68.5%	—

Creditor Type	Amount (USD Billion)	Percentage (%)	Avg. Interest Rate (%)	Avg. Maturity (Years)	Terms
Multilateral (Concessional)	$15.68	42.0%	1.2%	25-30	✓ Favorable
Bilateral (Concessional)	$9.70	26.0%	2.5%	15-20	✓ Favorable
Commercial (Banks & Bonds)	$11.94	32.0%	6.8%	5-10	⚠️ Expensive
Total External Debt	$37.31	100.0%	3.5%	13-18	—
Concessional Total	$25.38	68.0%	1.7%	20-25	✓ Sustainable

Year	Concessional (USD Billion)	Concessional (%)	Commercial (USD Billion)	Commercial (%)	Weighted Avg. Interest Rate
2020	$21.49	84.0%	$4.09	16.0%	2.1%
2021	$22.13	81.5%	$5.02	18.5%	2.3%
2022	$25.20	75.0%	$8.40	25.0%	3.1%
2023	$21.44	74.2%	$7.44	25.8%	3.2%
2024	$21.49	73.4%	$7.78	26.6%	3.3%
2025	$25.38	68.0%	$11.94	32.0%	3.5%
Change (2020-2025)	+$3.89B (+18.1%)	-16.0 pp	+$7.85B (+192%)	+16.0 pp	+1.4 pp

Indicator	2020	2023	2025	IMF Threshold	Risk Status
Debt-to-GDP Ratio (%)	41.3%	48.6%	49.6%	55%	🟡 Moderate
Debt-to-Revenue Ratio (%)	191%	125%	84%	200%	🟢 Low
Debt Service-to-Revenue (%)	13.9%	18.6%	14.5%	18%	🟡 Moderate
Debt Service-to-Exports (%)	14.2%	19.8%	21.5%	15%	🔴 High
Debt Service-to-GDP (%)	1.58%	3.00%	4.10%	3.5%	🟡 Moderate
External Debt-to-GDP (%)	40.4%	37.7%	42.7%	40%	🟡 Moderate
Reserves-to-Debt Service (Months)	7.2	5.8	5.0	4.0	🟢 Low
Short-term Debt (%)	8.5%	12.3%	15.8%	20%	🟢 Low

🔑 Key Research Findings at a Glance

📋 Contents of This Research Paper

Research Overview & Core Argument

Africa in the Global Financial Architecture

1.1 Key GFA Institutions and Their Role in Africa

International Trade and Investment

2.1 Africa FDI Inflows & External Debt — Integrated Trend (2020–2025)

2.2 Sovereign Credit Ratings & Borrowing Costs

Stability of Currencies & Financial Markets

3.1 African Currency Depreciation vs. USD (2020–2025)

3.2 External Debt Stock & Debt Service Ratios (2023–2025)

Access to Development Finance

4.1 Climate Finance: Africa's Need vs. Actual Flows

4.2 Multilateral Development Finance to Africa

4.3 Africa's Infrastructure Financing Gap by Sector

Ability to Respond to Economic Shocks

5.1 Fiscal Response Capacity: Africa vs. Advanced Economies (COVID-19)

5.2 GFA Crisis Response Mechanisms — Africa (2020–2024)

Tanzania within the Global Financial Architecture

6.1 Tanzania Macroeconomic Indicators — Actual Data (2020–2025)

6.2 Tanzania: FDI and External Debt Integrated Trend (2020–2025)

6.3 Tanzania: Development Finance by Institution (2020–2025)

6.4 Tanzania's Currency Performance vs. East African Peers (2020–2025)

6.5 Tanzania Crisis Response: COVID-19 Impact and GFA Support

GFA Governance: Africa's Representation Deficit

7.1 Africa's Voting Power vs. G7 in Key GFA Institutions

7.2 GFA Reform Agenda: Key Proposals & Current Status (2024–2025)

Policy Recommendations

8.1 For Africa's Collective GFA Engagement

8.2 For Tanzania's National GFA Strategy

Conclusion

🔍 The Global Financial Architecture Is Not a Neutral System

📚 Section 10: Data Sources & References

About the Authors

Dr. Bravious Felix Kahyoza

Amran Bhuzohera

📎 How to Cite This Research

📢 Share This Analysis

🔎 Explore More TICGL Economic Research

Join TICGL as a Researcher

Introduction: A Structural, Not Cyclical, Deficit

Narrow Tax Base

Rigid Recurrent Spending

Debt Servicing Drain

Weak LGA Revenue

Ambitious Development Agenda

Historical Budget Deficit Trend: Tanzania 1991–2030

Revenue Performance: Strong but Structurally Insufficient

The Tax-to-GDP Structural Gap

Recurrent Expenditure Rigidity

The Structural Drivers ofTanzania's Budget Deficit

Rising Debt Servicing Burden

Structural Weakness in LGA Revenue Mobilization

TRA — Central Revenue

185 LGAs Combined — Local Revenue

Root Causes of LGA Revenue Weakness

Narrow Revenue Base

Outdated By-Laws

No Digital Systems

Political Constraints

Staff Capacity Gaps

Structural Imbalance

Expansionary Development Commitments

FY2026/27 Budget Expansion: Sustainability Assessment

The Proposed Expansion: TZS 61.9–61.93 Trillion (+9.6%)

Conclusion & Policy Recommendations

A Structural, Not Cyclical, Deficit

Policy Recommendations

Revenue-Side Reforms

Expenditure-Side Reforms

Local Government Revenue Reforms

Medium-Term Fiscal Planning

Research Authors

Tanzania Investment and Consultant Group Ltd (TICGL)

📋 Research Methodology & Data Sources

📌 Cite This Analysis

Share This Analysis

📌 Suggested Hashtags — Click to copy

Tanzania Budget Deficit Analysis

Executive Summary

The Structural Drivers of
Tanzania's Budget Deficit

Year	IMF Risk Rating	Probability of Debt Distress	Composite Risk Score	Assessment
2020	Moderate	15-20%	3.2 / 10	🟢 Low Risk
2021	Moderate	18-23%	3.8 / 10	🟢 Low Risk
2022	Moderate	22-28%	4.5 / 10	🟡 Moderate Risk
2023	Moderate-High	28-35%	5.3 / 10	🟡 Moderate Risk
2024	Moderate-High	30-38%	5.7 / 10	🟡 Moderate-High Risk
2025	Moderate	25-32%	5.1 / 10	🟡 Moderate Risk

Purpose Category	New Debt (USD Billion)	% of Total New Debt	Expected ROI Timeline	Economic Impact
Infrastructure (Roads, Rail, Ports)	$8.95	52.0%	15-25 years	🟡 Long-term
Budget Support & Deficit Financing	$3.75	21.8%	None	✗ Non-productive
Energy & Power Generation	$1.72	10.0%	10-15 years	✓ Revenue-generating
Social Services (Health, Education)	$1.03	6.0%	20+ years	🟡 Indirect benefits
Agriculture & Rural Development	$0.86	5.0%	5-10 years	✓ Productive
Water & Sanitation	$0.52	3.0%	8-12 years	🟡 Indirect benefits
ICT & Digital Infrastructure	$0.34	2.0%	5-8 years	✓ High potential
Other	$0.04	0.2%	Varies	Mixed
Total New Debt (2020-2025)	$17.21	100.0%	—	—

Metric	2020 Value	2025 Value	Absolute Change	% Growth	Sustainability
National Debt (Best Estimate)	$29.15B	$48.35B	+$19.20B	+65.9%	⚠️ Rapid
GDP (Nominal)	$63.37B	$87.44B	+$24.07B	+38.0%	✓ Moderate
Government Revenue	TZS 16.50T	TZS 57.20T	+TZS 40.7T	+246.7%	✓ Excellent
Tax Revenue (% of GDP)	11.1%	21.2%	+10.1 pp	+91.0%	✓ Strong
Debt Service Payments	$1.00B	$3.12B	+$2.12B	+212.0%	⚠️ Alarming
Exports (Goods & Services)	$7.04B	$10.85B	+$3.81B	+54.1%	✓ Good
Foreign Reserves (Months of Imports)	5.4	5.0	-0.4	-7.4%	✓ Adequate
FDI Inflows	$1.08B	$1.45B	+$0.37B	+34.3%	🟡 Moderate

Country	Debt-to-GDP Ratio (%)	External Debt (USD Billion)	Debt Service / Revenue (%)	5-Year Debt Growth (%)	Risk Level
Burundi	72.8%	$2.45	24.5%	+89.3%	🔴 High Distress
Kenya	68.4%	$42.80	31.2%	+78.5%	🔴 High Risk
Rwanda	73.1%	$5.85	22.8%	+95.2%	🔴 High Risk
South Sudan	45.2%	$1.92	8.5%	+12.4%	🟡 Moderate
Tanzania	49.6%	$37.31	14.5%	+65.9%	🟡 Moderate Risk
Uganda	52.3%	$18.40	19.6%	+71.8%	🟡 Moderate-High
EAC Average	61.5%	—	20.2%	+68.8%	🟡 Moderate-High

Country/Region	Debt-to-GDP Ratio (%)	Debt Service / Exports (%)	Annual Debt Growth (2020-25)	IMF Classification
Ghana	88.7%	42.3%	+15.2%	🔴 In Distress
Zambia	123.4%	38.9%	+8.5%	🔴 In Default
Ethiopia	51.8%	28.4%	+9.8%	🔴 High Risk
Kenya	68.4%	27.8%	+12.6%	🔴 High Risk
Tanzania	49.6%	21.5%	+10.6%	🟡 Moderate Risk
Senegal	71.2%	25.4%	+11.8%	🔴 High Risk
Nigeria	37.3%	18.2%	+7.2%	🟢 Low Risk
Botswana	21.5%	4.8%	+3.1%	🟢 Low Risk
SSA Average (Excl. South Africa)	58.9%	23.4%	+9.8%	🟡 Moderate-High

Component	2020 Value (% of GDP)	2025 Value (% of GDP)	Change (pp)	Contribution to GDP Growth (%)
Private Consumption	68.5%	65.2%	-3.3 pp	38.5%
Government Spending	15.8%	18.4%	+2.6 pp	22.8%
Public Investment	8.2%	10.5%	+2.3 pp	17.2%
Private Investment	18.5%	19.8%	+1.3 pp	15.4%
Net Exports	-11.0%	-13.9%	-2.9 pp	6.1%

Scenario	2026 Debt-to-GDP	2028 Debt-to-GDP	2030 Debt-to-GDP	Probability
Optimistic Scenario 6.5% GDP growth, fiscal consolidation, concessional borrowing only	48.2%	45.8%	43.5%	20%
Baseline/IMF Scenario 5.5-6% GDP growth, gradual fiscal consolidation, mixed borrowing	50.1%	51.2%	50.8%	45%
Pessimistic Scenario 4.5% GDP growth, limited reforms, continued commercial borrowing	52.8%	56.4%	59.2%	25%
Crisis Scenario 3% GDP growth, major TZS depreciation, refinancing difficulties	55.2%	62.8%	68.5%	10%

Risk Factor	Likelihood (1-10)	Impact (1-10)	Overall Risk Score	Mitigation Status
SGR Revenue Underperformance	9	9	9.8	🔴 Critical
TZS Depreciation (>10% annually)	7	9	9.2	🔴 High
Commercial Debt Refinancing Risk	6	8	8.5	🟡 Moderate
Global Interest Rate Spike	5	7	7.8	🟡 Limited
Commodity Price Shock (Gold/Tourism)	6	7	7.5	🟡 Partial
Contingent Liabilities Materialization	4	8	7.2	🟡 Limited
Revenue Mobilization Stalling	5	7	6.8	✓ Good
Political Instability/Governance	3	8	6.2	✓ Strong
Climate Shocks (Drought/Floods)	6	5	5.5	🟡 Emerging
Regional Conflict/Security Issues	4	6	5.0	✓ Stable

Category	Estimated Value (USD Billion)	Materialization Probability	Expected Value (USD Billion)	Status
State-Owned Enterprises (SOE) Guarantees	$4.2 - $6.5	30-40%	$1.5 - $2.6	🟡 Monitoring
Public-Private Partnership (PPP) Obligations	$2.8 - $4.2	20-30%	$0.6 - $1.3	✓ Low risk
Pension Liabilities (Unfunded)	$1.5 - $2.0	50-60%	$0.8 - $1.2	🟡 Emerging
Legal Claims & Arbitration	$0.8 - $1.2	40-50%	$0.3 - $0.6	🟡 Active cases
Off-Budget Infrastructure Commitments	$0.5 - $1.0	60-70%	$0.3 - $0.7	🟡 Probable
Total Contingent Liabilities	$9.8 - $14.9	—	$3.5 - $6.4	—
Potential Debt-to-GDP Impact	+11.2% - 17.0%	—	+4.0% - 7.3%	⚠️ Significant

Reform Area	Key Actions Taken	Implementation Status (%)	Impact on Sustainability	Effectiveness
Revenue Mobilization	Tax digitalization, base broadening, TRA reforms	85%	High (+)	✓ Excellent
Expenditure Control	Budget ceilings, spending reviews, IFMIS	60%	Medium (+)	🟡 Moderate
Debt Management Strategy	Medium-term debt strategy, borrowing limits	55%	Medium (+)	🟡 Improving
SOE Restructuring	Commercialization plans, governance reforms	40%	Low (+)	🟡 Limited
Project Appraisal	Cost-benefit analysis requirements	45%	Medium (+)	🟡 Partial
Domestic Resource Mobilization	Bond market development, retail instruments	50%	Low (+)	🟡 Emerging