Tanzania’s external debt has shown a significant upward trend, reaching 35,039.8 USD Million in February 2025, up from 34,551.4 USD Million in January 2025, according to the Bank of Tanzania. This marks a month-on-month increase of approximately 488.4 USD Million or 1.41%. The external debt has grown steadily, averaging 20,062.78 USD Million from 2011 to 2025, with a record high of 34,936.5 USD Million in February 2025 and a low of 2,469.7 USD Million in December 2011. This reflects a substantial increase over the years, driven by investments in infrastructure, energy, and other development projects.

Tanzania’s External Debt in Context

Tanzania’s external debt is a critical indicator of its economic position within Africa and East Africa. To provide a comprehensive understanding, let’s compare Tanzania’s external debt to other African and East African countries, analyze its debt-to-GDP ratio, and explore the factors contributing to its debt profile.

Comparison with African Countries

The provided data lists external debt for several African countries, with figures converted to USD Million where necessary for comparison. Using the most recent data from the table and supplementing with additional context:

• South Africa: 168,379 USD Million (Dec 2024) – The highest external debt in the dataset, reflecting South Africa’s position as one of Africa’s largest economies.
• Egypt: 155,204 USD Million (Sep 2024) – Another major economy with significant external borrowing, driven by infrastructure and energy projects.
• Angola: 50,260 USD Million (Dec 2023) – High debt due to oil-related investments and reliance on external financing.
• Nigeria: 42,900 USD Million (Sep 2024) – A major oil-producing nation with considerable external debt, though lower than Tanzania’s relative to GDP.
• Tanzania: 34,056 USD Million (Mar 2025) – Ranks among the top tier of African countries in terms of external debt, reflecting its ambitious development agenda.
• Ghana: 28,300 USD Million (Dec 2024) – Lower than Tanzania, but Ghana faces higher debt distress risks due to a higher debt-to-GDP ratio.
• Rwanda: 7,916 USD Million (Dec 2023) – An East African neighbor with significantly lower external debt than Tanzania.
• Kenya: 5,057 KES Billion (approx. 37,173 USD Million at an exchange rate of 1 KES = 0.00735 USD, Dec 2024) – Comparable to Tanzania, but slightly higher, reflecting Kenya’s larger economy.
• Burundi: 1,873,263 BIF Million (approx. 650 USD Million at an exchange rate of 1 BIF = 0.000347 USD, Dec 2024) – Significantly lower, reflecting Burundi’s smaller economy.

Tanzania’s external debt of 34,056 USD Million (Mar 2025) places it among the top 10 African countries for external debt, behind economic giants like South Africa, Egypt, and Nigeria, but ahead of smaller economies like Rwanda and Burundi. This reflects Tanzania’s growing economic ambitions but also its increasing reliance on external financing.

Comparison with East African Community (EAC) Countries

Within East Africa, Tanzania’s external debt is significant but not the highest. Key EAC countries include:

• Kenya: Approximately 37,173 USD Million (Dec 2024) – Slightly higher than Tanzania, driven by large infrastructure projects like the Standard Gauge Railway (SGR).
• Tanzania: 34,056 USD Million (Mar 2025) – A close second, with debt growth tied to infrastructure, energy, and mining investments.
• Rwanda: 7,916 USD Million (Dec 2023) – Much lower, reflecting Rwanda’s smaller economy and more cautious borrowing.
• Uganda: Data not provided, but recent estimates suggest around 20,000 USD Million (2023), lower than Tanzania due to a less diversified economy.
• Burundi: 650 USD Million (Dec 2024) – Minimal debt, constrained by its small economy and political instability.

Tanzania’s external debt is comparable to Kenya’s, positioning it as a major borrower in the EAC. However, its debt-to-GDP ratio and risk profile are more favorable than some peers, as discussed below.

Debt-to-GDP Ratio and Sustainability

Tanzania’s external debt-to-GDP ratio provides insight into its debt sustainability. In 2023, Tanzania’s public debt (including external and domestic) was 46.87% of GDP, with external debt accounting for approximately 70.4% of total public debt (2023 data). Assuming a nominal GDP of 78 USD Billion in 2023 (projected to grow to 105.1 USD Billion in 2022, adjusting for inflation and growth), the external debt of 34,056 USD Million in March 2025 translates to roughly 32-35% of GDP, depending on GDP estimates for 2025.

• Comparison with African Peers:
  • South Africa: External debt at 168,379 USD Million with a GDP of approximately 405 USD Billion (2023) yields a debt-to-GDP ratio of ~41.6%, higher than Tanzania.
  • Egypt: 155,204 USD Million with a GDP of 393 USD Billion (2023) results in a ratio of ~39.5%, also higher.
  • Nigeria: 42,900 USD Million with a GDP of 362 USD Billion (2023) gives a ratio of ~11.8%, significantly lower due to Nigeria’s larger economy.
  • Ghana: 28,300 USD Million with a GDP of 76 USD Billion (2023) results in a ratio of ~37.2%, indicating higher distress risk.
  • Rwanda: 7,916 USD Million with a GDP of 14 USD Billion (2023) yields a ratio of ~56.5%, much higher than Tanzania, indicating greater vulnerability.
• East African Context:
  • Kenya: 37,173 USD Million with a GDP of 112 USD Billion (2023) results in a ratio of ~33.2%, similar to Tanzania.
  • Rwanda: As noted, ~56.5%, significantly higher.
  • Burundi: 650 USD Million with a GDP of 2.6 USD Billion (2023) yields a ratio of ~25%, lower but less relevant due to its small economy.

Tanzania’s external debt-to-GDP ratio of ~32-35% is moderate compared to peers, and its public debt-to-GDP ratio of 46.87% (2023) is below the regional benchmark of 55% for low-income countries, indicating sustainable debt levels. The IMF’s 2024 Debt Sustainability Analysis (DSA) classifies Tanzania’s risk of external debt distress as low, supported by prudent fiscal policies and concessional borrowing.

Composition of Tanzania’s External Debt

As of December 2019, Tanzania’s external debt was USD 22.4 Billion (40% of GDP), with the central government holding 78%, the private sector 21%, and public corporations 0.4%. The debt is primarily owed to:

• Multilateral institutions: 46% (e.g., World Bank, IMF, African Development Bank)
• Commercial sources: 34%
• Export credit: 11%
• Bilateral institutions: 9% (e.g., China, India).

By currency, 68.9% of external debt is denominated in USD, followed by the Euro, which reduces exposure to currency fluctuations but increases repayment burdens when the Tanzanian shilling depreciates (8% depreciation in 2023).

Drivers of External Debt

Tanzania’s external debt growth is driven by:

1. Infrastructure Investments: Large-scale projects like the Standard Gauge Railway (SGR), Dar es Salaam Port expansion, and energy projects (e.g., gas pipeline from Mnazi Bay to Dar es Salaam) require significant borrowing.
2. Economic Diversification: Investments in mining (gold, nickel, graphite), manufacturing, and tourism to reduce reliance on agriculture.
3. COVID-19 Response: Non-concessional borrowing during the pandemic to support the economy, increasing debt levels.
4. Foreign Direct Investment (FDI): FDI rose to USD 922 Million in 2021, with projects like the Kabanga Nickel Project requiring external financing.

Risks and Challenges

• Foreign Exchange Shortages: The Tanzanian shilling’s 8% depreciation in 2023 and 0.5% in 2022 increased debt servicing costs in local currency.
• Election-Related Pressures: The 2025 elections may increase fiscal spending, potentially pausing fiscal consolidation efforts.
• Global Economic Slowdown: Reduced tourism receipts and export demand could strain debt repayment capacity.
• Debt Service Burden: Debt service absorbs ~40% of government expenditures, limiting fiscal space for social spending.

Position in Africa and East Africa

• Africa: Tanzania ranks among the top 10 African countries for external debt, behind South Africa, Egypt, and Nigeria, but its moderate debt-to-GDP ratio and low distress risk make it a relatively stable borrower. Its diversified economy (agriculture, mining, tourism) and stable political environment enhance its attractiveness for FDI, unlike higher-risk countries like Ghana or Zambia.
• East Africa: Tanzania is a close second to Kenya in external debt, with a stronger growth outlook (6% projected GDP growth in 2025 vs. Kenya’s 5%). Its lower debt-to-GDP ratio compared to Rwanda and stable macroeconomic policies position it as a regional economic powerhouse, though Kenya’s larger economy gives it a slight edge.

Conclusion

Tanzania’s external debt of 34,056 USD Million in March 2025 reflects its ambitious development agenda but remains sustainable, with a debt-to-GDP ratio of ~32-35% and low distress risk. Compared to African peers, Tanzania’s debt is moderate, and within East Africa, it competes closely with Kenya while outperforming smaller economies like Rwanda and Burundi. Continued fiscal discipline, concessional borrowing, and economic diversification will be key to maintaining debt sustainability.

This table highlights Tanzania’s external debt of 34,056 USD Million (Mar 2025) as moderate within Africa, comparable to Kenya in East Africa, and sustainable relative to its GDP. Its debt-to-GDP ratio of ~32-35% is lower than peers like Rwanda (56.5%) and Angola (59.1%), positioning Tanzania favorably in terms of debt sustainability.

Notes:

• Tanzania: External debt increased from 34,551.4 USD Million (Jan 2025) to 35,039.8 USD Million (Feb 2025), with 34,056 USD Million reported for Mar 2025. Debt-to-GDP ratio estimated at 32-35% based on projected GDP growth to ~100 USD Billion by 2025.
• Kenya: Converted from 5,057 KES Billion using 1 KES = 0.00735 USD (Dec 2024).
• Burundi: Converted from 1,873,263 BIF Million using 1 BIF = 0.000347 USD (Dec 2024).
• GDP Estimates: Sourced from IMF/World Bank 2023 data, adjusted for inflation/growth where necessary.
• Debt-to-GDP Ratio: Calculated as (External Debt / GDP) * 100. Ratios are approximate due to varying reference dates and GDP projections.

In 2024, global debt reached a staggering USD 250 trillion, equivalent to 237% of global GDP, according to the IMF’s 2024 Global Debt Monitor. Although this marks a slight decline from the previous year, the level remains significantly higher than the pre-pandemic ratio of 229% in 2019. The overall decline in global debt is mainly attributed to a drop in private debt, which fell by 2.8 percentage points to 143% of GDP, amounting to over USD 150 trillion. This includes household debt at 54% of GDP and non-financial corporate debt at 90% of GDP. Meanwhile, public debt rose by 2 percentage points to 94% of GDP, reaching USD 98 trillion, reflecting a return to its upward trajectory after the pandemic. The data highlights diverging debt trends across countries—with reductions in private debt seen in advanced economies and the US, while China and low-income developing countries experienced significant increases in both public and private debt levels.

Global Debt Overview (2024)

• Total Global Debt (Public + Private):
  📊 USD 250 trillion
  📉 237% of global GDP (down from 238% in 2022/2023)
  ⚠️ Still 8 percentage points above pre-pandemic level (229% in 2019)

Private Debt

• Total Private Debt:
  💵 > USD 150 trillion
  📉 143% of GDP (↓ 2.8 percentage points from 2022/2023)
  ✅ Now below 2019 level (pre-COVID)
• Composition:
  • Households: 📉 54% of GDP
  • Non-financial corporates: 📉 90% of GDP
• By Country:
  • 🇺🇸 United States:
    • ↓ 6 percentage points to 150% of GDP
    • Household ↓ 3.4%, Corporate ↓ 2.5%
  • 🇨🇳 China:
    • ↑ 6.5 percentage points to 205% of GDP
    • Corporate ↑ 5%, Household ↑ 2%
  • 🌍 Emerging Markets (excl. China): Stable at 69% of GDP
  • 🌐 Advanced Economies (excl. US):
    • ↓ 6% to 168% of GDP

Public Debt

• Total Public Debt:
  💰 USD 98 trillion
  📈 Increased by 2 percentage points to 94% of GDP
  ↪️ Returned to pre-pandemic rising trend
• By Country:
  • 🇺🇸 US: ↑ to 123% of GDP
  • 🇨🇳 China: ↑ to 84% of GDP
  • 🌍 EMDEs (excluding China): ↑ to 57% of GDP
  • 🌐 Advanced Economies (excl. US): ↓ to 103% of GDP
  • 🌍 Low-Income Developing Countries (LIDCs):
    • ↑ to 50% of GDP (new high)
    • Private debt ↓ to 38%, but still 4% higher than in 2019

What Drove the Decline in Private Debt?

1. Lower Future Growth Expectations
   ➤ Global 5-year growth forecast fell from 2.7% (2022) to 2.2% (2023/2024)
2. Inflation Surprises
   ➤ Helped reduce real debt ratios:
   • Emerging Markets: Surprise inflation fell from 6% → 2.3%
   • Advanced Economies: Fell from 5.5% → 1.5%
3. Eased Economic Uncertainty (except in the US due to elections)

📌 Notable Highlights

• China has the highest debt-to-GDP ratio globally: 289% of GDP
• The US and Advanced Economies led the global debt decline
• Global debt ratio declined by 20 percentage points since 2020, correcting about two-thirds of the pandemic surge

what the global debt data is telling us:

1. The World Is Still Heavily in Debt

• Total global debt is USD 250 trillion, equal to 237% of global GDP.
• Although this is slightly lower than in 2022, it’s still much higher than before the COVID-19 pandemic (229% in 2019).
• This means countries, companies, and households still carry a very heavy debt burden.

2. Private Sector Is Cleaning Up

• The decline in global debt is mainly due to a drop in private debt (households and companies).
• People and firms are borrowing less or paying back loans, especially in the US and Europe.
• In the US, private debt fell a lot — households and companies reduced borrowing.
• But in China, private debt surged. Companies are borrowing more, despite weak economic signals.

3. Governments Are Borrowing More Again

• After stabilizing, public debt rose again in 2023/2024.
• It’s now at 94% of global GDP, close to COVID levels.
• Countries like China and many low-income nations increased public borrowing, which raises concerns about debt sustainability.

4. Why Is Private Debt Falling?

• Low future growth expectations — people and businesses don’t see big growth coming, so they avoid debt.
• Inflation — when prices rise, the value of old debt falls.
• Less uncertainty — the global economy is more stable than during COVID, so people aren’t borrowing as a precaution.

5. Warnings & Opportunities

• Although private debt is falling, public debt is rising, shifting the risk to governments.
• Some countries, like LIDCs, are hitting dangerously high debt levels again.
• Policymakers may need to focus more on public debt management going forward.

In short:

✅ Households and companies are being cautious
⚠️ Governments are borrowing more again
📉 Global debt is slowly improving, but risks remain

Summary global debt figures:

Global Debt Summary (2023/2024)

Debt by Region or Country (2023/2024)