Tanzania's National Debt Hits TZS 132.7 Trillion in June 2026: What's Driving It, Who Owns It, and What It Means
A full statistical breakdown of Tanzania's national debt stock as at end June 2026 — external debt, domestic debt, creditor composition, currency exposure and debt service — based on the Bank of Tanzania's July 2026 Monthly Economic Review.
Published by TICGL Economic Research Desk · Source: Bank of Tanzania Monthly Economic Review, July 2026 · Reading time: ~10 minutes
TZS 132.74 Tn
Total national debt, June 2026
TZS 93.41 Tn
External debt (70.4% of total)
TZS 39.33 Tn
Domestic debt (29.6% of total)
TZS ~2.2 Tn
Debt service paid in June 2026 alone
Executive Summary
Tanzania's national debt stock stood at TZS 132.74 trillion (USD 50,595.8 million) at the end of June 2026, according to the Bank of Tanzania's (BOT) July 2026 Monthly Economic Review. Of this, external debt accounted for 70.4 percent (TZS 93.41 trillion) and domestic debt accounted for 29.6 percent (TZS 39.33 trillion).
External debt rose only marginally month-on-month (up 0.1 percent from May 2026), but continued a steep multi-year climb — from roughly TZS 46.8 trillion in June 2018 to over TZS 93 trillion in June 2026, more than doubling in eight years. Domestic debt has grown even faster in relative terms, tripling from TZS 13.2 trillion to TZS 39.3 trillion over the same period, with the Bank of Tanzania overdraft facility, commercial banks and pension funds as the dominant domestic creditors.
Multilateral institutions remain Tanzania's single largest external creditor group (59.3 percent of external debt), the US Dollar dominates currency exposure (66.2 percent), and Balance of Payments/budget support plus transport & telecommunication infrastructure together absorb over 44 percent of disbursed external debt. In June 2026 alone, the Government paid an estimated TZS 2.2 trillion in combined domestic and external debt service — a reminder of how much of each month's revenue effort goes toward servicing past borrowing rather than new development spending.
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Rising debt is only one piece of the Dira 2050 puzzle. TICGL's flagship analysis examines the structural and policy gaps standing between Tanzania and a USD 1 trillion economy — and why debt-financed growth alone won't close that gap.
All figures converted from BOT's USD-denominated debt tables using the end-June 2026 exchange rate of TZS 2,623.5 per USD, and presented in TZS trillions for clarity.
TZS 132.74 Tn
Total national debt stock (Jun-2026)
TZS 93.41 Tn
External debt stock — 70.4% of total
TZS 39.33 Tn
Domestic debt stock — 29.6% of total
+0.1%
External debt growth, m-o-m (May→Jun 2026)
Table 1: Tanzania National Debt Stock Snapshot, June 2026
Item
USD Million
TZS Trillion (approx.)
Share of National Debt
Total national debt stock
50,595.8
132.74
100.0%
— External debt (public + private)
35,606.1
93.41
70.4%
of which: Central government
29,606.0
77.68
83.1% of external
of which: Private sector
6,000.1
15.74
16.9% of external
— Domestic debt (excl. liquidity papers)
~14,989.7
39.33
29.6%
Total (check)
50,595.8
132.74
100.0%
Source: Bank of Tanzania, Monthly Economic Review, July 2026 (Tables 2.7.1, 2.7.5, A10). End-of-period exchange rate: TZS 2,623.5/USD.
Chart 1: Composition of Tanzania's National Debt, June 2026
External vs domestic share of the TZS 132.74 trillion debt stock
Chart unavailable — see Table 1 above for the External (70.4%) vs Domestic (29.6%) debt split.
2. Debt Trend: 2018 – 2026
Tanzania's total national debt has more than doubled over the past eight fiscal years, rising from an estimated TZS 60.0 trillion in June 2018 to TZS 132.74 trillion in June 2026. Domestic debt has grown the fastest in percentage terms — nearly tripling — while external debt has roughly doubled, reflecting continued reliance on both concessional multilateral financing and an expanding domestic securities market.
Chart 2: Tanzania's External, Domestic and Total Debt, June 2018 – June 2026 (TZS Trillion)
Long-run debt accumulation trend, as at end of June each year
Chart unavailable — see Table 2 below for the full year-by-year series.
Note: External debt converted to TZS using the respective end-of-period exchange rate for each year; domestic debt as reported directly by the Ministry of Finance in TZS.
Table 2: Tanzania National Debt Stock by Year, June 2018 – June 2026 (TZS Trillion)
As at June
External Debt (TZS Tn)
Domestic Debt (TZS Tn)
Total Debt (TZS Tn)
2018
46.77
13.23
60.00
2019
50.15
14.86
65.01
2020
52.76
15.59
68.35
2021
58.63
18.93
77.56
2022
64.26
24.04
88.30
2023
75.67
28.93
104.60
2024
75.87
31.94
107.81
2025
85.18
35.50
120.68
2026 (Jun)
93.41
39.33
132.74
Source: BOT Monthly Economic Review, July 2026 (Table A1, Table 2.7.1, Chart 2.7.1). External debt converted using end-of-period exchange rates.
Monthly Movement of Total National Debt (June 2025 – June 2026)
Zooming into the most recent 13 months shows a less linear picture: total debt fluctuated between roughly TZS 123.6 trillion and TZS 134.3 trillion, driven as much by shilling depreciation and cross-currency valuation effects as by new borrowing.
Chart 3: Total National Debt Stock, Monthly, June 2025 – June 2026 (TZS Trillion)
Reflects both new borrowing/repayment and exchange rate valuation effects
Chart unavailable — see Table 3 below for the monthly series.
Table 3: Total National Debt Stock by Month (TZS Trillion)
Month
Total Debt (USD Mn)
Exchange Rate (TZS/USD)
Total Debt (TZS Tn)
Jun-2025
48,396.3
2,604.6
126.05
Jul-2025
49,066.3
2,545.8
124.91
Aug-2025
50,159.0
2,463.3
123.56
Sep-2025
51,050.1
2,442.8
124.71
Oct-2025
51,653.8
2,451.6
126.63
Nov-2025
50,868.2
2,436.8
123.96
Dec-2025
51,013.8
2,447.5
124.86
Jan-2026
51,221.0
2,518.1
128.98
Feb-2026
51,078.3
2,542.5
129.87
Mar-2026
50,803.5
2,577.4
130.94
Apr-2026
51,623.7
2,602.0
134.32
May-2026
50,599.0
2,609.2
132.02
Jun-2026
50,595.8
2,623.5
132.74
Source: BOT Monthly Economic Review, July 2026 (Table A10).
3. External Debt: Creditors, Currency & Use of Funds
External debt (public and private) stood at TZS 93.41 trillion (USD 35,606.1 million) at end June 2026 — a marginal 0.1 percent increase from May 2026. Central government accounted for 83.1 percent of this (TZS 77.68 trillion), while the private sector accounted for 16.9 percent (TZS 15.74 trillion). During the month, external loans disbursed totalled USD 379.8 million (~TZS 1.0 trillion), mainly to the central government, while external debt service payments totalled USD 249.2 million (~TZS 0.65 trillion), of which USD 184.9 million was principal.
3.1 External Debt by Creditor Category
Chart 4: External Debt by Creditor, June 2026
Share of TZS 93.41 trillion external debt stock
Chart unavailable — see Table 4.
Table 4: External Debt Stock by Creditor, June 2026
Creditor
TZS Trillion
Share
Multilateral (World Bank, AfDB, IMF, etc.)
55.42
59.3%
Commercial lenders
32.17
34.4%
Bilateral (government-to-government)
4.01
4.3%
Export credit agencies
1.82
1.9%
Total external debt
93.41
100.0%
Source: BOT Monthly Economic Review, July 2026 (Table 2.7.2).
3.2 External Debt by Currency
Chart 5: External Debt by Currency, June 2026
US Dollar exposure dominates — a key exchange-rate risk factor
Chart unavailable — see Table 5.
Table 5: Disbursed External Debt by Currency Composition
Currency
Jun-25
May-26
Jun-26
United States Dollar
66.0%
65.9%
66.2%
Euro
17.7%
17.5%
17.4%
Chinese Yuan
6.4%
6.6%
6.7%
Other currencies
9.9%
9.9%
9.8%
Source: BOT Monthly Economic Review, July 2026 (Table 2.7.4).
Currency risk note: With 66.2 percent of external debt denominated in US Dollars and the shilling having depreciated 0.08 percent year-on-year to June 2026, continued TZS softening directly raises the shilling-equivalent cost of debt service — a key reason BOT actively manages reserves and intervenes in the interbank foreign exchange market.
3.3 External Debt by Use of Funds
Chart 6: Disbursed Outstanding External Debt by Use of Funds, June 2026
Where borrowed money has actually gone
Chart unavailable — see Table 6.
Table 6: Disbursed Outstanding External Debt by Activity/Use of Funds
Activity
Jun-25
May-26
Jun-26
Balance of Payments & budget support
21.9%
22.3%
22.1%
Transport & telecommunication
21.1%
22.1%
22.0%
Social welfare & education
19.9%
19.5%
19.5%
Energy & mining
13.0%
12.4%
12.8%
Agriculture
5.3%
5.4%
5.3%
Real estate & construction
4.4%
5.1%
5.1%
Finance & insurance
4.1%
4.2%
4.2%
Industries
3.5%
2.8%
2.8%
Tourism
1.7%
1.7%
1.7%
Other
5.1%
4.6%
4.6%
Source: BOT Monthly Economic Review, July 2026 (Table 2.7.3).
4. Domestic Debt: Instruments & Creditors
Government's domestic debt stock rose marginally to TZS 39.33 trillion at end June 2026, from TZS 39.26 trillion in May 2026. In June alone, the Government mobilised TZS 468 billion from the domestic market — TZS 273.3 billion in Treasury bonds and TZS 194.7 billion in Treasury bills — while domestic debt service payments totalled TZS 1.55 trillion (TZS 1.26 trillion principal, TZS 0.29 trillion interest).
4.1 Domestic Debt by Borrowing Instrument
Chart 7: Domestic Debt by Instrument, June 2026
Government bonds dominate the domestic debt portfolio
Chart unavailable — see Table 7.
Table 7: Domestic Debt by Borrowing Instrument, June 2026
Instrument
TZS Trillion
Share
Government bonds
31.42
79.9%
Overdraft (non-securitized)
6.01
15.3%
Treasury bills
1.76
4.5%
Government stocks
0.14
0.3%
Total domestic debt
39.33
100.0%
Source: BOT Monthly Economic Review, July 2026 (Table 2.7.5).
4.2 Domestic Debt by Creditor Category
Chart 8: Domestic Debt by Creditor, June 2026
Commercial banks and pension funds are the Government's main domestic financiers
Chart unavailable — see Table 8.
Table 8: Domestic Debt by Creditor Category, June 2026
Creditor
TZS Trillion
Share
Commercial banks
11.32
28.8%
Pension funds
10.40
26.4%
Bank of Tanzania (incl. overdraft)
7.20
18.3%
Others (institutions, individuals, non-residents)
7.55
19.2%
Insurance companies
2.02
5.1%
BOT's special funds
0.84
2.1%
Total domestic debt
39.33
100.0%
Source: BOT Monthly Economic Review, July 2026 (Table 2.7.6).
4.3 Domestic Debt Growth Trajectory, 2018–2026
Chart 9: Government Domestic Debt Stock, June 2018 – June 2026 (TZS Trillion)
Chart unavailable — see Table 2 above for the domestic debt column.
5. Debt Service & New Borrowing (June 2026 Snapshot)
Table 9: Debt Service and New Borrowing Flows, June 2026
Flow
External (TZS Tn)
Domestic (TZS Tn)
Combined (TZS Tn)
New borrowing / disbursements
~1.00
0.468
~1.47
Principal repayments
~0.49
1.26
~1.75
Interest payments
~0.17
0.29
~0.46
Total debt service (principal + interest)
~0.65
1.55
~2.20
Source: BOT Monthly Economic Review, July 2026 (narrative figures, Section 2.7). External figures converted from USD at TZS 2,623.5/USD.
In effect, for every shilling of new external borrowing disbursed in June 2026, the Government paid out roughly the same amount servicing existing external debt — while domestic debt service alone (TZS 1.55 trillion) was more than three times the value of new domestic securities issued (TZS 468 billion) that month. This "rolling debt" dynamic is a key reason the domestic debt stock has grown steadily even without large net new financing every month.
6. Macroeconomic Context Behind the Debt Numbers
Debt does not move in isolation — it sits alongside growth, inflation and monetary policy. Key context from BOT's July 2026 review:
Growth: Real GDP grew 6.0 percent in Q1 2026 (up from 4.3 percent a year earlier), with the Bank projecting 5.9 percent growth in Q2 2026 — growth that partly reflects continued public investment financed by borrowing.
Inflation: Headline inflation eased slightly to 4.0 percent in June 2026 (from 4.2 percent in May), remaining within the national 3–5 percent target band, though core inflation rose to 3.7 percent — its highest contribution to headline inflation in two years.
Monetary policy tightening: Following signs of broadening inflationary pressure, the Monetary Policy Committee raised the Central Bank Rate (CBR) from 5.75 percent to 6.25 percent for Q3 2026 (effective 2 July 2026) — a move that also raises the cost of new domestic government borrowing going forward.
Reserves buffer: Gross official foreign exchange reserves stood at USD 5,673.5 million, covering 4.4 months of projected imports — above the 4-month national benchmark, providing some cushion for external debt service.
Exchange rate: The shilling traded at an average of TZS 2,633.73/USD in June 2026, depreciating 0.08 percent year-on-year — modest, but a continued gradual drag on the TZS-equivalent cost of Tanzania's dollar-heavy external debt.
Chart 10: Central Bank Rate vs Headline Inflation, Recent Trend
Monetary tightening raises the cost of future domestic borrowing
Chart unavailable — CBR was held at 5.75% through Q2 2026, then raised to 6.25% for Q3 2026 (effective 2 July 2026), while headline inflation moved from 3.3% (Jun-25) to 4.0% (Jun-26).
7. Risks & Outlook
Currency concentration risk: Two-thirds of external debt is US-Dollar denominated. Any renewed shilling depreciation — plausible given continued global energy price volatility from the Middle East conflict — directly increases the shilling cost of debt service.
Rising interest burden domestically: With the CBR raised to 6.25 percent for Q3 2026, new Treasury bond and bill issuances are likely to carry higher coupons, raising the Government's future domestic interest bill on top of the TZS 39.33 trillion already outstanding.
Reserve buffer intact: At 4.4 months of import cover, reserves remain above the national and regional benchmarks, providing a cushion against short-term external shocks to debt service capacity.
Multilateral concentration cuts both ways: With 59.3 percent of external debt held by multilateral institutions (typically concessional, longer-tenor financing), Tanzania's external debt profile is comparatively lower-risk than one dominated by short-term commercial borrowing — though commercial debt (34.4 percent) is still substantial and growing.
Muhtasari wa uchambuzi wa deni la taifa la Tanzania, kutoka Taarifa ya Kila Mwezi ya Uchumi ya BOT, Julai 2026
Deni la taifa: Hadi kufikia Juni 2026, deni la taifa la Tanzania lilifikia Shilingi trilioni 132.74 (dola za Marekani milioni 50,595.8). Kati ya hizo, asilimia 70.4 ni deni la nje (Shilingi trilioni 93.41), na asilimia 29.6 ni deni la ndani (Shilingi trilioni 39.33).
Deni la nje: Deni la nje liliongezeka kwa asilimia 0.1 tu kutoka Mei hadi Juni 2026. Serikali kuu inamiliki asilimia 83.1 ya deni hilo, huku sekta binafsi ikimiliki asilimia 16.9. Wakopeshaji wakubwa ni taasisi za kimataifa (multilateral) kwa asilimia 59.3, wakifuatiwa na wakopeshaji wa kibiashara kwa asilimia 34.4.
Sarafu: Dola ya Marekani inatawala mfumo wa deni la nje kwa asilimia 66.2, ikifuatiwa na Euro (asilimia 17.4) na Yuan ya China (asilimia 6.7) — hali inayoongeza hatari endapo thamani ya shilingi itashuka zaidi.
Deni la ndani: Deni la ndani limefikia Shilingi trilioni 39.33, likiongozwa na hatifungani za Serikali (asilimia 79.9). Wadai wakuu wa ndani ni benki za biashara (asilimia 28.8), mifuko ya pensheni (asilimia 26.4), na Benki Kuu ya Tanzania kupitia akaunti ya overdraft (asilimia 18.3).
Malipo ya deni: Katika mwezi wa Juni 2026 pekee, Serikali ililipa jumla ya takriban Shilingi trilioni 2.2 kama malipo ya deni la ndani na nje — kiasi kikubwa zaidi ya thamani ya mikopo mipya iliyochukuliwa mwezi huo huo.
Sera ya fedha: Kutokana na dalili za mfumuko wa bei kuenea (core inflation kupanda hadi asilimia 3.7), Benki Kuu iliongeza Riba ya Benki Kuu (CBR) kutoka asilimia 5.75 hadi asilimia 6.25 kwa robo ya tatu ya 2026 — hatua itakayoongeza gharama za mikopo mipya ya ndani.
Hitimisho: Ingawa akiba ya fedha za kigeni (miezi 4.4 ya uagizaji bidhaa) inatoa kinga fulani, ukuaji endelevu wa deni — hasa deni la ndani — unahitaji tathmini makini ya uwiano kati ya uwekezaji wa umma na uwezo wa kulipa deni kwa muda mrefu.
Frequently Asked Questions
What is Tanzania's total national debt as of June 2026?
Tanzania's national debt stock stood at TZS 132.74 trillion (USD 50,595.8 million) at the end of June 2026 — 70.4 percent external and 29.6 percent domestic.
How much of Tanzania's debt is external versus domestic?
External debt was TZS 93.41 trillion (USD 35,606.1 million), while domestic debt was TZS 39.33 trillion, as at end June 2026.
Who are Tanzania's largest external creditors?
Multilateral institutions hold 59.3 percent of external debt (about TZS 55.42 trillion), followed by commercial lenders at 34.4 percent, bilateral creditors at 4.3 percent, and export credit agencies at 1.9 percent.
Which currency dominates Tanzania's external debt?
The US Dollar accounts for 66.2 percent of external debt, followed by the Euro (17.4 percent) and the Chinese Yuan (6.7 percent).
Who holds Tanzania's domestic debt?
Commercial banks hold 28.8 percent, pension funds 26.4 percent, the Bank of Tanzania (mainly via the overdraft facility) 18.3 percent, other holders 19.2 percent, and insurance companies 5.1 percent.
How much did the Government spend on debt service in June 2026?
Roughly TZS 2.2 trillion combined — about TZS 1.55 trillion on domestic debt and about TZS 0.65 trillion on external debt.
Primary source: Bank of Tanzania, "Monthly Economic Review," July 2026. Tables 2.7.1–2.7.6, A1, A10, Chart 2.7.1, and related narrative sections on Government Budgetary Operations, Monetary Policy and External Sector Performance. USD figures converted to TZS using BOT's reported end-of-period exchange rates for each respective date. This analysis is produced by TICGL/TERI for informational and research purposes and does not constitute investment advice.
Tanzania Economic Update — July 2026: GDP, Inflation, Interest Rates & Trade in Full
A complete statistical review of Tanzania's economy — growth, inflation, monetary policy, interest rates, financial markets, the government budget, external trade and Zanzibar's economy — based on the Bank of Tanzania's July 2026 Monthly Economic Review.
Published by TICGL Economic Research Desk · Source: Bank of Tanzania Monthly Economic Review, July 2026 · Reading time: ~14 minutes
6.0%
Real GDP growth, Q1 2026
4.0%
Headline inflation, June 2026
6.25%
Central Bank Rate, Q3 2026
USD 2,303.9M
Current account deficit, FY to Jun-26
Executive Summary
Tanzania's economy maintained strong momentum through mid-2026, even as global conditions stayed volatile. Real GDP grew 6.0 percent in Q1 2026, up sharply from 4.3 percent a year earlier, driven by agriculture, financial and insurance services, and transport and storage. The Bank of Tanzania (BOT) projects 5.9 percent growth in Q2 2026, supported by expanding private sector credit, reliable power supply, strong mineral production and continued infrastructure investment.
Headline inflation eased marginally to 4.0 percent in June 2026 from 4.2 percent in May, staying within the national 3–5 percent target band — but core inflation climbed to 3.7 percent, its highest contribution to headline inflation in two years, prompting the Monetary Policy Committee to raise the Central Bank Rate from 5.75 percent to 6.25 percent for Q3 2026. Private sector credit growth accelerated to 28.1 percent year-on-year, the fastest pace in years, while the current account deficit widened to USD 2,303.9 million as import growth outpaced exports. Foreign reserves remained adequate at 4.4 months of import cover. In Zanzibar, inflation rose to 6.0 percent on food and transport costs, even as tourism-driven export earnings grew strongly.
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What's Next for Tanzania's Economy? The Policy Gaps Keeping USD 1 Trillion Out of Reach by 2050
Strong quarterly growth is encouraging, but TICGL's flagship analysis asks the harder question: are the structural and policy conditions in place for Tanzania to sustain this trajectory all the way to a USD 1 trillion economy by 2050?
The global economy closed the first half of 2026 balancing two opposing forces: an energy-price shock from the Middle East conflict, and rapid AI-driven investment. The IMF's July 2026 World Economic Outlook Update projects global growth of 3.0 percent in 2026, strengthening to 3.4 percent in 2027 — broadly unchanged from the April 2026 forecast. The OECD's July 2026 Outlook is more cautious, projecting 2.8 percent in 2026, rising to 3.1 percent in 2027. Sub-Saharan Africa growth is projected to moderate to 4.3 percent in 2026 before recovering to 4.4 percent in 2027.
Global commodity prices corrected sharply in June 2026 as risk premiums eased following a ceasefire near the Strait of Hormuz. Crude oil (average of Brent, Dubai, WTI) fell to USD 81.70/barrel from USD 100.43 in May; Brent fell 20.6 percent to USD 85.40/barrel. Gold averaged USD 4,228/troy ounce, down from USD 4,587.21, as safe-haven demand eased. Despite the correction, energy prices remained about 25 percent above pre-conflict levels.
Chart 1: Global Commodity Price Index Change, June 2026 (m-o-m)
Sharp correction across energy, fertilizers and precious metals
Source: World Bank Commodity Price (Pink Sheet), via BOT Monthly Economic Review, July 2026 (Table 1.1).
Monetary policy abroad: In June 2026, the European Central Bank and Bank of Japan each raised policy rates by 25 basis points (ECB deposit rate to 2.25%, BoJ to 1.00%), while the US Federal Reserve and Bank of England held rates at 3.50–3.75% and 3.75% respectively, both signalling their next move was more likely a hike than a cut. The IMF revised its 2026 global headline inflation forecast upward to 4.7 percent (from 4.1% in 2025), implying disinflation momentum since 2024 has stalled.
2. Domestic Output & GDP Growth
6.0%
Real GDP growth, Q1 2026 (vs 4.3% Q1 2025)
5.9%
BOT projected growth, Q2 2026
Agriculture
Leading growth driver, alongside finance & transport
2027 AFCON
Infrastructure prep supporting near-term activity
Chart 2: Tanzania Quarterly Real GDP Growth, 2022 – 2026 (at 2019 prices)
Percent, year-on-year
Chart unavailable — see Table 2 below.
Table 2: Quarterly Real GDP Growth, 2022–2026 (%)
Year
Q1
Q2
Q3
Q4
2022
2.5
4.9
6.6
3.9
2023
4.0
3.4
6.2
7.2
2024
7.5
6.8
4.6
3.9
2025
4.3
7.5
6.3
5.5
2026
6.0
5.9 (proj.)
—
—
Source: National Bureau of Statistics and Bank of Tanzania computations (Chart 2.1a). Q2 2026 is BOT's projection based on high-frequency indicators.
Growth in Q1 2026 was driven primarily by agriculture, financial and insurance services, and transport and storage activities. BOT expects Q2 2026 momentum to hold up on the back of continued private sector credit expansion, reliable power supply, strong mineral production, sustained tourism resilience, ongoing strategic infrastructure investment, and preparations for the 2027 Africa Cup of Nations.
3. Inflation
4.0%
Headline inflation, June 2026 (May: 4.2%)
3.7%
Core inflation, June 2026 (highest in 2 years)
4.1%
Food inflation, June 2026 (May: 5.6%)
6.3%
Energy, fuel & utilities inflation, June 2026
Headline inflation remained within Tanzania's national 3–5 percent target range and regional (SADC/EAC) convergence benchmarks throughout the period. The easing from May to June 2026 was mainly due to moderating food prices on the back of the ongoing harvest, which partly offset a continued rise in core inflation.
Chart 3: Headline, Core and Energy Inflation, June 2025 – June 2026
Twelve-month percentage change
Chart unavailable — see Table 3 below.
Table 3: Headline, Core and Energy/Fuel/Utilities Inflation, Monthly (%)
Month
Headline
Core
Energy, Fuel & Utilities
Jun-2025
3.3
1.9
2.1
Jul-2025
3.3
1.9
1.0
Aug-2025
3.4
2.0
2.6
Sep-2025
3.4
2.2
3.7
Oct-2025
3.5
2.1
4.0
Nov-2025
3.4
2.3
3.8
Dec-2025
3.6
2.3
3.8
Jan-2026
3.3
2.2
5.2
Feb-2026
3.2
2.1
2.8
Mar-2026
3.2
2.2
2.1
Apr-2026
4.0
3.1
5.3
May-2026
4.2
3.4
5.0
Jun-2026
4.0
3.7
6.3
Source: National Bureau of Statistics and Bank of Tanzania computations (Tables A9(i) and A9(ii)).
Food security note: Food stocks held by the National Food Reserve Agency stood at 480,219 tonnes in June 2026, after releasing 16,812.3 tonnes of maize and paddy to traders — supporting the moderation in food inflation to 4.1 percent from 7.3 percent a year earlier.
4. Monetary Policy & Money Supply
In June 2026, BOT continued implementing the MPC's April 2026 decisions, holding the CBR at 5.75 percent and narrowing the interest rate corridor to ±150 basis points (4.25–7.25%) to strengthen policy transmission. The 7-day interbank cash market rate averaged 5.98 percent, close to the CBR, reflecting effective liquidity management. However, with core inflation rising from 2.2 percent in March to 3.7 percent in June 2026 — a sign of broadening second-round effects from the global supply shock — the MPC raised the CBR to 6.25 percent for Q3 2026 at its 2 July 2026 meeting.
Chart 4: Extended Broad Money (M3) and Private Sector Credit Stock, June 2025 – June 2026
Source: Bank of Tanzania and banks (Table A3). M3 growth reached 25.5% y-o-y in June 2026 (25.2% in May); private sector credit growth accelerated to 28.1% y-o-y (23.2% in May).
Chart 5: Annual Credit Growth by Economic Activity, June 2026
Trade posted the strongest annual credit growth, followed by transport & agriculture
Chart unavailable — see Table 5 below.
Table 5: Annual Growth of Credit to Select Economic Activities (%)
Sector
Jun-25
Dec-25
Jun-26
Trade
21.3
49.7
59.5
Transport and communication
25.7
29.4
46.4
Agriculture
30.2
28.9
39.9
Personal
13.7
17.7
34.4
Building and construction
25.7
25.6
30.1
Mining and quarrying
20.8
91.1
21.8
Hotels and restaurants
22.5
2.5
8.3
Manufacturing
2.5
-8.2
0.9
Source: Banks and Bank of Tanzania (Table 2.3.2). Personal loans (largely supporting MSMEs) continue to hold the largest overall share of the credit portfolio, followed by trade and agriculture.
5. Interest Rates & Financial Markets
Banks' interest rates stayed relatively stable in June 2026. The overall lending rate eased to 15.20 percent from 15.32 percent in May, while the overall time deposit rate rose to 8.60 percent from 8.43 percent. The spread between one-year lending and deposit rates widened to 5.66 percentage points from 5.22 points.
Chart 6: Overall Lending Rate vs Overall Time Deposit Rate, June 2025 – June 2026
Percent per annum
Chart unavailable — see Table 6 below.
Table 6: Overall Lending and Time Deposit Rates, Monthly (%)
Month
Overall Lending Rate
Overall Time Deposit Rate
Jun-2025
15.23
8.74
Jul-2025
15.16
8.83
Aug-2025
15.07
8.61
Sep-2025
15.18
8.50
Oct-2025
15.19
8.36
Nov-2025
15.27
8.54
Dec-2025
15.24
8.36
Jan-2026
15.10
8.33
Feb-2026
15.11
8.32
Mar-2026
15.11
8.33
Apr-2026
15.33
8.54
May-2026
15.32
8.43
Jun-2026
15.20
8.60
Source: Banks and Bank of Tanzania computations (Table A4).
Chart 7: Treasury Bond Yield Curve, June 2026
Yield to maturity by tenor
Chart unavailable — see Table 7.
Table 7: Treasury Securities Auction Results, June 2026
Instrument
Detail
T-bill tender size
TZS 552.1 billion
T-bill bids received
TZS 1,295.9 billion
T-bill amount accepted
TZS 597.1 billion
Overall T-bill weighted avg. yield
4.83% (from 4.74%)
T-bond tender size (10 & 25-yr)
TZS 387.6 billion
T-bond bids received
TZS 1,539.6 billion
T-bond amount accepted
TZS 269.8 billion
10-year yield
10.39% (from 9.40%)
25-year yield
11.89% (from 11.99%)
Source: Bank of Tanzania (Section 2.5, Table A4). Both auctions were oversubscribed, reflecting strong investor appetite for government securities.
Money and forex markets: Interbank cash market turnover rose to TZS 2,508.7 billion in June 2026 (from TZS 1,732.7 billion in May), with the overall interbank rate easing to 6.0 percent. In the interbank foreign exchange market, turnover rose to USD 193.3 million (from USD 119.3 million), with BOT making a net sale of USD 28.5 million to smooth volatility. The shilling averaged TZS 2,633.73/USD in June 2026, depreciating just 0.08 percent year-on-year.
6. Government Budgetary Operations (Mainland)
Latest available actuals: May 2026 (cheques issued basis), against monthly targets under the 2025/26 budget.
Chart 8: Central Government Revenue vs Expenditure, May 2026
Actual vs monthly target, TZS Trillion
Chart unavailable — see Table 8 below.
Table 8: Central Government Budgetary Operations, May 2026 (TZS Trillion)
Item
Target
Actual
Performance
Total government revenue
3.242
3.259
100.5% of target
Central government revenue
3.110
3.152
101.4% of target
Tax revenue
2.615
2.750
105.2% of target
of which: Income tax
0.719
0.955
132.9% of target
of which: Taxes on imports
0.964
1.123
above target
Non-tax revenue
0.495
0.402
below target
Total expenditure
4.653
4.018
below target
Recurrent expenditure
—
2.881
—
Development expenditure
—
1.138
—
Overall balance (deficit)
-1.334
-0.418
narrower than targeted
Source: Ministry of Finance and Bank of Tanzania computations (Table A2). Figures for 2026 are provisional.
Tax revenue performance was strong, exceeding target by 5.2 percent, driven mainly by income tax collections which beat target by 32.9 percent — reflecting improved tax administration and compliance. Non-tax revenue underperformed its target. On expenditure, the Government kept spending below target, financing the resulting narrower deficit through a mix of domestic borrowing (TZS 0.376 trillion) and foreign financing (TZS 0.042 trillion).
7. External Sector Performance
USD 19,923.6M
Exports of goods & services, FY to Jun-26 (+17.2%)
USD 20,815.7M
Imports of goods & services, FY to Jun-26 (+18.1%)
USD 2,303.9M
Current account deficit, FY to Jun-26
4.4 months
Import cover from reserves (benchmark: 4 months)
Chart 9: Exports vs Imports of Goods & Services, Year Ending June (USD Million)
Chart unavailable — see Table 9 below.
Table 9: External Trade & Current Account, Year Ending June (USD Million)
Year Ending June
Exports (Goods & Services)
Imports (Goods & Services)
Current Account Balance
2024
14,410.9
16,144.9
-2,823.1
2025
17,001.3
17,629.8
-2,153.4
2026 (provisional)
19,923.6
20,815.7
-2,303.9
Source: Tanzania Revenue Authority, banks and Bank of Tanzania computations (Table 2.8.1).
Export growth was led by gold (the leading export, benefiting from elevated international prices), manufactured goods (iron and steel, glassware, textiles), and traditional crops (tobacco, cashew nuts, coffee). Import growth was driven by industrial supplies, refined petroleum products, machinery and capital goods — reflecting strong domestic demand and continued efforts to expand productive capacity.
Table 10: Gross Official Reserves, Year-End (USD Million)
Year
Gross Reserves
Months of Import Cover
2018
5,044.6
4.9
2019
5,567.6
6.4
2020
4,767.7
5.6
2021
6,386.0
6.6
2022
5,177.2
4.7
2023
5,450.1
4.5
2024
5,546.9
4.5
2025
6,329.0
4.9
2026 (Jun)
5,673.5
4.4
Source: Bank of Tanzania (Table A1, Chart 2.8.1). Reserves supported by sustained gold export earnings and the domestic gold purchase programme.
8. Zanzibar's Economy
6.0%
Zanzibar headline inflation, June 2026
10.5%
Food inflation, June 2026
USD 1,023.2M
Current account surplus, FY to Jun-26 (+29.1%)
949,278
Tourist arrivals, FY to Jun-26 (+18.9%)
Chart 11: Zanzibar Inflation, June 2025 vs June 2026
Chart unavailable — see Table 11.
Table 11: Zanzibar Inflation, Annual Change (%)
Measure
Jun-25
May-26
Jun-26
Headline inflation
4.1
5.5
6.0
Food inflation
4.4
9.9
10.5
Non-food inflation
3.9
2.1
2.5
Source: Office of the Chief Government Statistician (Table 3.1.1).
Table 12: Zanzibar Government Budget, June 2026 (TZS Billion)
Item
Amount
Domestic revenue and grants
204.4 (77.5% of target)
Tax collections
160.1 (72.9% of target)
Non-tax revenue
17.0 (78.2% of target)
Total government expenditure
423.6
of which: Development expenditure
314.9
Overall fiscal deficit (financed by domestic borrowing)
219.2
Source: Ministry of Finance and Planning, Zanzibar (Section 3.2).
Zanzibar's external position strengthened notably, with the current account surplus growing 29.1 percent to USD 1,023.2 million, mainly on higher service receipts from tourism-related activities. Exports of goods and services grew 26.7 percent to USD 1,796.6 million, aided by an 18.9 percent rise in tourist arrivals to 949,278.
9. Outlook
Growth momentum intact: With BOT projecting 5.9 percent growth for Q2 2026 and strong credit expansion feeding private investment, Tanzania's near-term growth outlook remains solid — provided global energy prices don't spike again.
Inflation vigilance required: Core inflation's rise to 3.7 percent suggests second-round effects from the Middle East-driven supply shock are broadening. The CBR hike to 6.25 percent signals BOT is willing to act pre-emptively, which could gradually raise borrowing costs across the economy.
Widening trade gap: Imports are growing faster than exports (18.1% vs 17.2%), keeping the current account in deficit. Continued reliance on gold as the dominant export earner leaves the external position exposed to global gold price swings.
Muhtasari wa Taarifa ya Uchumi ya Tanzania, kutoka Taarifa ya Kila Mwezi ya BOT, Julai 2026
Ukuaji wa Uchumi: Pato la Taifa (GDP) liliongezeka kwa asilimia 6.0 katika robo ya kwanza ya 2026, kutoka asilimia 4.3 mwaka jana, likichagizwa na kilimo, huduma za fedha na bima, pamoja na usafirishaji na uhifadhi. BOT inatarajia ukuaji wa asilimia 5.9 katika robo ya pili ya 2026.
Mfumuko wa bei: Mfumuko wa bei ulipungua kidogo hadi asilimia 4.0 mwezi Juni 2026 kutoka asilimia 4.2 mwezi Mei, ukibaki ndani ya wigo wa lengo la taifa la asilimia 3–5. Hata hivyo, "core inflation" iliongezeka hadi asilimia 3.7 — kiwango cha juu zaidi katika miaka miwili.
Sera ya fedha: Kutokana na dalili za mfumuko wa bei kuenea, Benki Kuu iliongeza Riba ya Benki Kuu (CBR) kutoka asilimia 5.75 hadi asilimia 6.25 kwa robo ya tatu ya 2026, kuanzia tarehe 2 Julai 2026.
Mikopo na fedha: Ukuaji wa mikopo kwa sekta binafsi uliongezeka hadi asilimia 28.1 — kasi ya juu zaidi katika miaka ya hivi karibuni — ukichagizwa na biashara, usafirishaji, na kilimo.
Sekta ya nje: Nakisi ya urari wa malipo (current account deficit) iliongezeka hadi dola za Marekani milioni 2,303.9, kwani uagizaji wa bidhaa ulikua kwa kasi zaidi (asilimia 18.1) kuliko usafirishaji (asilimia 17.2). Akiba ya fedha za kigeni ilikuwa dola milioni 5,673.5, sawa na miezi 4.4 ya uagizaji bidhaa.
Zanzibar: Mfumuko wa bei Zanzibar uliongezeka hadi asilimia 6.0 mwezi Juni 2026, ukichagizwa na bei za vyakula na usafiri. Ziada ya urari wa malipo iliongezeka kwa asilimia 29.1 hadi dola milioni 1,023.2, ikichagizwa na ongezeko la watalii kwa asilimia 18.9.
Hitimisho: Uchumi wa Tanzania unaendelea kukua kwa kasi nzuri, lakini changamoto za mfumuko wa bei na nakisi ya biashara ya nje zinahitaji ufuatiliaji makini katika miezi ijayo.
Frequently Asked Questions
How fast is Tanzania's economy growing in 2026?
Real GDP grew 6.0 percent in Q1 2026, up from 4.3 percent a year earlier, with BOT projecting 5.9 percent growth for Q2 2026.
What is Tanzania's inflation rate in June 2026?
Headline inflation was 4.0 percent in June 2026, within the national 3–5 percent target band, though core inflation rose to 3.7 percent.
What is Tanzania's Central Bank Rate in 2026?
The CBR was held at 5.75 percent through Q2 2026, then raised to 6.25 percent for Q3 2026 effective 2 July 2026.
What is Tanzania's current account deficit?
The current account deficit widened to USD 2,303.9 million in the year ending June 2026, from USD 2,153.4 million a year earlier.
How much are Tanzania's foreign exchange reserves?
USD 5,673.5 million at end June 2026, covering 4.4 months of projected imports.
How is Zanzibar's economy performing in 2026?
Zanzibar's headline inflation rose to 6.0 percent while its current account surplus grew 29.1 percent to USD 1,023.2 million, driven by tourism.
Primary source: Bank of Tanzania, "Monthly Economic Review," July 2026 — Sections 1.0–3.3 and Statistical Tables A1–A10. This analysis is produced by TICGL/TERI for informational and research purposes and does not constitute investment advice.
A full statistical review of Zanzibar's economy — inflation, government budgetary operations, and external sector performance — based on the Bank of Tanzania's July 2026 Monthly Economic Review.
Published by TICGL Economic Research Desk · Source: Bank of Tanzania Monthly Economic Review, July 2026 (Section 3.0) · Reading time: ~9 minutes
6.0%
Headline inflation, June 2026
USD 1,023.2M
Current account surplus, FY to Jun-26 (+29.1%)
949,278
Tourist arrivals, FY to Jun-26 (+18.9%)
TZS 219.2 Bn
Fiscal deficit, June 2026
Executive Summary
Zanzibar's economy showed a mixed but broadly positive picture in June 2026. Headline inflation rose to 6.0 percent, from 4.1 percent a year earlier, driven by higher food prices and rising transport costs linked to fuel prices — food inflation alone reached 10.5 percent. On the fiscal side, domestic revenue and grants reached TZS 204.4 billion against a monthly target, while government spending of TZS 423.6 billion produced an overall fiscal deficit of TZS 219.2 billion, financed through domestic borrowing.
The external sector was the standout performer: Zanzibar's current account surplus grew 29.1 percent to USD 1,023.2 million in the year ending June 2026, driven overwhelmingly by tourism. Tourist arrivals rose 18.9 percent to 949,278, pushing service export receipts up 24.7 percent and cementing tourism as the backbone of Zanzibar's external earnings. Exports of goods and services grew 26.7 percent to USD 1,796.6 million, while imports grew 23.1 percent to USD 785.7 million.
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Month-on-month headline (Jun-26), up from 0.5% a year ago
Zanzibar's headline inflation climbed to 6.0 percent in June 2026, from 4.1 percent a year earlier, largely on higher food prices and rising transport costs linked to elevated fuel prices. By contrast, non-food inflation actually eased to 2.5 percent (from 3.9 percent a year earlier), with moderation in clothing/footwear, personal care and miscellaneous goods and services.
Chart 1: Zanzibar Headline, Food and Non-Food Inflation
Twelve-month percentage change
Chart unavailable — see Table 1 below.
Table 1: Zanzibar Inflation, Annual Change (%)
Measure
Jun-25
May-26
Jun-26
Headline inflation
4.1
5.5
6.0
Food
4.4
9.9
10.5
Non-food
3.9
2.1
2.5
Source: Office of the Chief Government Statistician (Table 3.1.1).
1.1 Inflation by Category, June 2026
Chart 2: Zanzibar CPI by Category, June 2026
Twelve-month percentage change, by COICOP group
Chart unavailable — see Table 2 below.
Table 2: Zanzibar CPI by Main Group, Annual Change (%)
Category
Weight (%)
Jun-25
May-26
Jun-26
Food and non-alcoholic beverages
41.9
5.0
9.7
10.3
Restaurants and accommodation services
1.4
0.6
7.4
7.4
Alcoholic beverages, tobacco and narcotics
0.2
-2.2
4.3
5.5
Transport
9.1
2.4
5.1
5.3
Furnishings, household equipment & maintenance
4.8
3.8
2.4
3.7
Personal care, social protection & misc.
1.7
4.8
0.8
0.8
Health
1.3
1.5
0.6
0.7
Housing, water, electricity, gas & other fuels
25.8
3.6
1.2
1.8
Clothing and footwear
6.3
5.0
1.6
1.4
Education
1.6
2.1
0.3
2.0
Recreation, sport and culture
1.1
5.1
2.6
2.0
Information and communication
4.2
2.8
0.1
-0.6
Insurance and financial services
0.5
0.0
0.0
0.0
All items (headline)
100.0
4.1
5.5
6.0
Source: Office of the Chief Government Statistician (Table 3.1.1). Base: July 2022 = 100.
Watch food and transport: Food (41.9% of the CPI basket) and restaurants/accommodation both accelerated sharply in the year to June 2026, while transport inflation stayed elevated on fuel costs — together these are the main drivers pulling Zanzibar's headline inflation above the 4-percent mark.
2. Government Budgetary Operations
In June 2026, Zanzibar's domestic revenue and grants reached TZS 204.4 billion, equivalent to 77.5 percent of the monthly target. Domestic revenue accounted for the largest share (86.6 percent), with the balance made up of grants. Tax collections reached TZS 160.1 billion (72.9 percent of target), with satisfactory performance in VAT and local excise duties, while non-tax revenue reached TZS 17 billion (78.2 percent of target).
Chart 3: Zanzibar Government Resources, June (TZS Billion)
2025 Actual vs 2026 Estimate vs 2026 Actual
Chart unavailable — see Table 3.
Table 3: Zanzibar Government Resources, June 2026 (TZS Billion)
Item
2025 Actual
2026 Estimate
2026 Actual
Tax on imports
30.4
31.5
26.4
VAT & excise duties (local)
43.5
46.9
47.5
Income tax
49.0
61.3
50.2
Other taxes
39.2
80.0
36.0
Non-tax revenue
20.5
21.8
17.0
Grants
2.3
22.4
27.3
Total resources
184.9
263.9
204.4
Source: Ministry of Finance and Planning, Zanzibar (Chart 3.2.1). "Other taxes" include hotel/restaurant levies, tour operator levy, revenue stamps, airport/seaport charges, road development fund, and petroleum levy.
Chart 4: Zanzibar Government Expenditure, June (TZS Billion)
2025 Actual vs 2026 Estimate vs 2026 Actual
Chart unavailable — see Table 4.
Table 4: Zanzibar Government Expenditure, June 2026 (TZS Billion)
Item
2025 Actual
2026 Estimate
2026 Actual
Wages and salaries
68.2
67.5
67.6
Other recurrent expenditure
92.6
55.1
41.1
Development expenditure
270.8
369.5
314.9
Total expenditure
431.6
492.1
423.6
Source: Ministry of Finance and Planning, Zanzibar (Chart 3.2.2). "Other recurrent expenditure" includes transfers, domestic debt interest, consolidated fund service and other charges.
Fiscal outcome: With expenditure of TZS 423.6 billion against resources of TZS 204.4 billion, Zanzibar recorded an overall fiscal deficit of TZS 219.2 billion in June 2026, financed entirely through domestic borrowing. Development spending (TZS 314.9 billion) made up 74 percent of total expenditure, underscoring continued heavy public investment.
3. External Sector Performance
USD 1,796.6M
Exports of goods & services, FY to Jun-26 (+26.7%)
USD 785.7M
Imports of goods & services, FY to Jun-26 (+23.1%)
USD 1,023.2M
Current account surplus, FY to Jun-26 (+29.1%)
949,278
Tourist arrivals, FY to Jun-26 (+18.9%)
Zanzibar's current account surplus grew 29.1 percent to USD 1,023.2 million in the year ending June 2026, from USD 792.4 million a year earlier — driven overwhelmingly by higher service receipts from tourism-related activities. The services account surplus reached USD 1,597.1 million (+24.5%), dwarfing the goods account deficit of USD 586.2 million.
Chart 5: Zanzibar Current Account Components, Year Ending June (USD Million)
2025 vs 2026 (provisional)
Chart unavailable — see Table 5.
Table 5: Zanzibar Current Account, Year Ending June (USD Million)
Item
2025
2026 (provisional)
% Change
Goods account (net)
-503.9
-586.2
16.3%
Services account (net)
1,283.3
1,597.1
24.5%
Goods & services (net)
779.4
1,010.9
29.7%
Primary income account (net)
11.6
10.3
-11.3%
Secondary income (net)
1.4
2.0
44.6%
Current account balance
792.4
1,023.2
29.1%
Source: Tanzania Revenue Authority, banks, and Bank of Tanzania computations (Table 3.3.1).
Chart 6: Zanzibar Exports vs Imports of Goods & Services, Year Ending June (USD Million)
Chart unavailable — see Table 5 above (Goods & Services rows) and Table 6 below.
Chart 7: Tourist Arrivals to Zanzibar, Year Ending June
Central driver of Zanzibar's services export growth
Chart unavailable — tourist arrivals grew 18.9% from approximately 798,384 (FY2025 est.) to 949,278 (FY2026).
3.1 Export Composition, Year Ending June 2026
Clove exports — Zanzibar's flagship traditional export — surged in value, more than doubling from a low base as unit prices rose 33.8 percent to USD 6,335.9 per tonne. Non-traditional exports (seaweed, manufactured goods, fish products) softened somewhat in value even as export volumes shifted, while "other exports" grew strongly.
Table 6: Zanzibar Exports of Goods, Year Ending June (USD Million)
Item
2025
2026 (provisional)
% Change
Clove (traditional export)
3.45
44.58
+1,192%
Seaweeds
3.22
1.74
-45.9%
Manufactured goods
15.39
10.76
-30.1%
Fish and fish products
1.18
0.89
-24.0%
Other exports
10.05
12.49
+24.2%
Grand total (goods exports)
33.29
70.46
+111.6%
Source: Tanzania Revenue Authority and Bank of Tanzania computations (Table 3.3.2).
3.2 Import Composition, Year Ending June 2026
Import growth was broad-based across categories: capital goods imports more than doubled (led by machinery, mechanical appliances and industrial transport equipment), consumer goods imports rose 45.6 percent (soap and detergents, textiles, footwear), while intermediate goods imports were roughly flat overall as a 35.7 percent drop in fuel and lubricant imports offset a 48.5 percent rise in industrial supplies.
Table 7: Zanzibar Imports of Goods, Year Ending June (USD Million)
Category
2025
2026 (provisional)
% Change
Capital goods
68.9
161.0
+133.7%
Intermediate goods
399.1
395.0
-1.0%
of which: Industrial supplies
123.2
183.0
+48.5%
of which: Fuel and lubricants
159.7
102.7
-35.7%
Consumer goods
69.1
100.6
+45.6%
Total imports (f.o.b)
537.2
656.7
+22.2%
Source: Tanzania Revenue Authority and Bank of Tanzania computations (Table 3.3.3).
4. Outlook
Tourism remains the growth engine: With arrivals up 18.9 percent and services receipts up 24.7 percent, tourism continues to be the single biggest driver of Zanzibar's external strength — an encouraging sign as global travel demand remains resilient despite Middle East-driven energy volatility.
Inflation needs monitoring: At 6.0 percent, Zanzibar's headline inflation now sits above Tanzania Mainland's 4.0 percent, driven by food and transport costs. Continued food price pressure could erode real incomes if not addressed through supply-side measures.
Fiscal deficit financed domestically: A TZS 219.2 billion monthly deficit financed entirely through domestic borrowing adds to Zanzibar's public debt burden over time; revenue mobilisation (currently below target on income tax and other taxes) will be key to narrowing this gap.
Muhtasari wa Uchumi wa Zanzibar, kutoka Taarifa ya Kila Mwezi ya BOT, Julai 2026
Mfumuko wa bei: Mfumuko wa bei Zanzibar uliongezeka hadi asilimia 6.0 mwezi Juni 2026, kutoka asilimia 4.1 mwaka jana, ukichagizwa na bei za vyakula (asilimia 10.5) na gharama za usafiri zinazohusiana na bei za mafuta.
Bajeti ya Serikali: Mapato ya ndani na ruzuku Zanzibar yalifikia Shilingi bilioni 204.4 mwezi Juni 2026 (asilimia 77.5 ya lengo), huku matumizi yakifikia Shilingi bilioni 423.6 — na kusababisha nakisi ya bajeti ya Shilingi bilioni 219.2, iliyofadhiliwa kwa mikopo ya ndani.
Sekta ya nje: Ziada ya urari wa malipo (current account surplus) iliongezeka kwa asilimia 29.1 hadi dola za Marekani milioni 1,023.2, ikichagizwa zaidi na mapato ya utalii. Idadi ya watalii iliongezeka kwa asilimia 18.9 hadi 949,278.
Biashara ya nje: Mauzo ya bidhaa na huduma nje yaliongezeka kwa asilimia 26.7 hadi dola milioni 1,796.6, huku uagizaji ukiongezeka kwa asilimia 23.1 hadi dola milioni 785.7. Zao la karafuu liliongoza mauzo, likiongezeka kwa kiasi kikubwa kutokana na ongezeko la bei za soko la dunia.
Hitimisho: Utalii unaendelea kuwa nguzo kuu ya uchumi wa Zanzibar, lakini changamoto ya mfumuko wa bei wa chakula na nakisi ya bajeti zinahitaji ufuatiliaji makini katika miezi ijayo.
Frequently Asked Questions
What is Zanzibar's inflation rate in June 2026?
Zanzibar's headline inflation rose to 6.0 percent in June 2026, from 4.1 percent a year earlier, driven mainly by food prices (10.5 percent) and transport costs.
How is Zanzibar's government budget performing?
Domestic revenue and grants reached TZS 204.4 billion in June 2026 (77.5% of target), against expenditure of TZS 423.6 billion, resulting in a TZS 219.2 billion deficit financed by domestic borrowing.
How much did Zanzibar's current account surplus grow?
It grew 29.1 percent to USD 1,023.2 million in the year ending June 2026, from USD 792.4 million a year earlier, driven by tourism receipts.
How important is tourism to Zanzibar's economy?
Tourist arrivals grew 18.9 percent to 949,278, and tourism is the dominant driver of Zanzibar's services account surplus and overall current account strength.
What does Zanzibar mainly export and import?
Exports are led by cloves and non-traditional exports (seaweed, manufactured goods, fish). Imports are dominated by intermediate goods, followed by capital and consumer goods.
Primary source: Bank of Tanzania, "Monthly Economic Review," July 2026 — Section 3.0 "Economic Performance in Zanzibar" and related statistical tables (Tables 3.1.1, 3.3.1–3.3.3, Charts 3.2.1–3.2.2). This analysis is produced by TICGL/TERI for informational and research purposes and does not constitute investment advice.
Tanzania External Debt Analysis July 2026: Borrower, Currency & Use-of-Funds Breakdown | TICGL Economic Review
TICGL Economic Review · Bank of Tanzania Monthly Economic Review, July 2026
Tanzania's External Debt, Decoded: Who We Owe, In What Currency, And What It Built
A full data-driven breakdown of Tanzania's national debt position as at June 2026 — external debt by borrower and creditor, currency composition, and use of funds — read alongside GDP growth, inflation and the external sector performance reported in the Bank of Tanzania's July 2026 Monthly Economic Review.
📅 Reporting period: June 2026🏦 Source: Bank of Tanzania, Monthly Economic Review, July 2026✍️ Analysis by: TICGL Economic Research Desk⏱️ Reading time: ~14 minutes
Tanzania's economy carried strong growth momentum into the second quarter of 2026, with real GDP expanding 6.0 percent in Q1 2026 against 4.3 percent a year earlier, even as global energy and shipping costs stayed elevated on the back of the Middle East conflict. Headline inflation eased to 4.0 percent in June 2026, still comfortably inside the Bank of Tanzania's 3–5 percent target band, though core inflation's climb to 3.7 percent pushed the Monetary Policy Committee to raise the Central Bank Rate from 5.75 percent to 6.25 percent for Q3 2026.
On the debt side — the focus of this analysis — Tanzania's total national debt stock reached USD 50,595.8 million at the end of June 2026, essentially flat against May's USD 50,599.0 million. External debt made up 70.4 percent of that total at USD 35,606.1 million, with the central government responsible for the overwhelming majority of it. The currency mix remains heavily dollar-denominated, exposing the debt-service bill to shilling depreciation risk, while use-of-funds data shows financing concentrated in balance-of-payments/budget support, transport and telecommunication infrastructure, and social welfare and education.
This page unpacks the three debt breakdowns TICGL clients ask about most: who owes the money (by borrower), who lent it and in what currency, and what it was used for — set against the wider macroeconomic backdrop from the Bank of Tanzania's July 2026 Monthly Economic Review.
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Related deep-dive: What's Next for Tanzania's Economy?
Before the numbers below, read TICGL's policy analysis on the structural gaps standing between Tanzania and its DIRA 2050 trillion-dollar economy ambition — essential context for interpreting today's debt and growth data.
Real GDP in Mainland Tanzania grew 6.0 percent in Q1 2026 against 4.3 percent in Q1 2025, driven chiefly by agriculture, financial and insurance services, and transport and storage. The Bank of Tanzania projects Q2 2026 growth of around 5.9 percent, supported by private-sector credit expansion, stable power supply, strong mineral output, tourism resilience, and infrastructure investment ahead of AFCON 2027.
Quarterly Real GDP Growth, 2022–2026 (%)
At 2019 prices, Mainland Tanzania · Source: NBS & BOT computations
Headline, Food, Energy & Core Inflation (%)
June 2025 – June 2026 · Source: NBS & BOT computations
Table 1: Selected Macroeconomic Indicators, June 2026
Indicator
Jun-25
May-26
Jun-26
Headline inflation (%)
3.3
4.2
4.0
Core inflation (%)
1.9
3.4
3.7
Food inflation (%)
7.3
5.6
4.1
Energy, fuel & utilities inflation (%)
2.1
5.0
6.3
Central Bank Rate (%)
—
5.75
5.75 (raised to 6.25 from Q3 2026)
Overall lending rate (%)
15.23
15.32
15.20
Extended broad money M3 growth (y/y, %)
18.7
25.2
25.4
Private sector credit growth (y/y, %)
—
23.2
28.1
Exchange rate (TZS/USD, monthly avg.)
—
2,616.88
2,633.73
Source: Bank of Tanzania Monthly Economic Review, July 2026.
03
National Debt Overview
Tanzania's national debt — the combined external and domestic obligations of government and the private sector — stood at USD 50,595.8 million at the end of June 2026, marginally below May's USD 50,599.0 million. External debt accounted for 70.4 percent of the total, with domestic debt (denominated in Tanzanian shillings) making up the balance.
National Debt Stock Trend: External vs Domestic (USD Millions)
Monthly, June 2025 – June 2026 · Source: Ministry of Finance & Bank of Tanzania (Table A10)
Table 2: National Debt Stock, Monthly Trend (USD Millions)
Period
External Debt
Domestic Debt
Total Debt
TZS/USD (EOP)
Jun-25
34,765.3
13,631.1
48,396.3
2,604.6
Sep-25
35,642.2
15,407.9
51,050.1
2,442.8
Dec-25
35,528.8
15,485.0
51,013.8
2,447.5
Mar-26
35,886.2
14,917.3
50,803.5
2,577.4
Apr-26
36,506.1
15,117.6
51,623.7
2,602.0
May-26
35,553.3
15,045.7
50,599.0
2,609.2
Jun-26
35,606.1
14,989.7
50,595.8
2,623.5
Source: Ministry of Finance and Bank of Tanzania, Table A10, BOT Monthly Economic Review, July 2026.
Stable overall stock
Total national debt has held in a narrow USD 48.4–51.7 billion band over the past 13 months, suggesting disciplined overall borrowing even as individual components moved.
Domestic debt eased back
Domestic debt peaked near USD 15.7 billion in October 2025 and has since drifted down to USD 15.0 billion, partly a function of shilling movements against the dollar.
External debt dominates
External obligations consistently represent roughly seven of every ten dollars of national debt, keeping Tanzania's debt-service bill sensitive to global interest rates and the exchange rate.
04
External Debt Stock by Borrower
The external debt stock (public and private combined) rose marginally by 0.1 percent to USD 35,606.1 million at the end of June 2026. The central government remains by far the dominant borrower, holding 83.1 percent of the stock, with the private sector holding the remaining 16.9 percent. Public corporations carried no external debt in June 2026 — TANESCO, ATCL, TRC, TPA, TFC and DAWASA are recorded as having no outstanding external debt.
External Debt Stock by Borrower, June 2026
Share of total external debt stock (%)
External Debt by Borrower: 3-Month Trend
USD Millions · Jun-25, May-26, Jun-26
Table 3: External Debt Stock by Borrower (USD Millions)
Borrower
Jun-25 (Amount)
Share %
May-26 (Amount)
Share %
Jun-26 (Amount)
Share %
Central government
28,243.6
81.2
29,611.6
83.3
29,606.0
83.1
— Disbursed outstanding debt (DOD)
28,164.9
81.0
29,531.1
83.1
29,525.6
82.9
— Interest arrears
78.7
0.2
80.6
0.2
80.4
0.2
Private sector
6,517.9
18.7
5,941.7
16.7
6,000.1
16.9
— Disbursed outstanding debt (DOD)
5,884.3
16.9
5,739.5
16.1
5,761.9
16.2
— Interest arrears
633.6
1.8
202.3
0.6
238.3
0.7
Public corporations
3.8
0.0
0.0
0.0
0.0
0.0
External debt stock
34,765.3
100.0
35,553.3
100.0
35,606.1
100.0
Source: Ministry of Finance and Bank of Tanzania, Table 2.7.1, BOT Monthly Economic Review, July 2026. DOD = disbursed outstanding debt.
During June 2026, external loan disbursements totalled USD 379.8 million — mostly to the central government — against external debt service payments of USD 249.2 million, of which USD 184.9 million was principal repayment.
05
External Debt Stock by Creditor
Multilateral institutions continue to be Tanzania's largest external creditor group, holding 59.3 percent of the external debt stock in June 2026 — up from 56.8 percent a year earlier — followed by commercial lenders at 34.4 percent, bilateral creditors at 4.3 percent, and export credit agencies at 1.9 percent.
External Debt by Creditor Category, June 2026
Share of total external debt stock (%)
Creditor Composition Trend (%)
Jun-25 → May-26 → Jun-26
Table 4: External Debt Stock by Creditor Category (USD Millions)
Creditor
Jun-25
Share %
May-26
Share %
Jun-26
Share %
Multilateral
19,756.7
56.8
20,977.6
59.0
21,122.7
59.3
Bilateral
1,507.8
4.3
1,558.5
4.4
1,529.3
4.3
Commercial
12,439.1
35.8
12,331.1
34.7
12,261.4
34.4
Export credit
1,061.7
3.1
686.2
1.9
692.7
1.9
External debt stock
34,765.3
100.0
35,553.4
100.0
35,606.1
100.0
Source: Ministry of Finance and Bank of Tanzania, Table 2.7.2, BOT Monthly Economic Review, July 2026.
06
Disbursed Outstanding Debt by Use of Funds
Breaking the disbursed outstanding external debt down by what it actually financed shows Balance of Payments and budget support leading at 22.1 percent, closely followed by transport and telecommunication at 22.0 percent — together nearly 45 percent of all disbursed external debt. Social welfare and education (19.5%) and energy and mining (12.8%) round out the largest categories, while tourism remains the smallest recipient at just 1.7 percent.
Disbursed Outstanding Debt by Use of Funds (% Share)
Jun-25 vs May-26 vs Jun-26 · Source: Table 2.7.3, BOT Monthly Economic Review
Table 5: Disbursed Outstanding Debt by Use of Funds (Percentage Share)
Activity
Jun-25
May-26
Jun-26
Trend
Balance of Payments & budget support
21.9
22.3
22.1
▲ Largest use
Transport & telecommunication
21.1
22.1
22.0
▲
Social welfare & education
19.9
19.5
19.5
◆ Stable
Energy & mining
13.0
12.4
12.8
◆ Stable
Real estate & construction
4.4
5.1
5.1
▲
Agriculture
5.3
5.4
5.3
◆ Stable
Finance & insurance
4.1
4.2
4.2
◆ Stable
Other
5.1
4.6
4.6
▼
Industries
3.5
2.8
2.8
▼
Tourism
1.7
1.7
1.7
◆ Stable, smallest
Total
100.0
100.0
100.0
—
Source: Ministry of Finance and Bank of Tanzania, Table 2.7.3, BOT Monthly Economic Review, July 2026.
Infrastructure-heavy portfolio
Transport, telecommunication, energy and mining together absorb over a third of disbursed debt — consistent with Tanzania's strategic infrastructure investment agenda.
BoP support still large
Nearly a quarter of external debt exists to support the balance of payments and government budget directly, rather than a specific physical asset.
Tourism under-leveraged
Despite tourism being a top foreign-exchange earner (see external sector data below), it draws the smallest share of external financing at 1.7 percent.
07
Disbursed Outstanding Debt by Currency Composition
Currency risk in Tanzania's external debt portfolio remains concentrated. The US Dollar accounted for 66.2 percent of disbursed outstanding debt in June 2026 — up slightly from 65.9 percent in May — followed by the Euro at 17.4 percent and the Chinese Yuan at 6.7 percent. All other currencies combined made up just 9.8 percent.
Currency Composition, June 2026
Share of disbursed outstanding external debt (%)
Currency Composition Trend (%)
Jun-25 → May-26 → Jun-26
Table 6: Disbursed Outstanding Debt by Currency Composition (Percentage Share)
Currency
Jun-25
May-26
Jun-26
United States Dollar
66.0
65.9
66.2
Euro
17.7
17.5
17.4
Chinese Yuan
6.4
6.6
6.7
Other currencies
9.9
9.9
9.8
Total
100.0
100.0
100.0
Source: Ministry of Finance and Bank of Tanzania, Table 2.7.4, BOT Monthly Economic Review, July 2026.
Two-thirds of Tanzania's external debt service bill moves directly with the US Dollar–Shilling exchange rate. With the shilling depreciating 0.08 percent year-on-year to June 2026 and averaging TZS 2,633.73/USD in June, dollar-denominated obligations remain the single largest currency exposure in the portfolio.
08
Domestic Debt Developments
Government's domestic debt stock rose marginally to TZS 39,325.85 billion at the end of June 2026, up from TZS 39,257.3 billion in May. Government securities (Treasury bills, bonds and stocks) make up 84.7 percent of domestic debt, with the overdraft facility with the Bank of Tanzania constituting the largest slice of non-securitized debt. Commercial banks (28.8%) and pension funds (26.4%) remain the government's largest domestic creditors.
Domestic Debt Stock Growth, 2018–2026
TZS Billions, end of June each year · Source: Ministry of Finance
Domestic Debt by Creditor Category, June 2026
Share of domestic debt stock (%)
Table 7: Government Domestic Debt by Creditor Category (TZS Billions)
Source: Ministry of Finance and Bank of Tanzania, Table 2.7.6, BOT Monthly Economic Review, July 2026.
09
External Sector Performance & Reserves
The current account deficit widened to USD 2,303.9 million in the year ending June 2026, from USD 2,153.4 million a year earlier, as import growth (+18.1% to USD 20,815.7 million) outpaced export growth (+17.2% to USD 19,923.6 million). Gold remained the standout export performer, and gross official foreign exchange reserves closed June 2026 at USD 5,673.5 million — equivalent to 4.4 months of projected imports, above the four-month national benchmark.
Exports vs Imports of Goods & Services
Year ending June, USD Millions
Top Export Commodities, Year Ending June 2026
USD Millions · Source: Table 2.8.2
Table 8: Current Account Summary (USD Millions)
Item
Year ending June 2025
Year ending June 2026 (p)
% Change
Goods account balance
-4,580.0
-5,657.7
23.5
Services account balance
3,951.4
4,765.6
20.6
Exports of goods and services
17,001.3
19,923.6
17.2
Imports of goods and services
17,629.8
20,815.7
18.1
Primary income balance
-2,011.4
-1,773.2
-11.8
Secondary income balance
486.6
361.4
-25.7
Current account balance
-2,153.4
-2,303.9
7.0
Source: Tanzania Revenue Authority, banks, and Bank of Tanzania, Table 2.8.1, BOT Monthly Economic Review, July 2026.
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What This Means for Investors & Policymakers
Debt sustainability looks manageable
National debt has held broadly steady for over a year and reserves comfortably exceed the four-month import cover benchmark — a reassuring signal for sovereign risk assessments.
Dollar exposure needs active hedging
With 66.2 percent of external debt in USD, any renewed dollar strength or shilling weakness will directly raise the shilling cost of debt service — a key variable for PPP and infrastructure financing structures.
Infrastructure financing dominates
Nearly 35 percent of external debt use of funds sits in transport, telecommunication, energy and mining — sectors where TICGL's PPP advisory work is most active.
Multilateral reliance is rising
Multilateral creditors' share climbed from 56.8% to 59.3% year-on-year, generally favourable given typically concessional terms relative to commercial borrowing.
Widening current account deficit
Import growth continues to outpace exports, reinforcing the case for export diversification beyond gold and stronger domestic value addition.
Rate environment tightening
The MPC's move to 6.25 percent for Q3 2026 signals vigilance on second-round inflation effects — relevant for anyone modelling local-currency financing costs.
Continue Exploring TICGL Economic Research
Go deeper into Tanzania's macroeconomic outlook, investment climate and data tools with these related resources from TICGL.
Muhtasari wa Deni la Taifa la Tanzania — Juni 2026
Deni la taifa la Tanzania lilifikia Dola za Kimarekani milioni 50,595.8 mwishoni mwa Juni 2026, ambapo asilimia 70.4 ni deni la nje na asilimia iliyobaki ni deni la ndani. Serikali kuu ndiyo mkopaji mkubwa zaidi wa deni la nje, ikiwa na asilimia 83.1 ya deni lote la nje, huku sekta binafsi ikiwa na asilimia 16.9 iliyobaki.
Deni la nje kwa mkopaji: Serikali kuu — asilimia 83.1; Sekta binafsi — asilimia 16.9.
Deni la nje kwa fedha: Dola ya Marekani — asilimia 66.2; Euro — asilimia 17.4; Yuan ya China — asilimia 6.7; fedha nyingine — asilimia 9.8.
Matumizi ya deni: Msaada wa Mizani ya Malipo na bajeti (22.1%), usafirishaji na mawasiliano (22.0%), ustawi wa jamii na elimu (19.5%), nishati na madini (12.8%).
Uchumi kwa ujumla: Pato la Taifa liliongezeka kwa asilimia 6.0 katika robo ya kwanza ya 2026, huku mfumuko wa bei ukiwa asilimia 4.0 mwezi Juni 2026, ndani ya lengo la asilimia 3–5.
Akiba ya fedha za kigeni: Dola milioni 5,673.5, sawa na miezi 4.4 ya uagizaji bidhaa nje — juu ya kiwango cha chini cha miezi minne kinachohitajika.
Tanzania Government Domestic Debt by Creditor Category, June 2026: Who Holds the Shilling Debt? | TICGL
TICGL Economic Review · Bank of Tanzania Monthly Economic Review, July 2026
Who Actually Finances Government? Tanzania's Domestic Debt by Creditor Category
Tanzania's government owes TZS 39.3 trillion in domestic debt as at June 2026 — and the identity of the lenders matters as much as the size of the bill. This analysis breaks down exactly which institutions hold that debt, how the mix has shifted, and what it signals for bank lending, pension fund portfolios, and the Bank of Tanzania's own balance sheet.
📅 Reporting period: June 2026🏦 Source: Bank of Tanzania, Monthly Economic Review, July 2026✍️ Analysis by: TICGL Economic Research Desk⏱️ Reading time: ~11 minutes
Government's domestic debt stock rose marginally to TZS 39,325.85 billion at the end of June 2026, up from TZS 39,257.3 billion in May 2026 and roughly triple the TZS 13,228.2 billion recorded in June 2018. Unlike external debt — which is dominated by multilateral and bilateral development partners — domestic debt is financed almost entirely by Tanzanian financial institutions and the Bank of Tanzania itself.
Commercial banks are the single largest creditor group, holding 28.8 percent (TZS 11,320.8 billion) of the domestic debt stock in June 2026, followed closely by pension funds at 26.4 percent (TZS 10,399.0 billion). The Bank of Tanzania itself holds 18.3 percent (TZS 7,197.1 billion) — largely through the overdraft facility extended to government — while insurance companies and BOT's special funds together add a further 7.2 percent. The remaining 19.2 percent sits with "other" holders: public institutions, private companies, individuals, and non-resident investors.
By instrument, government securities — dominated by Treasury bonds — account for 84.7 percent of the stock, with the government's overdraft facility with the central bank making up nearly all of the remaining 15.3 percent. This page walks through each of these breakdowns in detail, with the full underlying data tables from the Bank of Tanzania's July 2026 Monthly Economic Review.
This page covers domestic debt. For the external side of Tanzania's national debt position — by borrower, creditor, currency and use of funds — read our companion analysis.
Six categories of creditor hold Tanzania's government domestic debt. Commercial banks lead the field, edging up from 28.4 percent in May 2026 to 28.8 percent in June — the highest reading of the past year — as banks continue to treat government securities as a core, low-risk, liquid asset. Pension funds sit close behind at 26.4 percent, having eased slightly from a 26.6 percent peak in May, reflecting their structural role as long-duration buyers of Treasury bonds matched against long-term pension liabilities.
The Bank of Tanzania's own exposure — chiefly the overdraft facility used to smooth government cash-flow timing — has been trending down, from 20.2 percent in June 2025 to 18.3 percent in June 2026, even as the absolute overdraft balance rose (see the instrument breakdown below). Insurance companies hold a stable 5.1 percent, and BOT's special funds a small but rising 2.1 percent. The fastest-growing bucket is "Others" — public institutions, private companies, individuals and non-residents — up from 18.1 percent to 19.2 percent over the year, pointing to broadening retail and institutional participation in government securities.
Domestic Debt by Creditor Category, June 2026
Share of domestic debt stock (excl. liquidity papers), %
Domestic Debt by Creditor Category, June 2026
TZS Billions, absolute holdings
Table 1: Government Domestic Debt by Creditor Category (TZS Billions)
Source: Ministry of Finance and Bank of Tanzania, Table 2.7.6, BOT Monthly Economic Review, July 2026.
Banks remain the anchor creditor
At 28.8 percent, commercial banks hold more government debt than any other single category — a reminder that bank balance sheets and sovereign risk are closely intertwined in Tanzania.
Pension funds are near-equal partners
Pension funds' 26.4 percent share means retirement savings are a major, structurally stable source of government financing — but also ties pension solvency to sovereign credit quality.
BOT's direct exposure is easing — in share terms
The central bank's share has fallen almost two full percentage points year-on-year, even though its overdraft balance in absolute terms has grown (see Table 2 below).
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Creditor Mix: How It Has Shifted
Viewed as a 12-month trend, three patterns stand out: commercial banks' share has been the most volatile but ends the period at its highest point; the Bank of Tanzania's share has declined steadily; and the "Others" category has grown the most consistently, suggesting government securities are reaching an increasingly diverse investor base beyond the traditional banking and pension sector.
Composition of the full domestic debt stock across the three most recent periods
04
Domestic Debt by Borrowing Instrument
Alongside who holds the debt, it is worth seeing how it was raised. Government securities — Treasury bonds, Treasury bills, government stocks and tax certificates combined — made up 84.7 percent of the domestic debt stock in June 2026, with Government bonds alone accounting for 79.9 percent, confirming that Tanzania's domestic debt is overwhelmingly long-duration and market-based rather than short-term. The remaining 15.3 percent is non-securitized debt, almost entirely the overdraft facility with the Bank of Tanzania (TZS 6,011.4 billion in June 2026, up from TZS 5,314.0 billion a year earlier).
Domestic Debt by Instrument, June 2026
Share of domestic debt stock (%)
Instrument Mix Trend (%)
Jun-25 → May-26 → Jun-26
Table 2: Government Domestic Debt by Borrowing Instrument (TZS Billions)
Instrument
Jun-25
Share %
May-26
Share %
Jun-26
Share %
Government securities
30,170.4
85.0
33,610.9
85.6
33,314.4
84.7
— Treasury bills
2,001.3
5.6
1,562.8
4.0
1,757.5
4.5
— Government stocks
187.1
0.5
135.7
0.3
135.7
0.3
— Government bonds
27,982.0
78.8
31,912.3
81.3
31,421.2
79.9
— Tax certificates
0.1
0.0
0.1
0.0
0.1
0.0
Non-securitized debt
5,332.4
15.0
5,646.4
14.4
6,011.4
15.3
— Overdraft (with Bank of Tanzania)
5,314.0
15.0
5,646.4
14.4
6,011.4
15.3
— Other liabilities
18.4
0.1
0.0
0.0
0.0
0.0
Domestic debt stock (excl. liquidity papers)
35,502.8
100.0
39,257.3
100.0
39,325.8
100.0
Source: Ministry of Finance and Bank of Tanzania, Table 2.7.5, BOT Monthly Economic Review, July 2026.
Reading Tables 1 and 2 together: the Bank of Tanzania's 18.3 percent creditor share is made up almost entirely of the overdraft facility, not government securities holdings — meaning its exposure is a short-term cash-management tool rather than a market investment position, even though the balance has grown year-on-year.
05
Eight-Year Growth of Domestic Debt, 2018–2026
Tanzania's domestic debt stock has nearly tripled since June 2018, rising from TZS 13,228.2 billion to TZS 39,325.8 billion in June 2026. Growth accelerated sharply between June 2020 and June 2023 — a period that coincided with pandemic-related fiscal pressure and a deliberate policy shift toward deepening the domestic securities market — before moderating to single-digit annual growth over the past two years.
Government Domestic Debt Stock, June 2018 – June 2026
TZS Billions, end of June each year (latest two points: May-26 and Jun-26) · Source: Ministry of Finance
Table 3: Government Domestic Debt Stock, 2018–2026 (TZS Billions)
Period
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Jun-23
Jun-24
Jun-25
May-26
Jun-26
Domestic debt stock
13,228.2
14,863.1
15,587.7
18,934.3
24,039.8
28,927.1
31,938.2
35,502.8
39,257.3
39,325.8
Source: Ministry of Finance, Chart 2.7.1, BOT Monthly Economic Review, July 2026.
06
June 2026 Financing Activity
In June 2026 alone, government mobilised TZS 468 billion from the domestic market through new security issuance — TZS 273.3 billion in Treasury bonds and TZS 194.7 billion in Treasury bills. Against this, domestic debt service payments totalled TZS 1,551.5 billion, comprising TZS 1,264.4 billion in principal repayments and TZS 287.1 billion in interest — a reminder that gross issuance each month is substantially smaller than the roll-over and interest burden the stock already carries.
New issuance, June 2026
TZS 468.0 billion raised: TZS 273.3bn in Treasury bonds (58.4%) and TZS 194.7bn in Treasury bills (41.6%).
Debt service, June 2026
TZS 1,551.5 billion paid out: TZS 1,264.4bn principal (81.5%) and TZS 287.1bn interest (18.5%).
Net financing gap
Debt service outpaced new issuance by more than 3-to-1 in June — the difference is met through the stock of outstanding securities rolling over and the overdraft facility.
07
What This Means for Banks, Pension Funds & Policy
Watch for crowding-out signals
With commercial banks holding 28.8 percent of government debt, sustained heavy issuance could compete with credit to the private sector for balance-sheet space — worth monitoring alongside the 28.1 percent private-sector credit growth reported for June 2026.
Pension fund concentration risk
Pension funds' 26.4 percent exposure to government paper means fund solvency and sovereign credit risk are closely linked — a standard feature of frontier markets, but one that merits ongoing asset-liability monitoring.
Diversifying the investor base is a positive sign
The rising "Others" category (19.2 percent, including non-residents) suggests Tanzania's domestic securities market is broadening beyond banks and pension funds — generally a healthy sign for market depth and liquidity.
Overdraft reliance bears watching
The BOT overdraft facility grew from TZS 5,314.0bn to TZS 6,011.4bn year-on-year — a short-term liquidity tool, but one whose growing absolute size is worth tracking against statutory limits.
Long-duration financing dominates
With Treasury bonds at 79.9 percent of the stock, government has locked in long-term financing terms, reducing near-term rollover risk relative to a bill-heavy structure.
Steady long-run growth, moderating pace
After a rapid build-up from 2020–2023, domestic debt growth has slowed to low single digits over the past year — a signal of increasing fiscal discipline on the domestic financing side.
Continue Exploring TICGL Economic Research
Go deeper into Tanzania's debt position, macroeconomic outlook, investment climate and data tools with these related resources from TICGL.
Muhtasari wa Deni la Ndani la Serikali kwa Kundi la Mkopeshaji — Juni 2026
Deni la ndani la Serikali lilifikia TZS trilioni 39.33 mwishoni mwa Juni 2026, likiongezeka kidogo kutoka TZS trilioni 39.26 mwezi Mei 2026, na karibu mara tatu ya kiwango cha Juni 2018 (TZS trilioni 13.2).
Benki za kibiashara ndizo mkopeshaji mkubwa zaidi wa ndani — asilimia 28.8 ya deni lote.
Mifuko ya hifadhi ya jamii (pension funds) zinafuata kwa karibu — asilimia 26.4.
Benki Kuu ya Tanzania (BOT) inashikilia asilimia 18.3, hasa kupitia huduma ya overdraft kwa Serikali.
Makampuni ya bima — asilimia 5.1, na mifuko maalum ya BOT — asilimia 2.1.
Wengine (taasisi za umma, makampuni binafsi, watu binafsi, na wawekezaji wa nje) — asilimia 19.2, kundi linaloongezeka kwa kasi zaidi.
Kwa aina ya dhamana: Hati fungani za Serikali (Treasury bonds) ndizo kubwa zaidi — asilimia 79.9 ya deni lote la ndani, huku dhamana za Serikali (securities) kwa ujumla zikiwa asilimia 84.7.
Tanzania's current account deficit widened to USD 2.3 billion in the year ending June 2026 as imports outran exports. This analysis breaks the external sector into its moving parts — the current account balance, what Tanzania earns from services exports by category, and what it pays for services imports — with the full underlying data from the Bank of Tanzania's July 2026 Monthly Economic Review.
📅 Reporting period: Year ending June 2026🏦 Source: Bank of Tanzania, Monthly Economic Review, July 2026✍️ Analysis by: TICGL Economic Research Desk⏱️ Reading time: ~12 minutes
Current AccountServices TradeTourism ReceiptsFreight & TransportForeign Exchange Reserves
-USD 2,303.9M
Current account balance, YE Jun-26
USD 19,923.6M
Exports of goods & services (+17.2%)
USD 20,815.7M
Imports of goods & services (+18.1%)
USD 8,140.9M
Total services receipts (+14.4%)
USD 3,375.3M
Total services payments (+6.7%)
4.4 months
Import cover from reserves
01
Executive Summary
Tanzania's external position stayed broadly resilient in the year ending June 2026 despite a difficult global backdrop — the prolonged Middle East conflict kept energy prices and freight costs elevated for much of the period. Strong gold prices, resilient tourism and firmer regional trade lifted export earnings, but import growth outpaced exports, widening the current account deficit to USD 2,303.9 million, up 7.0 percent from USD 2,153.4 million a year earlier.
On the export side, services receipts rose 14.4 percent to USD 8,140.9 million, powered by travel (tourism) receipts of USD 4,405.5 million — still Tanzania's single largest services export category — on the back of an 18.9 percent jump in tourist arrivals to 949,278 (Zanzibar) and a 4.5 percent rise to 2,291,479 for the Mainland. Transport receipts also grew strongly, tracking rising transit cargo volumes through Tanzania's corridors.
On the import side, services payments rose a more modest 6.7 percent to USD 3,375.3 million, driven chiefly by higher freight payments linked to elevated global shipping costs and greater merchandise import volumes. Gross official reserves closed the period at USD 5,673.5 million — 4.4 months of import cover, comfortably above the four-month national benchmark.
The current account is the sum of four sub-balances: the goods account, the services account, the primary income account (compensation of employees, investment income), and the secondary income account (transfers such as remittances and grants). In the year ending June 2026, only the services and secondary income balances were in surplus — the goods account deficit widened sharply enough to push the overall current account further into deficit.
Current Account Components, Year Ending June (USD Millions)
2025 vs 2026(p) · Source: Table 2.8.1
Monthly Current Account Balance (USD Millions)
Jun-25, May-26, Jun-26
Table 1: Current Account Summary (USD Millions)
Item
Jun-25
May-26
Jun-26
YE Jun-2025
YE Jun-2026 (p)
% Change
Goods account
-349.7
-771.8
-595.7
-4,580.0
-5,657.7
23.5
— Exports
913.9
963.3
1,069.8
9,885.9
11,782.7
19.2
— Imports
1,263.6
1,735.1
1,665.5
14,465.9
17,440.4
20.6
Services account
404.6
368.7
488.7
3,951.4
4,765.6
20.6
— Receipts
654.4
647.5
743.8
7,115.4
8,140.9
14.4
— Payments
249.8
278.8
255.1
3,163.9
3,375.3
6.7
Goods and services balance
54.9
-403.1
-107.0
-628.5
-892.1
41.9
Primary income account
-184.2
-136.9
-126.7
-2,011.4
-1,773.2
-11.8
Secondary income account
36.8
55.3
47.9
486.6
361.4
-25.7
Current account balance
-92.5
-484.7
-185.8
-2,153.4
-2,303.9
7.0
Source: Tanzania Revenue Authority, banks, and Bank of Tanzania, Table 2.8.1, BOT Monthly Economic Review, July 2026.
Goods deficit is the main driver
The goods account deficit alone widened by USD 1,077.7 million year-on-year — more than explaining the entire increase in the current account deficit.
Services remain a reliable offset
The services surplus grew 20.6 percent to USD 4,765.6 million, cushioning close to half of the goods deficit.
Primary income deficit is narrowing
Lower interest and investment income payments to non-residents cut the primary income deficit by 11.8 percent — a rare bright spot.
03
Exports: Services Receipts by Category
Service exports increased 14.4 percent to USD 8,140.9 million in the year ending June 2026, up from USD 7,115.4 million a year earlier. Travel (tourism) is by far the largest category, contributing USD 4,405.5 million — 54.1 percent of all services receipts — supported by a 4.5 percent rise in Mainland international tourist arrivals to 2,291,479. Transport receipts followed at USD 3,230.9 million (39.7 percent), firming on rising freight earnings from transit cargo through Tanzania's regional transport corridors. Other services — construction, insurance, financial, telecommunication, computer and information, government, personal and other business services — contributed the remaining USD 504.5 million (6.2 percent).
Services Receipts by Category, Year Ending June 2026(p)
Share of total services receipts (%)
Services Receipts by Category: 3-Year Trend
USD Millions, Year ending June
Table 2: Services Receipts by Category (USD Millions, Year Ending June)
Category
2024
2025
2026(p)
Share of 2026 total
Travel (Tourism)
3,679.7
4,096.5
4,405.5
54.1%
Transport
2,304.3
2,538.3
3,230.9
39.7%
Other services
594.6
480.6
504.5
6.2%
Total services receipts
4,578.6
7,115.4
8,140.9
100.0%
Source: Banks and Bank of Tanzania computations, Chart 2.8.3, BOT Monthly Economic Review, July 2026. Note: "Other services" includes construction, insurance, financial, telecommunication, computer and information, charges for the use of intellectual property, government, personal, and other business services.
On a monthly basis, service receipts rose to USD 743.8 million in June 2026, up from USD 654.4 million in June 2025 — a reminder that tourism and transport earnings are the fastest-growing pillars of Tanzania's export base, alongside gold.
04
Exports of Goods: Context
Goods exports rose 19.2 percent to USD 11,782.7 million, continuing to be led by gold (USD 5,522.9 million), which benefited from elevated international gold prices. Manufactured goods, tobacco, cashew nuts and coffee all posted solid gains, aided by favourable commodity prices and strengthening regional demand.
Top Export Commodities of Goods, Year Ending June 2026(p)
USD Millions · Source: Table 2.8.2, BOT Monthly Economic Review
05
Imports: Services Payments by Category
Service payments rose a more moderate 6.7 percent to USD 3,375.3 million in the year ending June 2026, from USD 3,163.9 million a year earlier — a much slower pace than the 14.4 percent growth in services receipts. The Bank of Tanzania attributes the rise chiefly to higher freight payments, consistent with elevated global shipping costs, continued disruptions to maritime transport, and the increase in merchandise imports. On a monthly basis, service payments rose to USD 255.1 million in June 2026 from USD 249.8 million in June 2025.
To show how services payments split by category, TICGL draws on the Bank of Tanzania's calendar-year Balance of Payments series, which separately tracks Transport, Travel and Other services debits. On this basis, Transport is consistently the largest services payment category — reflecting Tanzania's reliance on imported freight, shipping and international transport services — followed by Other services and Travel.
Source: Bank of Tanzania, Table A5 (Tanzania Balance of Payments), BOT Monthly Economic Review, July 2026. Figures are calendar-year balance of payments data, presented as debits (negative values); r denotes revised data, p denotes provisional data. This calendar-year series is shown here because it is the most reliable disaggregation of services payments by category currently published; it complements the fiscal year-ending-June totals in Table 1 and the text above.
Note on data: the Bank of Tanzania's July 2026 Monthly Economic Review reports a fiscal-year (year-ending-June) total for services payments of USD 3,375.3 million, which TICGL treats as the authoritative aggregate figure used throughout this page. The category-level split shown in Table 3 and the charts above uses the Bank's separately published calendar-year Balance of Payments series (Table A5) for Transport, Travel and Other services debits, since it is the cleanest disaggregated source available for this breakdown.
Freight costs are the swing factor
Transport payments have grown faster than any other services payment category over the past five years, tracking global shipping cost cycles.
Travel payments are rising too
Outbound travel spending has more than tripled since 2021, reflecting both currency effects and growing outbound travel demand.
Receipts still comfortably exceed payments
At roughly 2.4 times the size of payments, Tanzania's services trade surplus remains a structural strength of the external account.
06
Imports of Goods: Context
Goods imports rose 20.6 percent to USD 17,440.4 million, driven mainly by higher imports of industrial supplies, refined petroleum products and capital goods. Refined white petroleum products — 16.2 percent of total goods imports — rose 19.5 percent to USD 2,826.9 million, reflecting elevated global oil prices amid continued Middle East tensions.
Top Import Categories of Goods, Year Ending June 2026(p)
USD Millions · Source: Table 2.8.4, BOT Monthly Economic Review
07
Foreign Exchange Reserves & Import Cover
Despite the widening current account deficit, gross official foreign exchange reserves remained at a healthy level, closing June 2026 at USD 5,673.5 million — supported by sustained gold export earnings and the Bank of Tanzania's domestic gold purchase programme. This is equivalent to 4.4 months of projected imports of goods and services, above both the national four-month benchmark and comfortably within regional convergence norms.
Gross Official Foreign Exchange Reserves & Import Cover
USD Millions (bars) and Months of Import Cover (line), Fiscal Years 2018–2026
Table 4: Gross Official Reserves & Import Cover
Period
2018
2019
2020
2021
2022
2023
2024
2025
2026 (Jun, p)
Gross reserves (USD Millions)
5,044.6
5,567.6
4,767.7
6,386.0
5,177.2
5,450.1
5,546.9
6,329.0
5,673.5
Import cover (months)
4.9
6.4
5.6
6.6
4.7
4.5
4.5
4.9
4.4
Source: Bank of Tanzania, Table A1 and Table 2.8.1, BOT Monthly Economic Review, July 2026.
08
What This Means for Investors & Policy
Tourism is doing the heavy lifting
At 54.1 percent of services receipts and rising, tourism is now Tanzania's single most important services export — infrastructure and marketing investment here has outsized returns.
Freight costs are an external risk to watch
Transport payments track global shipping cycles outside Tanzania's control; a renewed spike in freight rates would widen the services and current account deficits further.
Reserves buffer remains adequate
4.4 months of import cover gives policymakers room to manage shocks, though the buffer has thinned slightly from 4.9 months in the prior fiscal year.
Goods trade deficit is the structural issue
With the goods account deficit driving the entire current account widening, diversifying and adding value to merchandise exports remains the highest-leverage policy lever.
Export diversification beyond gold
While gold dominates goods exports, manufactured goods, tobacco, cashew nuts and coffee are all growing — a base worth building on for resilience against gold price cycles.
Services surplus is a genuine cushion
A services trade surplus of roughly USD 4.8 billion offsets nearly half the goods deficit — underscoring why tourism and transport/logistics policy matter for macro stability, not just sector growth.
Continue Exploring TICGL Economic Research
Go deeper into Tanzania's debt position, macroeconomic outlook, investment climate and data tools with these related resources from TICGL.
Nakisi ya akaunti ya sasa ya Tanzania iliongezeka hadi Dola za Kimarekani milioni 2,303.9 katika mwaka uliomalizika Juni 2026, kutoka Dola milioni 2,153.4 mwaka uliopita, sawa na ongezeko la asilimia 7.0, kutokana na uagizaji bidhaa kukua kwa kasi zaidi ya usafirishaji nje.
Mapato ya huduma (services receipts): yaliongezeka kwa asilimia 14.4 hadi Dola milioni 8,140.9, likiongozwa na utalii (Travel) — asilimia 54.1 ya mapato yote ya huduma — na usafirishaji (Transport) — asilimia 39.7.
Malipo ya huduma (services payments): yaliongezeka kwa asilimia 6.7 hadi Dola milioni 3,375.3, hasa kutokana na gharama kubwa za usafirishaji wa mizigo (freight) kufuatia bei za juu za usafirishaji duniani.
Bidhaa (goods): Usafirishaji nje uliongezeka asilimia 19.2 hadi Dola milioni 11,782.7 (dhahabu ikiongoza), huku uagizaji ukiongezeka asilimia 20.6 hadi Dola milioni 17,440.4.
Akiba ya fedha za kigeni: Dola milioni 5,673.5 mwishoni mwa Juni 2026, sawa na miezi 4.4 ya uagizaji bidhaa nje — juu ya kiwango cha chini cha miezi minne kinachohitajika.
Tanzania Shilling vs Inflation Rates: TICGL Analysis (BOT July 2026)
TICGL Economic · Currency & Price Stability Brief
Tanzania Shilling vs Inflation Rates: A TICGL Analysis
Headline inflation climbed to 4.0 percent in June 2026 while the shilling barely moved (0.08% annual depreciation). If the currency is stable, what is actually driving inflation? TICGL traces the transmission channel — from global oil prices, through fuel and transport costs, into core inflation and the Bank of Tanzania's policy response — using the Monthly Economic Review, July 2026.
Source document: Bank of Tanzania, Monthly Economic Review, July 2026Reporting period: Monthly CPI & FX data to June 2026; series from January 2023Prepared by: TICGL Research & Policy Analysis
Executive Summary
Tanzania's headline inflation eased slightly to 4.0 percent in June 2026, from 4.2 percent in May, remaining inside the national 3–5 percent target band but still well above the 3.3 percent recorded a year earlier. At first glance this looks like a currency story — inflation normally rises when a currency weakens and imports become more expensive. But the shilling depreciated by only 0.08 percent on an annual basis to June 2026, among the most stable currency performances in the region over the period. The real driver is different: a global oil price shock tied to the Middle East conflict pushed crude oil from roughly USD 63.7/barrel in January 2026 to USD 103.9/barrel by April 2026 (+63%), feeding directly into Tanzania's energy, fuel and transport costs largely independent of the exchange rate.
The result is a clear split in the inflation data: transport inflation surged to 13.6 percent year-on-year in June 2026 (from 1.6% a year earlier) and energy, fuel and utilities inflation reached 6.3 percent, while food inflation actually fell to 4.1 percent (from 7.3% a year earlier) as the domestic harvest improved supply. Crucially, core inflation — which strips out volatile food and energy — rose to 3.7 percent, its highest level in two years, and became the single largest contributor to headline inflation (2.7 percentage points), signalling that the oil shock has started spreading into second-round price effects across the wider economy. This is precisely why the Monetary Policy Committee raised the Central Bank Rate from 5.75 percent to 6.25 percent effective 2 July 2026 — not to defend an already-stable currency, but to stop a supply shock from becoming an entrenched, broad-based inflation problem.
↗
Related TICGL Deep-Dive: What's Next for Tanzania's Economy?
Price stability, exchange-rate management and monetary credibility are foundational to the long-run growth story TICGL examines in our flagship policy research on closing the gaps between Tanzania's current trajectory and a US$1 trillion economy by 2050.
1. Currency vs Inflation: Tracing the Transmission Channel
Plotting the shilling's monthly path against headline inflation over the same window shows the two series moving largely independently of one another. The shilling weakened modestly from January 2026 (TZS 2,518.1) to June 2026 (TZS 2,623.5) — a gentle, gradual slide — while headline inflation moved more sharply, jumping from 3.2 percent in March 2026 to 4.2 percent by May 2026 before easing slightly to 4.0 percent in June. The inflation jump happened faster and earlier than the currency move, which is the first sign that something other than the exchange rate was the primary driver.
Chart 1 · TZS/USD Exchange Rate vs Headline Inflation, June 2025–June 2026
Left axis: TZS per USD (end of period). Right axis: headline inflation (%, y/y). Source: Bank of Tanzania, National Bureau of Statistics (Tables A10, A9(i)).
TICGL Reading: A Stable Currency Cushioned, Rather Than Caused, the Inflation Uptick
BOT's own policy commentary attributes part of the reason the Central Bank Rate could stay at 5.75 percent through Q2 2026 to the shilling's stability limiting the pass-through of external price pressures into domestic prices. In other words, the currency did the opposite of amplifying inflation this cycle — it dampened what would otherwise have been a larger imported-inflation shock. Had the shilling depreciated at anywhere near its 2023–2024 pace (when the annual-average rate jumped 9.0% in a single year), the same global oil shock would likely have pushed headline inflation well above the 5 percent ceiling rather than keeping it inside the target band.
2. The Real Driver: Global Oil Prices & Energy Inflation
The clearest evidence that global commodity prices — not the shilling — are driving Tanzania's recent inflation uptick comes from lining up crude oil prices against domestic energy, fuel and utilities inflation. Global crude oil (average of Brent, Dubai and WTI) rose from USD 60.9 per barrel in December 2025 to a peak of USD 103.9 per barrel in April 2026 as the Middle East conflict intensified, before correcting to USD 81.7 by June 2026 following a ceasefire near the Strait of Hormuz. Tanzania's domestic energy, fuel and utilities inflation tracked this pattern with a short lag, rising from 2.1 percent in June 2025 to 6.3 percent in June 2026, with retail pump prices for petrol, diesel and kerosene reported as "persistently high" through the second quarter of 2026.
Chart 2 · Global Crude Oil Price vs Tanzania Energy/Fuel/Utilities Inflation, June 2024–June 2026
Left axis: crude oil price, USD per barrel (average of Brent, Dubai, WTI). Right axis: energy/fuel/utilities inflation (%, y/y). Source: World Bank Commodity Price data (Table A8); National Bureau of Statistics (Table A9(ii)).
TICGL Reading: An Imported Shock That Bypassed the Currency Channel
The April 2026 oil spike (+63% from January) is the single clearest cause of the current inflation episode — this was a global commodity event, not a Tanzania-specific currency event.
Energy inflation lags the oil price by roughly one to two months, consistent with retail pump-price adjustment cycles and fuel-subsidy smoothing — the government provided fuel subsidies in May and June 2026 that absorbed part of the initial price increase, an example of fiscal policy complementing monetary policy.
The June 2026 correction in oil prices (−20.6% m/m for Brent) should feed through to lower energy inflation prints in the coming months if sustained — a disinflationary tailwind heading into Q3 2026, independent of anything the shilling does.
3. Headline vs Core vs Non-Core Inflation, 2024–2026
Decomposing headline inflation into its core (underlying) and non-core (food and energy) components over a longer window shows how the composition of Tanzania's inflation has shifted. Through most of 2024 and 2025, non-core inflation (largely food-driven) ran well above core inflation, peaking near 7.3 percent in mid-2025. By mid-2026 the pattern has essentially inverted: non-core inflation has fallen back to 4.8 percent as the harvest eased food prices, while core inflation has climbed to 3.7 percent — its highest reading in the entire 2024–2026 series.
Source: National Bureau of Statistics, Tables A9(i) & A9(ii).
TICGL Reading: The Inflation Story Has Changed Character
This is arguably the most important structural signal in the whole dataset: Tanzania's inflation problem is no longer primarily a food-price problem (which is typically weather- and harvest-driven and self-correcting) — it is becoming a broader, imported cost-push problem (oil, transport, and now spreading into services and other goods). That shift is exactly what justifies a monetary policy response rather than simply waiting out the next harvest cycle, and it is why the MPC's July 2026 rate decision explicitly cites core inflation's rise as the trigger.
4. What's Actually Driving Headline Inflation?
Breaking the 4.0 percent June 2026 headline figure into its component contributions confirms the shift: core inflation alone contributed 2.7 percentage points of the 4.0 percent headline rate — by far the largest share, and the highest core contribution in the past two years. Unprocessed food contributed only 0.9 percentage points (down sharply from 2.6 points in May), while energy contributed a modest 0.4 percentage points.
Chart 4 · Contribution to Headline Inflation by Component, June 2025–June 2026 (Percentage Points)
Stacked bars sum to headline inflation for each month. Source: National Bureau of Statistics & BOT computations (Chart 2.2.5).
Table 1 · Contribution to Headline Inflation (Percentage Points)
Month
Unprocessed Food
Energy
Core
Headline Total
Jun-25
1.7
0.1
1.5
3.3
Sep-25
1.6
0.2
1.6
3.4
Dec-25
1.5
0.3
1.9
3.6
Mar-26
1.3
0.1
1.7
3.2
Apr-26
1.4
0.3
2.4
4.0
May-26
1.3
0.3
2.6
4.2
Jun-26
0.9
0.4
2.7
4.0
5. Inflation by Category: Import-Sensitive vs Domestically-Driven
Categorising the CPI's main groups by how directly they are exposed to imported costs (fuel, transport, energy) versus domestic supply conditions (food, local services) makes the pattern explicit.
Table 2 · Annual Inflation by Category (%, y/y), June 2025 vs May 2026 vs June 2026
Category
Jun-25
May-26
Jun-26
Exposure
Transport
1.6%
11.9%
13.6%
Import-sensitive (fuel-linked)
Energy, fuel & utilities
2.1%
5.0%
6.3%
Import-sensitive (fuel-linked)
Housing, water, electricity, gas & other fuels
1.7%
0.7%
1.2%
Partly import-sensitive
Personal care, social protection & misc.
2.0%
3.5%
3.6%
Mixed / services
Restaurants & accommodation services
1.3%
1.9%
1.9%
Domestic services
Clothing and footwear
2.0%
1.5%
1.3%
Partly import-sensitive
Food and non-alcoholic beverages
7.3%
5.6%
4.1%
Domestically-driven (harvest)
Alcoholic beverages and tobacco
3.5%
2.1%
1.9%
Domestic
Health
1.8%
1.4%
1.3%
Domestic / regulated
Information and communication
0.0%
0.9%
0.9%
Domestic
Source: National Bureau of Statistics & Bank of Tanzania (Table 2.2.1). Exposure classification is TICGL's own assessment.
TICGL Reading: A Two-Speed Inflation Picture
Import-sensitive categories (transport, energy) are running at 6–14 percent, while domestically-driven categories (food, alcoholic beverages, health) have actually decelerated to 1–4 percent. This split matters for business planning: firms with fuel-heavy logistics or transport-dependent supply chains are facing materially higher cost inflation than the 4.0 percent headline number suggests, while food and beverage retailers are seeing genuine disinflation.
6. The Monetary Policy Response & Real Interest Rates
The MPC held the CBR at 5.75 percent through Q2 2026, judging the initial oil-price shock to be a temporary, first-round supply effect that tighter policy could not meaningfully offset without needlessly damaging growth. But the rise in core inflation from 2.2 percent (March 2026) to 3.7 percent (June 2026) — evidence of second-round effects spreading into the broader basket of goods and services — triggered a 50-basis-point hike to 6.25 percent for Q3 2026, announced 2 July 2026. Because inflation itself eased slightly to 4.0 percent in the same month, the policy move modestly widened Tanzania's real (inflation-adjusted) interest rate.
Chart 5 · Nominal vs Real Interest Rates, June 2026
Real rate = nominal rate − headline inflation (4.0%, June 2026). Source: Bank of Tanzania (Tables A4, 2.2.1); TICGL computations.
Table 3 · Nominal & Real Interest Rates, June 2026
Rate
Nominal (%)
Headline Inflation (%)
Real Rate (%)
Central Bank Rate (from 2 Jul 2026)
6.25
4.0
+2.25
Overall time deposit rate
8.60
4.0
+4.60
Overall lending rate
15.20
4.0
+11.20
91-day Treasury bill rate
3.56
4.0
−0.44
TICGL Reading: Positive Real Rates Support the Currency, Closing the Loop
With real deposit and lending rates comfortably positive, Tanzania offers savers a genuine inflation-adjusted return — a factor that supports demand for shilling-denominated assets and, in turn, reinforces exchange-rate stability. This closes the loop described in this analysis: a stable currency limited imported inflation from the oil shock; the resulting moderate inflation print allowed the MPC to raise rates only modestly (50bps) rather than aggressively; and the resulting positive real rates now help sustain the currency stability that started the cycle. The main exception is short-dated Treasury bills, where a slightly negative real yield (91-day T-bill at 3.56% against 4.0% inflation) may need to adjust upward to keep short-term government paper attractive to investors.
7. TICGL Assessment & Outlook
Key Takeaways
The shilling is not the story — global oil prices are. With only 0.08% annual depreciation, currency pass-through explains very little of the 2026 inflation uptick; the Middle East-driven oil shock (+63% Jan–Apr 2026) is the dominant factor.
But currency stability is doing quiet, valuable work. Had the shilling been as volatile as in 2023–2024, the same global shock would likely have pushed headline inflation above the 5% ceiling rather than keeping it inside the target band.
The character of inflation has shifted from food to core/imported costs — a structurally more persistent and harder-to-manage form of inflation than the harvest-driven food inflation of 2024–2025, and the direct justification for the July 2026 rate hike.
Businesses face a two-speed cost environment: transport and energy-intensive operations are seeing double-digit cost inflation even as headline CPI sits at 4%, while food and beverage-linked businesses are experiencing genuine disinflation.
The June 2026 oil price correction (−20.6% m/m for Brent) is a disinflationary signal to watch — if sustained, it should ease energy and transport inflation over Q3 2026, potentially giving the MPC room to pause further tightening.
This inflation-and-currency analysis complements TICGL's companion reviews of Tanzania's government budget performance and the shilling's relationship with national debt for the same reporting period — together they form a fuller picture of the macro-fiscal-monetary policy mix currently in play.
Related TICGL Research & Resources
Continue exploring Tanzania's economic and investment landscape with TICGL's research platform, dashboards and advisory programmes.
Mfumuko wa bei (inflation) nchini Tanzania ulipanda hadi asilimia 4.0 mwezi Juni 2026, ukibaki ndani ya lengo la kitaifa la asilimia 3–5, lakini juu zaidi ya asilimia 3.3 iliyorekodiwa mwaka mmoja uliopita. Hata hivyo, shilingi ya Tanzania imeendelea kubaki tulivu sana, ikishuka thamani kwa asilimia 0.08 tu kwa mwaka. Hii inaonesha wazi kwamba chanzo kikuu cha ongezeko la mfumuko wa bei si udhaifu wa shilingi, bali ni kupanda kwa bei za mafuta duniani kutokana na mzozo wa Mashariki ya Kati — bei ya mafuta ghafi iliongezeka kwa zaidi ya asilimia 63 kati ya Januari na Aprili 2026.
Athari za bei za mafuta zimeonekana wazi kwenye gharama za usafiri, ambazo ziliongezeka kwa kasi kubwa hadi asilimia 13.6 mwezi Juni 2026 (kutoka asilimia 1.6 mwaka uliopita), na mfumuko wa bei za nishati na mafuta uliofikia asilimia 6.3. Wakati huo huo, mfumuko wa bei za chakula ulipungua hadi asilimia 4.1 kutokana na mavuno mazuri. Jambo muhimu zaidi ni kwamba "core inflation" (mfumuko wa bei usiojumuisha chakula na nishati) uliongezeka hadi asilimia 3.7, kiwango cha juu zaidi katika miaka miwili, ikionesha kuwa athari za mshtuko wa mafuta zimeanza kuenea kwenye bidhaa na huduma nyingine. Hii ndiyo sababu kuu iliyopelekea Kamati ya Sera za Fedha (MPC) kupandisha Kiwango cha Riba cha Benki Kuu (CBR) kutoka asilimia 5.75 hadi asilimia 6.25 kuanzia tarehe 2 Julai 2026.
Tanzania Shilling Stability vs National Debt: A TICGL Analysis
The Tanzanian shilling has been remarkably stable — but a rising national debt stock, still two-thirds denominated in US dollars, means that stability is doing more structural work than the headline numbers suggest. TICGL examines the exchange rate, the debt stock, and the currency exposure sitting between them, using the Bank of Tanzania's Monthly Economic Review, July 2026.
Source document: Bank of Tanzania, Monthly Economic Review, July 2026Reporting period: Monthly data to June 2026; annual series 2018–2025Prepared by: TICGL Research & Policy Analysis
Executive Summary
The Tanzanian shilling depreciated by just 0.08 percent on an annual basis in the year to June 2026 — nearly half the 0.21 percent depreciation recorded a year earlier — making it one of the more stable currencies among peer economies over the period. The shilling traded at a monthly average of TZS 2,633.73 per US dollar in June 2026, up modestly from TZS 2,616.88 in May, after actually appreciating from TZS 2,604.6 (June 2025) to TZS 2,436.8 (November 2025) before drifting back up. This stability rests on strong gold export earnings (+36.7% y/y), resilient tourism receipts, and active Bank of Tanzania smoothing in the interbank foreign exchange market.
Set against that stability, Tanzania's national debt stock reached USD 50,595.8 million at end-June 2026 (+4.5% y/y), of which 70.4 percent is external. Crucially, 66.2 percent of external debt is denominated in US dollars — meaning the currency stability described above is not a peripheral detail but a direct determinant of how expensive Tanzania's debt is in local-currency terms. The debt mix is also shifting: domestic debt grew 10.8 percent year-on-year versus just 2.4 percent for external debt, a deliberate move that reduces exchange-rate risk on new borrowing but raises domestic financing costs and competes with private credit. Reserves cover of 4.4 months of imports — just above the four-month national benchmark — is the buffer holding this system together, and it is thinner than it looks once current-account and commodity-price risks are taken into account.
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Related TICGL Deep-Dive: What's Next for Tanzania's Economy?
Currency stability and debt sustainability are two of the structural pillars TICGL examines in our flagship policy research on the gaps standing between Tanzania's current trajectory and a US$1 trillion economy by 2050 — including how FX-denominated debt and reserve buffers interact with long-run growth policy.
The interbank foreign exchange market (IFEM) was broadly stable in June 2026, with turnover rising to USD 193.3 million from USD 119.3 million in May, as the Bank of Tanzania made a net sale of USD 28.5 million to smooth volatility, consistent with its intervention policy. Rather than a straight-line depreciation, the monthly end-period data show the shilling actually strengthening through much of late 2025 before giving some of that back into mid-2026 — a shallow U-shaped path rather than sustained weakening.
Chart 1 · TZS/USD End-of-Period Exchange Rate, June 2025–June 2026
Source: Ministry of Finance & Bank of Tanzania (Table A10). Lower value = stronger shilling.
Table 1 · Exchange Rate Developments, June 2025–June 2026
Period
TZS/USD (end of period)
Month-on-month change
Jun-25
2,604.6
—
Jul-25
2,545.8
−2.26% (appreciation)
Aug-25
2,463.3
−3.24% (appreciation)
Sep-25
2,442.8
−0.83% (appreciation)
Oct-25
2,451.6
+0.36%
Nov-25
2,436.8
−0.60% (appreciation)
Dec-25
2,447.5
+0.44%
Jan-26
2,518.1
+2.88%
Feb-26
2,542.5
+0.97%
Mar-26
2,577.4
+1.37%
Apr-26
2,602.0
+0.95%
May-26
2,609.2
+0.28%
Jun-26
2,623.5
+0.55%
Source: Ministry of Finance & Bank of Tanzania (Table A10), TICGL computations.
TICGL Reading: A Managed, Not Purely Market-Driven, Stability
The appreciation phase (Jul–Nov 2025) coincides with peak gold-export strength and the ramp-up of the domestic gold purchase programme, suggesting FX supply from minerals was the dominant driver rather than portfolio flows.
The re-depreciation from January 2026 onward tracks the period when global oil prices spiked on the Middle East conflict (Brent rose from USD 66.8 in Jan-26 to USD 120.4 in Apr-26 before correcting), consistent with higher import demand for fuel pressuring the currency.
BOT's net USD 28.5 million sale in June 2026 confirms the central bank is actively leaning against volatility rather than allowing a fully free float — a policy stance that supports predictability for debt servicing but requires reserves to be maintained.
2. National Debt Stock: Size & Composition
Tanzania's national debt stock — external plus domestic — reached USD 50,595.8 million at the end of June 2026, up 4.5 percent from USD 48,396.3 million a year earlier. External debt (USD 35,606.1 million) remains dominant at 70.4 percent of the total, but its growth rate (+2.4% y/y) is now running well below that of domestic debt (+10.8% y/y in USD-equivalent terms), signalling a gradual but clear shift in how the deficit is being financed.
Chart 2 · National Debt Stock Composition, June 2025–June 2026 (USD Million)
Source: Ministry of Finance & Bank of Tanzania (Table A10).
Table 2 · National Debt Stock by Component, June 2025–June 2026 (USD Million)
Period
External Debt
Domestic Debt
Total National Debt
External Share
Jun-25
34,765.3
13,631.1
48,396.3
71.8%
Sep-25
35,642.2
15,407.9
51,050.1
69.8%
Dec-25
35,528.8
15,485.0
51,013.8
69.6%
Mar-26
35,886.2
14,917.3
50,803.5
70.6%
May-26
35,553.3
15,045.7
50,599.0
70.3%
Jun-26
35,606.1
14,989.7
50,595.8
70.4%
Source: Ministry of Finance & Bank of Tanzania (Table A10). Domestic debt shown in USD-equivalent terms; the TZS-denominated stock (TZS 39,325.8bn at Jun-26) is not itself subject to direct exchange-rate revaluation risk.
3. Currency Exposure of External Debt
The single most important number linking currency stability to debt sustainability is the currency composition of external debt. As of June 2026, 66.2 percent of Tanzania's disbursed outstanding external debt was denominated in US dollars, followed by the Euro (17.4%), Chinese Yuan (6.7%), and other currencies (9.8%). This composition has been essentially unchanged for the past year (USD share was 66.0% in June 2025), meaning currency-mix diversification has not materially progressed even as absolute borrowing has grown.
Chart 3 · Currency Composition of External Debt, June 2026
Source: Ministry of Finance & Bank of Tanzania (Table 2.7.4 / A10).
Chart 4 · Interest Payments by Source, Jul’25–May’26 (TZS Billion)
Foreign interest is the FX-exposed share of total debt-service cost.
TICGL Reading: Concentration Risk Is Structural, Not Transitory
A one percentage-point move in the shilling against the dollar revalues roughly two-thirds of the entire external debt stock — around USD 23.6 billion of exposure at June 2026 levels — directly in TZS terms, even with zero new borrowing.
The Euro and Yuan shares are small but rising slightly (Yuan up from 6.4% to 6.7% y/y), reflecting the growing role of Chinese concessional and commercial financing in infrastructure projects — a diversification trend worth watching but not yet material to overall risk.
Multilateral creditors hold 59.3 percent of external debt by creditor type — typically offering longer maturities and lower rates than commercial debt (34.4% share), which is a mitigating factor against currency-driven repayment shocks even though it does not reduce the currency exposure itself.
4. The Stability–Debt Feedback Loop
Reserves are the buffer that lets Tanzania absorb currency shocks without triggering a debt crisis. Gross official reserves stood at USD 5,673.5 million at end-June 2026 — comfortably above the previous year's levels but providing only 4.4 months of import cover, just above the four-month national benchmark (and below the higher EAC/SADC regional benchmarks shown in the source review). External debt service paid in June 2026 alone was USD 249.2 million (USD 184.9m principal, USD 64.3m interest) — a reminder that reserves must simultaneously cover trade financing needs and debt-service obligations.
Table 4 · External Debt Service Flows & Reserves Snapshot, June 2026
TICGL Reading: A Thin but Currently Adequate Buffer
Foreign interest represents about 36% of total interest paid (TZS 1,782.6bn of TZS 5,007.9bn cumulative) — this is the portion of debt-service cost that rises automatically in TZS terms if the shilling weakens, independent of any change in fiscal policy.
The current account deficit widened 7.0% year-on-year (to USD 2,303.9m) on faster import growth (+18.1%) than export growth (+17.2%) — a trend that, if it continues, will draw down the same reserves that back both import cover and debt-service capacity.
The shift toward domestic borrowing (Section 2) is a rational hedge against this exposure: TZS-denominated debt does not carry direct currency-revaluation risk. But cumulative net domestic financing for FY2025/26 had already reached 122.5% of its full-year budget by May 2026 (see TICGL's companion budget analysis), meaning this hedge is being pursued more aggressively than originally planned — with knock-on effects on domestic bond yields (10-year yield rose to 10.39% in June 2026) and private-credit crowding-out risk.
5. Historical Context: 2018–2025
Viewed over the medium term, Tanzania's external debt stock has grown 69.5 percent since 2018 (USD 20,503.0m → USD 34,765.3m), while the shilling's annual-average exchange rate has depreciated a cumulative 12.1 percent over the same period (TZS 2,263.8 → TZS 2,537.6 per USD) — debt growth has significantly outpaced currency depreciation, which is a broadly reassuring signal for long-run debt sustainability, though the pace of both increased noticeably from 2023 onward.
Source: BOT Monthly Economic Review, July 2026 (Table A1), Ministry of Finance.
TICGL Reading: 2024 Was the Inflection Point
The annual-average exchange rate jumped from TZS 2,382.1 in 2023 to TZS 2,597.4 in 2024 (+9.0% in a single year) — by far the sharpest move in the eight-year series — before partially reversing to TZS 2,537.6 in 2025. External debt growth also accelerated over the same window. Import cover simultaneously dipped to its lowest points of the series (4.5 months in both 2023 and 2024) before recovering to 4.9 months in 2025. Read together, 2023–2024 was a period of genuine currency and reserve stress that the 2025–2026 data shows Tanzania has since stabilised out of — but the reserve buffer has not yet been rebuilt much beyond where it stood before that stress episode.
6. TICGL Assessment & Outlook
Key Takeaways
Currency stability is real, but partly engineered. Active BOT intervention (net USD sales) and strong gold-export inflows — not simply market equilibrium — are what has kept depreciation to 0.08% y/y. This is a policy achievement, but one that depends on gold prices and IFEM management capacity continuing to hold.
Two-thirds of external debt is a standing currency bet. With 66.2% of external debt in USD, any renewed depreciation episode (of the kind seen in 2023–2024) would mechanically raise TZS-denominated debt-service costs and the debt-to-GDP ratio, without any new borrowing decision being taken.
The domestic-financing shift is a rational but not costless hedge. Growing domestic debt 10.8% y/y (vs 2.4% for external debt) reduces FX exposure but is already running ahead of its FY2025/26 budget envelope, pushing up Treasury yields and raising crowding-out risk for private credit — a trade-off between currency risk and domestic financial-market risk, not a free reduction in overall risk.
Reserve buffers are adequate but thin. At 4.4 months of import cover — only marginally above the 4.0-month floor — Tanzania has limited room to absorb a simultaneous shock to gold prices, tourism receipts, and oil import costs without the shilling coming under renewed pressure.
Watch the CBR-yield-currency triangle through Q3 2026. The MPC's hike to 6.25% supports the shilling via higher real interest rates, but it simultaneously raises the cost of the domestic-borrowing-heavy financing strategy the government is now running — reinforcing why currency policy and debt policy cannot be assessed in isolation from one another.
This currency-and-debt analysis complements TICGL's parallel review of central government revenue and expenditure performance for the same period — read it alongside our broader research on structural policy gaps in Tanzania's growth model.
Related TICGL Research & Resources
Continue exploring Tanzania's economic and investment landscape with TICGL's research platform, dashboards and advisory programmes.
Shilingi ya Tanzania imeendelea kubaki tulivu sana, ikishuka thamani kwa asilimia 0.08 tu kwa mwaka hadi Juni 2026, ikilinganishwa na asilimia 0.21 mwaka uliopita. Uthabiti huu unasaidiwa na mapato imara ya dhahabu (yaliyokua kwa asilimia 36.7), utalii, na uingiliaji kati wa Benki Kuu ya Tanzania (BOT) katika soko la fedha za kigeni — ikiwemo mauzo halisi ya dola milioni 28.5 mwezi Juni 2026 kudhibiti mabadiliko ya thamani.
Hata hivyo, deni la taifa (la ndani na nje) limefikia dola za Marekani milioni 50,595.8 ifikapo Juni 2026, huku asilimia 66.2 ya deni la nje likiwa katika dola za Marekani. Hii ina maana kwamba uthabiti wa shilingi ni muhimu sana katika kudhibiti gharama za ulipaji deni kwa fedha za Kitanzania — mabadiliko madogo ya thamani ya shilingi yanaweza kuongeza gharama za deni bila hata mkopo mpya kuchukuliwa. Akiba ya fedha za kigeni (miezi 4.4 ya uagizaji bidhaa) ipo juu kidogo ya kiwango cha chini kinachokubalika (miezi 4), hivyo bado kuna nafasi finyu ya kuhimili mshtuko wa ghafla kwenye bei za dhahabu au mapato ya utalii.
Wakati huo huo, Serikali imeendelea kuongeza matumizi ya mikopo ya ndani (iliyokua kwa asilimia 10.8 kwa mwaka) kuliko mikopo ya nje (asilimia 2.4), hatua inayopunguza hatari ya fedha za kigeni lakini inayoongeza shinikizo kwenye viwango vya riba vya ndani na inaweza kuathiri upatikanaji wa mikopo kwa sekta binafsi. TICGL inashauri wadau kufuatilia kwa karibu uwiano huu kati ya uthabiti wa shilingi na mwelekeo wa deni la taifa, hasa katika muktadha wa malengo ya muda mrefu ya kiuchumi ya Tanzania. Soma zaidi: What's Next for Tanzania's Economy? The Policy Gaps Keeping $1 Trillion Out of Reach by 2050.
Tanzania Government Budget July 2026: Central Government Revenue & Expenditure Analysis | TICGL
TICGL Economic · Fiscal Policy Brief
Tanzania Government Budget, July 2026: Central Government Revenue & Expenditure Analysis
A full TICGL breakdown of the Bank of Tanzania's Monthly Economic Review (July 2026 issue), with primary focus on Tanzania's central government budgetary operations — revenue performance, expenditure execution, the fiscal deficit and how it is financed — alongside the wider macroeconomic picture: GDP, inflation, monetary policy, debt and the external sector.
Source document: Bank of Tanzania, Monthly Economic Review, July 2026Reporting period: Cheques-issued data to May 2026; other indicators to June 2026Prepared by: TICGL Research & Policy Analysis
Executive Summary
The Bank of Tanzania's (BOT) Monthly Economic Review for July 2026 confirms that Tanzania's economy kept its growth momentum into the second quarter of 2026, even as global energy prices remained volatile because of the Middle East conflict. Real GDP grew 6.0 percent in Q1 2026 (up from 4.3 percent a year earlier), headline inflation edged up to 4.0 percent in June 2026 — still inside the 3–5 percent national target band — and the Monetary Policy Committee (MPC) raised the Central Bank Rate from 5.75 percent to 6.25 percent for Q3 2026 to pre-empt second-round inflation effects from the global supply shock.
On the fiscal side — the focus of this brief — central government revenue collection continued to outperform target: TZS 3,152.4 billion was collected in May 2026 against a target of TZS 3,109.9 billion (101.4%), lifting cumulative July 2025–May 2026 collection to TZS 36,447.2 billion, already 98.9 percent of the entire FY2025/26 annual revenue budget with one month still to go. Tax revenue outperformance was driven overwhelmingly by income tax (+32.9% above monthly target), while VAT/excise on local goods undershot target by roughly 35 percent. On the spending side, total expenditure execution lagged — May 2026 spending of TZS 4,018.4 billion was only 86.4 percent of the monthly estimate, with development expenditure executed at just 60.4 percent of its May target (and 81.8% of the full-year development budget with one month left), while recurrent spending — particularly "other goods, services and transfers" — ran ahead of plan. The resulting May 2026 fiscal deficit of TZS 418.3 billion was financed almost entirely by domestic borrowing (TZS 376.5bn), and cumulative net domestic financing for the fiscal year to May (TZS 3,617.0bn) had already exceeded the full annual domestic borrowing budget (TZS 2,952.6bn) — a fiscal financing pattern investors and researchers should watch closely.
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Related TICGL Deep-Dive: What's Next for Tanzania's Economy?
The revenue-overperformance / expenditure-underexecution / domestic-borrowing pattern seen in this month's budget data sits at the heart of a bigger structural question TICGL has examined in detail: can Tanzania close the policy gaps standing between today's economy and a US$1 trillion economy by 2050? Read our full policy analysis.
Central Government Budgetary Operations: Full Deep-Dive
The BOT review's Government Budgetary Operations section (based on cheques-issued data compiled by the Ministry of Finance) is the richest fiscal dataset in the July 2026 issue. TICGL has restructured it below into revenue, expenditure, balance and financing views, each compared against the FY2025/26 annual budget, the cumulative July 2025–May 2026 outturn, and the May 2026 monthly outturn.
Tanzania MainlandCheques-Issued BasisFY2025/26 BudgetMinistry of Finance / BOT
1. Revenue Performance: Target vs Actual
Total government revenue (including Local Government Authority own sources) reached TZS 3,259.4 billion in May 2026, 0.5 percent above the monthly target. Central government revenue alone — TZS 3,152.4 billion — represented 96.7 percent of total revenue collected and exceeded its own monthly target by 1.4 percent. Tax revenue performance was strong (+5.2% above target), propelled by income tax, which beat its monthly target by a striking 32.9 percent, reflecting improvements in tax administration and compliance. Sales/VAT and excise duties on local goods, however, undershot target by close to 35 percent, and non-tax revenue collection reached only 81.4 percent of target.
Table 1 · Central Government Revenue Performance — FY2025/26 Budget vs Jul’25–May’26 vs May 2026 (TZS Billion)
Revenue Item
FY2025/26 Budget
Jul–May Estimate
Jul–May Actual
Jul–May Achv.
May Estimate
May Actual
May Achv.
Total revenue (incl. LGAs)
40,466.1
36,046.4
37,907.7
105.2%
3,241.9
3,259.4
100.5%
Central government revenue
36,857.7
34,512.1
36,447.2
105.6%
3,109.9
3,152.4
101.4%
Tax revenue
32,176.0
28,856.2
31,478.1
109.1%
2,615.2
2,750.0
105.2%
Taxes on imports
11,563.0
10,567.3
11,394.2
107.8%
964.3
1,122.6
116.4%
Sales/VAT & excise, local goods
7,016.5
6,331.9
5,876.8
92.8%
739.2
481.5
65.1%
Income taxes
11,367.9
9,832.2
12,118.2
123.3%
718.6
954.9
132.9%
Other taxes
4,887.7
2,124.8
2,088.9
98.3%
193.0
191.0
99.0%
Non-tax revenue
4,681.7
5,655.9
4,969.1
87.9%
494.7
402.5
81.4%
LGA own sources
1,680.5
1,534.4
1,460.5
95.2%
132.0
107.0
81.0%
Source: Ministry of Finance and Bank of Tanzania (Table A2), TICGL computations. Achievement = Actual ÷ Estimate.
Chart 1 · May 2026 Central Government Revenue — Actual vs Target vs Prior Year (TZS Billion)
Income tax is doing the heavy lifting. At 132.9% of the May target, income tax growth (reflecting improved TRA administration and compliance) is now the single most important swing factor in Tanzania's revenue outperformance.
Consumption-tax weakness is a watch item. VAT and excise on local goods collecting only 65.1% of the May target — even as headline economic activity accelerated to 6.0% GDP growth — suggests either compliance leakage in the domestic VAT chain or a shift in the composition of growth away from VAT-heavy consumption sectors.
Import taxes are rising with trade volumes. Taxes on imports beat target by 16.4%, consistent with the 20.6% year-on-year rise in goods imports reported in the external sector data (see below) — but this also signals rising import dependence.
2. Expenditure Performance: Target vs Actual
Total government expenditure of TZS 4,018.4 billion in May 2026 was well below the TZS 4,653.4 billion monthly estimate (86.4%), driven by a sharp shortfall in development spending. Development expenditure and net lending reached only TZS 1,137.7 billion against a target of TZS 1,883.2 billion (60.4%), with both local (63.4%) and foreign-financed (54.8%) components underspent. Recurrent expenditure, by contrast, exceeded target (104.0%), with "other goods, services and transfers" running 46.6% above its monthly plan, while interest payments came in well under budget (47.3% of target) — a favourable outcome for debt-service costs this month.
Table 2 · Central Government Expenditure Performance — FY2025/26 Budget vs Jul’25–May’26 vs May 2026 (TZS Billion)
Expenditure Item
FY2025/26 Budget
Jul–May Estimate
Jul–May Actual
Jul–May Achv.
May Estimate
May Actual
May Achv.
Total expenditure
48,775.0
45,056.3
42,810.4
95.0%
4,653.4
4,018.4
86.4%
Recurrent expenditure
31,281.3
28,364.2
28,505.8
100.5%
2,770.2
2,880.7
104.0%
Wages and salaries
10,917.5
12,001.8
12,116.2
101.0%
1,111.8
1,139.3
102.5%
Interest payments
6,493.7
6,294.9
5,007.9
79.6%
694.5
328.3
47.3%
Domestic interest
3,697.3
3,524.3
3,225.3
91.5%
356.3
202.8
56.9%
Foreign interest
2,796.4
2,770.6
1,782.6
64.3%
338.1
125.5
37.1%
Other goods, services & transfers
7,088.6
10,067.6
11,381.7
113.1%
963.9
1,413.1
146.6%
Development expenditure & net lending
17,493.7
16,692.1
14,304.6
85.7%
1,883.2
1,137.7
60.4%
Local
12,117.8
11,294.7
10,971.8
97.1%
1,228.3
778.7
63.4%
Foreign
5,375.9
5,397.4
3,332.9
61.7%
654.9
359.0
54.8%
Source: Ministry of Finance and Bank of Tanzania (Table A2), TICGL computations.
Chart 2 · May 2026 Central Government Expenditure — Actual vs Estimate vs Prior Year (TZS Billion)
Development spending is the main execution risk. With only 81.8% of the full-year development budget disbursed through 11 months of the fiscal year (see execution-pace table below), infrastructure and capital-project contractors, EPC firms and PPP concessionaires should expect either a Q4 disbursement surge or a real risk of rolled-over commitments into FY2026/27.
Recurrent spending discipline has loosened. "Other goods, services and transfers" running 46.6% above the May target is the largest single expenditure overshoot in the dataset and merits monitoring in subsequent BOT reviews.
Debt service relief this month. Interest payments at under half of target reduced fiscal pressure in May, but this is a timing effect rather than a change in Tanzania's underlying debt-service obligations (see Domestic Debt section).
3. Fiscal Balance & Deficit Financing
Because expenditure underperformed by more than revenue outperformed, the balance before grants actually swung to a small surplus of TZS 86.5 billion in May 2026, against a planned deficit of TZS 1,411.4 billion. After grants of TZS 84.4 billion, the government still recorded an overall fiscal deficit of TZS 418.3 billion for the month (smaller than the TZS 1,333.8 billion planned), which was financed almost entirely by net domestic borrowing.
Table 3 · Fiscal Balance & Financing — FY2025/26 Budget vs Jul’25–May’26 vs May 2026 (TZS Billion)
Item
FY2025/26 Budget
Jul–May Estimate
Jul–May Actual
May Estimate
May Actual
Balance before grants
−8,308.9
−9,009.9
−4,902.7
−1,411.4
+86.5
Grants received
1,069.9
863.9
798.9
77.7
84.4
Balance after grants
−6,401.2
−8,146.0
−4,103.8
−1,333.8
−672.5
Overall balance
−7,239.0
−8,146.0
−5,623.2
−1,333.8
−418.3
Total financing
7,239.0
8,146.0
5,623.2
1,333.8
418.3
Net foreign financing
4,286.3
4,630.8
2,006.2
816.8
41.9
Net domestic financing
2,952.6
3,515.2
3,617.0
517.0
376.5
Source: Ministry of Finance and Bank of Tanzania (Table A2), TICGL computations.
Chart 3 · May 2026 Deficit Financing Mix
Domestic borrowing funded ~90% of the May 2026 deficit.
Chart 4 · Cumulative Jul’25–May’26 Execution vs Full-Year Budget (%)
Share of the FY2025/26 annual budget already realised after 11 of 12 months.
4. Full-Year Budget Execution Pace (FY2025/26)
With 11 of 12 months of FY2025/26 elapsed by the end of May 2026 (91.7% of the fiscal year), comparing cumulative actuals to the full-year budget shows where execution is running ahead of, or behind, the annual plan.
Table 4 · Share of FY2025/26 Annual Budget Realised by End-May 2026
Item
FY2025/26 Budget (TZS bn)
Jul–May Actual (TZS bn)
% of Annual Budget Realised
Assessment
Total revenue (incl. LGAs)
40,466.1
37,907.7
93.7%
Ahead of the 91.7% pace benchmark
Central government revenue
36,857.7
36,447.2
98.9%
Strongly ahead of pace
Tax revenue
32,176.0
31,478.1
97.8%
Strongly ahead of pace
Total expenditure
48,775.0
42,810.4
87.8%
Behind the 91.7% pace benchmark
Recurrent expenditure
31,281.3
28,505.8
91.1%
Broadly on pace
Development expenditure
17,493.7
14,304.6
81.8%
Materially behind pace — key risk area
Overall fiscal deficit
7,239.0
5,623.2
77.7%
Deficit smaller than annual plan so far
Net domestic financing
2,952.6
3,617.0
122.5%
Already exceeds the full-year domestic borrowing ceiling
TICGL computations from Table A2 (BOT Monthly Economic Review, July 2026). Pace benchmark = 11/12 months = 91.7%.
TICGL Flag: Domestic Borrowing Has Already Exceeded the Annual Budget
The most significant fiscal signal in this month's data: cumulative net domestic financing of TZS 3,617.0 billion for July 2025–May 2026 already stands at 122.5 percent of the entire FY2025/26 domestic borrowing budget (TZS 2,952.6bn) — with a full month of the fiscal year still remaining. This has direct implications for domestic liquidity, the government securities market (Treasury bill and bond yields were already edging up in June 2026 — see below), and crowding-out risk for private-sector credit, even as private credit growth accelerated to 28.1 percent year-on-year.
5. Domestic Debt: The Financing Counterpart
Government domestic debt stock reached TZS 39,325.8 billion at end-June 2026, up marginally from TZS 39,257.3 billion in May, and more than tripling from TZS 13,228.2 billion a decade earlier (June 2018). The overdraft facility with the Bank of Tanzania and Treasury bonds remain the dominant instruments; commercial banks and pension funds remain the government's largest domestic creditors.
Chart 5 · Government Domestic Debt Stock, June 2018–June 2026 (TZS Billion)
Source: Ministry of Finance, BOT Monthly Economic Review, July 2026 (Chart 2.7.1).
Table 5a · Domestic Debt by Instrument, June 2026 (TZS Billion)
Instrument
Jun-26
Share
Government bonds
31,421.2
79.9%
Treasury bills
1,757.5
4.5%
Government stocks
135.7
0.3%
Overdraft (non-securitized)
6,011.4
15.3%
Total domestic debt stock
39,325.8
100.0%
Table 5b · Domestic Debt by Creditor, June 2026 (TZS Billion)
Creditor
Jun-26
Share
Commercial banks
11,320.8
28.8%
Pension funds
10,399.0
26.4%
Bank of Tanzania
7,197.1
18.3%
Others (incl. public, private, non-residents)
7,547.4
19.2%
Insurance
2,022.8
5.1%
BOT special funds
838.6
2.1%
Total domestic debt stock
39,325.8
100.0%
Government securities auctions were oversubscribed in June 2026: Treasury bills attracted bids of TZS 1,295.9bn against a TZS 552.1bn tender (weighted average yield up to 4.83% from 4.74%), while 10- and 25-year Treasury bonds attracted TZS 1,539.6bn in bids against a TZS 387.6bn tender (10-year yield rising 0.99 percentage points to 10.39%).
6. Zanzibar Government Budgetary Operations
Zanzibar's revolutionary government collected TZS 204.4 billion in domestic revenue and grants in June 2026 (77.5% of the monthly target), of which domestic revenue made up 86.6 percent. Tax collections reached TZS 160.1 billion (72.9% of target); non-tax revenue reached TZS 17.0 billion (78.2% of target). Government spending of TZS 423.6 billion — TZS 314.9 billion of it development expenditure — produced an overall fiscal deficit of TZS 219.2 billion, financed through domestic borrowing.
Table 6 · Zanzibar Government Resources & Expenditure, June 2026 (TZS Billion)
Item
2025 Actual
2026 Estimate
2026 Actual
Achievement
Revenue
Tax on imports
30.4
31.5
26.4
83.8%
VAT & excise duties (local)
43.5
46.9
47.5
101.3%
Income tax
49.0
61.3
50.2
81.9%
Other taxes
39.2
80.0
36.0
45.0%
Non-tax revenue
20.5
21.8
17.0
78.2%
Grants
2.3
22.4
27.3
121.9%
Expenditure
Wages and salaries
68.2
67.5
67.6
100.1%
Other recurrent expenditure
92.6
55.1
41.1
74.6%
Development expenditure
270.8
369.5
314.9
85.2%
Source: Ministry of Finance and Planning, Zanzibar; BOT Monthly Economic Review, July 2026 (Charts 3.2.1 & 3.2.2).
The fiscal data above sits inside a broader macro picture that shapes both government revenue capacity and financing costs.
Chart 6 · Mainland Tanzania Quarterly Real GDP Growth, 2022–2026 (%)
Source: National Bureau of Statistics & BOT computations (Chart 2.1a).
Chart 7 · Headline Inflation, Jan 2024–Jun 2026 (%, y/y)
Source: National Bureau of Statistics (Table A9(i)). National target band: 3–5%.
Table 7 · Key Macroeconomic Indicators Snapshot
Indicator
June 2025
May 2026
June 2026
Headline inflation (y/y)
3.3%
4.2%
4.0%
Core inflation (y/y)
1.9%
3.4%
3.7%
Food inflation (y/y)
7.3%
5.6%
4.1%
Energy, fuel & utilities inflation (y/y)
2.1%
5.0%
6.3%
Central Bank Rate (CBR)
—
5.75%
6.25% (from 2 Jul 2026)
Overall lending rate
15.23%
15.32%
15.20%
Overall time deposit rate
8.74%
8.43%
8.60%
Extended broad money (M3) growth (y/y)
18.7%
25.2%
25.4%
Private sector credit growth (y/y)
15.9%
23.2%
28.1%
Exchange rate (TZS/USD, monthly average)
—
2,616.88
2,633.73
Gross official reserves
—
—
USD 5,673.5m (4.4 months of imports)
TICGL Reading: Why the CBR Was Raised to 6.25%
The BOT held its rate at 5.75% through Q2 2026 on the view that the oil/fertilizer/freight price shock from the Middle East conflict was a first-round, temporary supply effect that tighter policy could not meaningfully offset. But core inflation's rise from 2.2% (March 2026) to 3.7% (June 2026) signalled second-round effects spreading into the wider basket of goods and services, prompting the MPC's 2 July 2026 decision to raise the CBR by 50 basis points to 6.25% for Q3 2026. For government finances, a higher CBR raises the cost of the very domestic borrowing programme that is already running ahead of its FY2025/26 ceiling (see Section 3 above) — a dynamic worth watching in coming months.
External Sector & National Debt Stock
Tanzania's current account deficit widened to USD 2,303.9 million in the year to June 2026 (from USD 2,153.4 million a year earlier) as import growth (20.6% y/y for goods) outpaced robust export growth (19.2% y/y for goods, led by gold). Gross official foreign exchange reserves stood at USD 5,673.5 million, covering 4.4 months of projected imports — above the four-month national benchmark. The national debt stock (external plus domestic, in USD terms) reached USD 50,595.8 million at end-June 2026, of which 70.4 percent was external.
Source: Ministry of Finance & Bank of Tanzania (Table A10).
Table 8 · External Sector & Debt Snapshot, Year Ending June 2026
Indicator
FY2024/25
FY2025/26
% Change
Exports of goods and services (USD m)
17,001.3
19,923.6
+17.2%
Imports of goods and services (USD m)
17,629.8
20,815.7
+18.1%
Current account balance (USD m)
−2,153.4
−2,303.9
+7.0% wider
External debt stock, end-period (USD m)
34,765.3
35,606.1
+2.4%
Gross official reserves (USD m)
5,546.9
6,329.0 (2025 annual) / 5,673.5 (Jun-26)
—
Global Conditions Shaping the Numbers
The IMF's July 2026 World Economic Outlook Update projects global growth at 3.0 percent in 2026, strengthening to 3.4 percent in 2027; sub-Saharan Africa growth is projected to moderate to 4.3 percent in 2026. Global commodity prices corrected sharply in June 2026 after a ceasefire near the Strait of Hormuz eased risk premiums, but remained roughly 25 percent above pre-conflict levels.
Table 9 · Selected World Commodity Price Changes, June 2026 (m-o-m)
Commodity / Index
% Change (m-o-m)
Energy (overall)
−17.7%
Brent crude oil
−20.6%
Natural gas (US)
+7.3%
Fertilizers
−21.8%
Food
−2.6%
Metals and minerals
−2.4%
Precious metals
−9.2%
Gold (USD/troy oz, average)
USD 4,228 (from USD 4,587)
Note: the ECB and Bank of Japan each raised policy rates by 25bps in June 2026, while the US Federal Reserve and Bank of England held rates, signalling their next move was more likely a hike than a cut.
TICGL Analysis: What This Means for Investors & Policymakers
Key Takeaways
Revenue mobilisation is genuinely strong — Tanzania is on track to meet, or come close to, its FY2025/26 revenue budget, driven by income tax administration gains. This supports fiscal credibility and reduces near-term financing need relative to the annual plan.
Capital budget execution is the real bottleneck — with development spending at just 81.8% of its annual allocation through 11 months, public infrastructure contractors and PPP partners should plan for either a Q4 disbursement push or slippage into FY2026/27; TICGL's PPP advisory team tracks this closely for clients bidding on public infrastructure.
Domestic borrowing has already breached its annual ceiling — this raises questions about crowding-out of private credit (even though private credit growth is currently robust at 28.1% y/y) and about upward pressure on Treasury bond and bill yields, both of which rose in June 2026.
Monetary tightening (CBR to 6.25%) raises the cost of that borrowing just as the government leans more heavily on domestic markets — a policy interaction worth watching through Q3 2026.
VAT/excise underperformance on local goods deserves scrutiny — it is the weakest major revenue line even as GDP growth accelerated, suggesting either compliance gaps or a shift in consumption patterns away from VAT-heavy goods.
Ripoti ya Kila Mwezi ya Kiuchumi ya Benki Kuu ya Tanzania (BOT), toleo la Julai 2026, inaonesha kuwa uchumi wa Tanzania uliendelea kukua kwa kasi nzuri, huku Pato la Taifa (GDP) likikua kwa asilimia 6.0 katika robo ya kwanza ya 2026, ikilinganishwa na asilimia 4.3 kipindi kama hicho mwaka 2025. Mfumuko wa bei ulipanda kidogo hadi asilimia 4.0 mwezi Juni 2026, ukiendelea kubaki ndani ya lengo la kitaifa la asilimia 3–5. Kutokana na dalili za mfumuko wa bei kuenea kwenye bidhaa na huduma nyingine (core inflation), Kamati ya Sera za Fedha (MPC) iliamua kupandisha Kiwango cha Riba cha Benki Kuu (CBR) kutoka asilimia 5.75 hadi asilimia 6.25 kwa robo ya tatu ya 2026.
Kwa upande wa bajeti ya Serikali Kuu — ambayo ndiyo lengo kuu la uchambuzi huu — makusanyo ya mapato yaliendelea kuvuka malengo: Serikali Kuu ilikusanya TZS bilioni 3,152.4 mwezi Mei 2026, sawa na asilimia 101.4 ya lengo la mwezi huo, hasa kutokana na kodi ya mapato (income tax) iliyovuka lengo kwa asilimia 32.9. Hata hivyo, matumizi ya maendeleo (development expenditure) yalitekelezwa kwa asilimia 60.4 tu ya lengo la mwezi Mei, na kwa mwaka mzima wa fedha, ni asilimia 81.8 tu ya bajeti ya maendeleo iliyokuwa imetumika hadi Mei 2026 — jambo linalohitaji ufuatiliaji wa karibu. Nakisi ya bajeti ya TZS bilioni 418.3 kwa mwezi Mei ilifadhiliwa zaidi na mikopo ya ndani (TZS bilioni 376.5), na kwa ujumla, mikopo ya ndani ya mwaka wa fedha (Julai 2025 – Mei 2026) tayari imezidi bajeti yote ya mwaka ya mikopo ya ndani kwa asilimia 22.5.
TICGL inaendelea kufuatilia mienendo hii ya kibajeti kwa karibu, ikiwa ni pamoja na uchambuzi wa kina kuhusu changamoto za kisera zinazokwamisha ukuaji wa uchumi wa Tanzania kufikia lengo la dola trilioni 1 ifikapo 2050. Soma zaidi kwenye makala yetu: Tanzania's Economy: Policy Gaps Keeping $1 Trillion Out of Reach by 2050.
Tanzania Financial Markets Review — June 2026: Government Securities & the Interbank Cash Market
Treasury bills and bonds were oversubscribed, interbank liquidity stayed ample at rates close to the Central Bank Rate, and the Monetary Policy Committee has since moved the CBR to 6.25% for Q3 2026. Here is what the numbers in the Bank of Tanzania's July 2026 Monthly Economic Review mean for borrowers, bond investors and treasury desks.
📅 Published: 10 August 2026🏦 Data period: June 2026📖 Reading time: ~12 minutes✍️ By: TICGL Research Desk (TERI)
Central Bank Rate
5.75% →6.25% Q3
Overall Interbank Rate
6.00% -0.14pp
T-Bill Weighted Avg Yield
4.83% +0.09pp
TZS / USD (avg)
2,633.7 +0.6%
Change shown is month-on-month vs May 2026, except CBR which shows the confirmed move for Q3 2026 (effective 2 July 2026). Figures are drawn directly from Bank of Tanzania data — see sources.
01 — OverviewExecutive Summary
Tanzania's financial markets stayed liquid and well-subscribed through June 2026, even as the Bank of Tanzania (BOT) began tightening policy in response to an external supply shock. Mainland GDP grew 6.0% in Q1 2026 (up from 4.3% a year earlier) and headline inflation eased slightly to 4.0%, still inside the 3–5% target band — but core inflation climbed to 3.7%, its highest in two years, as Middle East-driven energy and freight costs passed through into wider prices.
Against that backdrop, the government securities market was comfortably oversubscribed: Treasury bills drew bids 2.3 times the tender size and Treasury bonds drew bids nearly 4.0 times the tender size, even as the 10-year yield jumped by almost a full percentage point. The interbank cash market stayed the main channel for redistributing shilling liquidity, with turnover up 44.8% month-on-month and the overall rate easing to 6.0%, tracking closely within the BOT's 4.25%–7.25% policy corridor. The shilling depreciated only marginally against the US dollar, and foreign exchange reserves covered 4.4 months of imports — above the 4-month national benchmark.
Policy shift in motion: the CBR was held at 5.75% through Q2 2026, then raised to 6.25% for Q3 2026 (effective 2 July) as core inflation broadened.
Strong demand for government paper: combined T-bill and T-bond bids of over TZS 2.8 trillion against a combined tender of under TZS 940 billion in June alone.
Longer yields diverged: the 10-year Treasury bond yield rose sharply (9.40% → 10.39%) while the 25-year yield eased slightly (11.99% → 11.89%).
Ample interbank liquidity: turnover of TZS 2,508.7 billion, with the Bank using reverse repos to smooth uneven liquidity distribution among banks.
Stable currency: the shilling depreciated by just 0.08% year-on-year to June 2026, supported by gold, tourism and agricultural export earnings.
📌
Before you go further — the bigger picture
This review covers June 2026's market data. For the structural question behind it — what is actually standing between Tanzania and its Dira 2050 ambitions — read TICGL's flagship policy analysis on the gaps keeping a trillion-dollar economy out of reach.
Financial market conditions do not sit in isolation — they respond to growth, inflation and the external position. Here is the backdrop against which the Treasury and interbank markets moved in June 2026.
Real GDP growth, Q1 2026
6.0%
vs 4.3% in Q1 2025; BOT projects 5.9% for Q2 2026
Headline inflation
4.0%
Down from 4.2% in May; within the 3–5% national target
Core inflation
3.7%
Up from 3.4% in May — the driver of the July rate hike
Current account deficit (12-mo)
$2,303.9m
Widened from $2,153.4m a year earlier
Gross official reserves
$5,673.5m
Covers 4.4 months of imports (benchmark: 4.0 months)
M3 money supply growth (y/y)
25.5%
Up from 25.2% in May 2026
Private sector credit growth (y/y)
28.1%
Up from 23.2% — trade, agriculture, transport led
Global Brent crude (June avg)
$85.40/bbl
Down 20.6% m/m but still ~25% above pre-conflict levels
03 — Policy BackdropMonetary Policy: Holding Through a Supply Shock, Then Acting
Since January 2024, the BOT has run an interest rate-based framework in which the quarterly Central Bank Rate (CBR) is the primary policy lever, transmitted through the 7-day interbank rate to banks' funding costs and ultimately to lending and deposit rates. The MPC held the CBR at 5.75% through Q2 2026 (April–June), reasoning that a first-round supply shock — Middle East conflict pushing up oil, fertilizer, freight and insurance costs — did not yet warrant tightening, given well-anchored inflation expectations, a good 2025/26 harvest, and government fuel subsidies absorbing part of the shock.
That changed once core inflation — which strips out unprocessed food and energy — rose from 2.2% in March 2026 to 3.7% in June 2026, evidence that the shock was broadening into second-round effects across the wider economy. On 2 July 2026 the MPC raised the CBR to 6.25% for Q3 2026.
Contain broadening, second-round pass-through evidenced by rising core inflation
Why this matters for markets
A higher CBR from July 2026 raises the anchor for the whole yield curve. Money-market rates that eased through June (interbank 6.00%, T-bill weighted yield 4.83%) are the base against which the Q3 hike will be measured in the BOT's next monthly review — watch for a re-pricing higher across short-dated paper and bank lending rates from Q3 2026 onward.
04 — Core FocusGovernment Securities Market
Government securities auctions were comfortably oversubscribed in June 2026, and longer maturities in particular attracted strong investor appetite — a sign that domestic institutional investors (banks, pension funds, insurers) continue to see Tanzanian government paper as an attractive, liquid store of value even as yields moved in different directions across the curve.
Treasury Bills
Combined tender size
TZS 552.1bn
Two auctions in June 2026
Bids received
TZS 1,295.9bn
≈2.3x subscription rate
Amount accepted
TZS 597.1bn
Slightly above offer, to meet strong demand
Overall weighted avg. yield
4.83%
Up from 4.74% in May 2026
Treasury Bills — Overall Weighted Average Yield
Monthly, June 2025 – June 2026 (%). Dashed line marks the confirmed CBR for Q2 2026.
Table: Treasury bill rates by tenor (%)
Tenor
Dec-25
Mar-26
May-26
Jun-26
35 days
5.38
4.20
3.23
2.82
91 days
5.93
4.23
3.78
3.56
182 days
5.91
5.69
5.23
4.98
364 days
6.24
5.80
5.63
6.65
Overall weighted average
5.87
5.21
4.74
4.83
Short tenors (35–182 days) kept falling through June, but the 364-day rate jumped to 6.65% — the steepest point on the bill curve, suggesting investors are already pricing in the Q3 2026 CBR hike at the one-year point. Source: BOT Table A4.
Treasury Bonds
Combined tender size
TZS 387.6bn
10-year and 25-year papers
Bids received
TZS 1,539.6bn
≈4.0x subscription rate
Amount accepted
TZS 269.8bn
≈17.5% bid acceptance rate
10-yr / 25-yr yield
10.39% / 11.89%
+0.99pp / -0.10pp vs May 2026
Treasury Bond Yields to Maturity — 10-Year vs 25-Year
Monthly, June 2025 – June 2026 (%)
10-year yield25-year yield
Table: Government bond yield curve — Dec-25 vs Mar-26 vs Jun-26 (%)
Tenor
Dec-25
Mar-26
Jun-26
Chg. Dec–Jun (pp)
2-year
10.05
8.36
8.36
-1.69
5-year
10.54
10.54
9.54
-1.00
7-year
9.71
9.71
9.71
0.00
10-year
12.45
11.30
10.39
-2.06
15-year
12.08
10.78
10.39
-1.69
20-year
12.02
10.71
10.43
-1.59
25-year
13.19
11.99
11.89
-1.30
Across almost every tenor, yields to maturity have fallen since December 2025 — a sign of easing term premia and strong institutional appetite for duration — even though June's single-month print on the 10-year (+0.99pp m/m) was a sharp reversal. Source: BOT Table A4.
Government Securities Issued for Financing Purposes
Treasury Bills vs Treasury Bonds, monthly, July 2025 – June 2026 (TZS billion)
In June 2026 alone, the government mobilised TZS 468.0 billion domestically — TZS 194.7 billion via Treasury bills and TZS 273.3 billion via Treasury bonds — against domestic debt service of TZS 1,551.5 billion (TZS 1,264.4 billion principal, TZS 287.1 billion interest). Source: BOT Chart 2.7.2.
05 — Core FocusInterbank Cash Market
The interbank cash market remains the primary channel through which banks redistribute shilling liquidity among themselves, and it is the fastest-moving transmission point for BOT policy. In June 2026, turnover rose sharply and the overall rate eased further within the policy corridor.
Turnover, June 2026
TZS 2,508.7bn
Up 44.8% from TZS 1,732.7bn in May 2026
7-day tenor share
56.8%
Of total transaction volume
Overall interbank rate
6.00%
Down from 6.14% in May 2026
7-day IBCM rate (Q2 avg)
5.98%
Close to the 5.75% CBR — effective transmission
Money Market Rates: Interbank Cash Market vs Treasury Bills
Overall interbank cash market rate and overall Treasury bill rate, monthly, June 2025 – June 2026 (%)
Both money-market rates converged toward — and then traded close to — the CBR corridor by June 2026, a textbook sign of effective monetary policy transmission under the interest-rate framework adopted in January 2024. Source: BOT Table A4.
Interbank Turnover by Tenor, June 2026
Share of total transaction volume
Table: Interbank rates by maturity band (%)
Maturity band
Dec-25
Jun-26
Overnight
6.00
5.53
2–7 days
6.30
5.90
8–14 days
6.26
6.46
15–30 days
6.40
6.64
31–60 days
7.20
6.70
61–90 days
8.11
6.84
91–180 days
8.89
7.07
181 days & above
10.93
12.00
Overall
6.29
6.00
Rates compressed across nearly every short band, but the longest interbank tenor (181+ days) rose sharply — echoing the same forward-looking repricing seen in the 364-day T-bill. Source: BOT Table A4.
Liquidity management tool: reverse repos
Where liquidity was unevenly distributed among banks during June 2026, the BOT injected funds through reverse repo operations rather than letting pockets of tightness push the interbank rate outside its corridor — a routine but important part of keeping short-term money-market rates anchored near the CBR.
06 — Related MarketInterbank Foreign Exchange Market
The interbank foreign exchange market (IFEM) — the venue where banks and the BOT trade shillings against foreign currency — stayed broadly stable in June 2026, underpinned by strong export receipts, particularly gold.
IFEM turnover
$193.3m
Up from $119.3m in May 2026 (+62.1%)
BOT net sale
$28.5m
Smoothing excessive volatility, per intervention policy
Average exchange rate
TZS 2,633.73/$
From TZS 2,616.88/$ in May 2026
Annual depreciation (to Jun-26)
0.08%
vs 0.21% in the year to June 2025
TZS / USD Exchange Rate (End of Period)
Monthly, June 2025 – June 2026
The shilling's gradual, orderly slide from about TZS 2,437–2,605/$ across the period to TZS 2,623.5/$ by June 2026 reflects managed stability rather than sharp devaluation, aided by gold export earnings and the BOT's domestic gold purchase programme. Source: BOT Table A10.
07 — TransmissionCommercial Bank Lending & Deposit Rates
Money-market conditions ultimately feed through to the rates households and businesses actually face. In June 2026 the overall lending rate eased slightly while deposit rates firmed, narrowing — then widening — the spread borrowers pay over what savers earn.
Overall Lending Rate vs Overall Time Deposit Rate
Monthly, June 2025 – June 2026 (%)
Overall lending rateOverall time deposit rate
Table: Commercial banks' lending and deposit interest rates (%)
Item
Dec-25
Jan-26
Feb-26
Mar-26
Apr-26
May-26
Jun-26
Savings deposit rate
3.02
2.94
2.98
2.89
2.91
2.85
2.90
Overall lending rate
15.24
15.10
15.11
15.11
15.33
15.32
15.20
Short-term lending (up to 1yr)
15.46
15.49
15.41
15.45
15.31
15.38
15.38
Negotiated lending rate
12.38
12.25
12.19
12.21
12.56
11.90
11.93
Overall time deposit rate
8.36
8.33
8.32
8.33
8.54
8.43
8.60
12-month deposit rate
9.58
9.70
9.82
9.60
9.81
10.17
9.72
Negotiated deposit rate
11.66
11.74
11.48
11.57
11.37
11.25
11.17
Short-term interest spread
5.88
5.79
5.59
5.85
5.50
5.22
5.66
The negotiated lending–deposit spread widened to 5.66 percentage points in June 2026 from 5.22 points in May, driven mainly by movement in one-year lending rates. Source: BOT Table 2.4.1.
08 — TICGL ViewWhat This Means for Businesses, Investors and Treasury Desks
For bond investors
The flattening of yields across most tenors since December 2025 (2yr, 10yr, 15yr, 20yr, 25yr all lower) suggests strong institutional appetite for duration. But the sharp June jump in the 10-year yield and the 364-day bill rate signals the market is already front-running the Q3 2026 CBR hike — investors adding duration now should expect near-term mark-to-market volatility before the curve resettles.
For corporate treasuries & borrowers
Short-term borrowing costs (interbank, T-bills) eased through June, but the CBR move to 6.25% from July is likely to push lending rates — currently 15.20% overall, 11.93% for negotiated prime borrowers — modestly higher in Q3. Businesses planning working-capital facilities may want to lock in rates before repricing filters through.
For importers & exporters
The shilling's 0.08% annual depreciation and reserves covering 4.4 months of imports point to continued currency stability in the near term. Importers of fuel, fertiliser and industrial inputs — the categories driving the 20.6% rise in goods imports over the year to June 2026 — still face upside risk from global energy prices rather than from the exchange rate itself.
Key takeaways at a glance
Both Treasury bills and bonds were significantly oversubscribed in June 2026 (2.3x and ~4.0x respectively), reflecting deep domestic demand for government paper.
The interbank cash market absorbed a 44.8% jump in turnover while the overall rate eased to 6.00%, staying comfortably inside the BOT's 4.25%–7.25% corridor.
The CBR held at 5.75% through Q2 2026 but was raised to 6.25% for Q3 2026 as core inflation broadened from 2.2% to 3.7% — the clearest signal yet that policy is turning less accommodative.
The shilling remains one of the more stable currencies in the region, helped by gold, tourism and agriculture export receipts.
Lending–deposit spreads widened again in June (5.66pp), meaning the transmission of cheaper money-market rates to end borrowers remains incomplete.
09 — Quick AnswersFrequently Asked Questions
What is Tanzania's Central Bank Rate (CBR) in mid-2026?
The BOT held the CBR at 5.75% through Q2 2026 (April–June). On 2 July 2026, the Monetary Policy Committee raised it to 6.25% for Q3 2026, after core inflation rose from 2.2% in March to 3.7% in June.
Were Treasury bills and bonds oversubscribed in June 2026?
Yes. T-bills (tender TZS 552.1bn) attracted bids of TZS 1,295.9bn — about 2.3 times the offer. T-bonds (10- and 25-year, tender TZS 387.6bn) attracted bids of TZS 1,539.6bn — about 4.0 times the offer.
What happened to the interbank cash market rate in June 2026?
It eased to 6.00% from 6.14% in May 2026, as turnover rose to TZS 2,508.7bn from TZS 1,732.7bn, with 7-day transactions making up 56.8% of volume.
Is the Tanzanian shilling stable against the US dollar?
Broadly yes — the shilling depreciated by only about 0.08% in the year to June 2026 (vs 0.21% the year before), helped by strong gold, tourism and agricultural export earnings and a 4.4-month import cover of reserves.
10 — MethodologySources & Notes
All figures in this review are compiled from the Bank of Tanzania, Monthly Economic Review, July 2026 (data as of June 2026), including Tables 2.4.1, 2.5.1–2.5.3, A3, A4, A9 and A10, and Charts 2.3.1–2.3.3, 2.5.1–2.5.3 and 2.7.2.
Percentage changes and subscription ratios (e.g. "2.3x", "44.8%") are calculated by TICGL Research from the underlying BOT figures for reader convenience.
Figures marked provisional in the source report may be revised in subsequent BOT publications; treat month-to-month moves in the most recent print with appropriate caution.
This page is an independent analytical summary prepared by TICGL/TERI and does not constitute investment advice. Readers making financial decisions should consult a licensed advisor and the original BOT publication.
11 — Explore MoreTICGL Economic: Related Insights & Tools
Continue exploring Tanzania's economy with more research and live data from TICGL's economic desk.
Policy Analysis
What's Next for Tanzania's Economy? The Policy Gaps Keeping $1 Trillion Out of Reach by 2050
The structural reforms Tanzania needs to convert current growth into a $1 trillion economy by 2050.
Masoko ya fedha Tanzania yaliendelea kuwa na ukwasi wa kutosha na uhitaji mkubwa mwezi Juni 2026, licha ya changamoto za kimataifa zinazosababishwa na mzozo wa Mashariki ya Kati. Uchumi ulikua kwa asilimia 6.0 katika robo ya kwanza ya 2026, na mfumuko wa bei ulipungua kidogo hadi asilimia 4.0, ndani ya lengo la Serikali la asilimia 3–5. Hata hivyo, mfumuko wa bei wa msingi (core inflation) ulipanda hadi asilimia 3.7, jambo lililoifanya Kamati ya Sera ya Fedha (MPC) kupandisha Kiwango cha Riba cha Benki Kuu (CBR) kutoka asilimia 5.75 hadi asilimia 6.25 kuanzia robo ya tatu ya 2026.
Katika soko la dhamana za Serikali, minada ya hati fungani za muda mfupi (Treasury bills) na hati fungani za muda mrefu (Treasury bonds) ilipata uhitaji mkubwa kuliko kiwango kilichotolewa — mara 2.3 kwa hati za muda mfupi na karibu mara 4.0 kwa hati za muda mrefu. Riba ya wastani ya hati za miaka 10 ilipanda kwa kasi hadi asilimia 10.39, wakati riba ya hati za miaka 25 ilishuka kidogo hadi asilimia 11.89.
Katika soko la fedha baina ya mabenki (interbank cash market), kiwango cha mauzo (turnover) kiliongezeka kwa asilimia 44.8 hadi shilingi bilioni 2,508.7, na riba ya wastani ilishuka hadi asilimia 6.0, ikikaribiana zaidi na CBR — ushahidi wa usambazaji mzuri wa sera ya fedha. Thamani ya shilingi ilibaki tulivu, ikishuka kwa asilimia 0.08 tu mwaka hadi Juni 2026, ikisaidiwa na mauzo ya dhahabu, utalii na mazao ya kilimo.
CBR: asilimia 5.75 (robo ya pili) → asilimia 6.25 (robo ya tatu ya 2026)
Riba ya wastani ya soko la mabenki: asilimia 6.00 (Juni 2026)
Riba ya wastani ya hati fungani za muda mfupi: asilimia 4.83
Shilingi: TZS 2,633.73 kwa dola moja ya Marekani (wastani wa Juni 2026)
Chanzo: Benki Kuu ya Tanzania (BOT), Monthly Economic Review, Julai 2026. Uchambuzi huu umeandaliwa na Idara ya Utafiti ya TICGL / Tanzania Economic Research Institute (TERI).
