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Tanzania's Real Problem Is Structural, Not Taxes | TICGL Economic Research 2026
TICGL Economic Research · April 2026

Tanzania's Real Problem Is Structural,
Not a Matter of Taxes

A comprehensive, data-driven analysis synthesising two TICGL research series: Tanzania's deep-rooted structural constraints across key economic sectors, and why raising taxes alone is demonstrably insufficient for Tanzania's development. The diagnosis is unambiguous — Tanzania sits in a structural trap that higher tax rates cannot unlock.

📊 TICGL Economic Research Unit 📍 Dar es Salaam, Tanzania 📅 Published: April 11, 2026 📚 Sources: World Bank · IMF · FYDP IV · OECD · TRA · TISEZA ⏱ ~18 min read
13.1%
Tax-to-GDP Ratio
TRA FY2024/25
30%
Corporate Income Tax
TRA · Highest in EAC
55%
Economy Informal (GDP)
FYDP IV Baseline 2023
94.2%
Informal Employment
FYDP IV 2026
16.4%
Private Credit / GDP
IMF / World Bank 2023
USD 183B
FYDP IV Investment Target
FYDP IV 2026–2031
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Contents of This Research

00 The Central Thesis — Two Findings, One Diagnosis 01 FYDP IV's Own Structural Diagnosis — 7 Core Challenges 02 The Quantitative Gap — Baselines vs. 2031 Targets 03 Why Taxes Alone Cannot Fix Structural Problems 04 Cross-Sector Structural Problem Matrix 05 The Mutual Reinforcement Traps 06 8-Country Global Evidence — Enabler vs. Tax Collector → Related TICGL Research
Central Thesis

Two Research Series. One Unambiguous Diagnosis.

TICGL has published two complementary research series that together make a single, compelling empirical case: Tanzania's development challenge is fundamentally structural — and the instinct to solve it through higher taxes is not only insufficient, it risks compounding the structural trap.

Tanzania is trapped in a low-productivity, high-informality, commodity-dependent, under-financed equilibrium — and a higher Corporate Income Tax rate cannot escape a structural trap. Only structural reform can.

— TICGL Economic Research Unit, synthesising FYDP IV Analysis & Enabler State Research, 2026

⚠️ The Structural Trap Defined

Tanzania's 13.1% Tax-to-GDP ratio sits below the 15% minimum threshold for basic state functions — yet TRA has exceeded revenue targets by over 103% for two consecutive years. The problem is not collection efficiency. It is the narrow tax base and insufficient private sector depth — both products of structural failure, not insufficient tax rates. Raising rates on an already-burdened narrow base is a symptom-treatment, not a cure.

❌ The Wrong Diagnosis
  • Tanzania's fiscal problem is that taxes are too low
  • Higher CIT rates will generate more development revenue
  • TRA collection efficiency is the binding constraint
  • More tax revenue → more public investment → growth
  • The 55% informal economy is a tax compliance problem
  • Sector-level interventions alone can fix the gaps
✓ What the Data Actually Show
  • Tanzania's fiscal problem is the narrow taxable base — a structural fact
  • CIT at 30% is already highest in EAC; it deters the investment that would broaden the base
  • TRA exceeds targets by 103% — collection is not the bottleneck
  • Private credit at 16.4% of GDP is the binding constraint on productive investment
  • 94.2% informal employment is a structural labour market failure, not a compliance issue
  • Cross-cutting structural problems require simultaneous, systemic reform
Section 01 — FYDP IV Self-Diagnosis

Tanzania's Seven Core Structural Challenges — FYDP IV's Own Admission

FYDP IV is unusual among Tanzania's development plans in the candour of its self-diagnosis. Section 2.7 (Theory of Change) explicitly names seven structural development challenges. These are not risks to manage — they are the structural reality at the moment FYDP IV launches. Critically, the same challenges were identified in FYDP I, II, and III — all unresolved at entry to FYDP IV.

Key Analytical Finding

The fact that these seven structural challenges persist at the entry point of FYDP IV — having been identified in every prior five-year plan — is itself the most important structural finding of this analysis. They represent Tanzania's structural equilibrium, not temporary setbacks.

#ChallengeDomainKey Evidence / IndicatorPrimary Sectors Affected
SP-1Low ProductivityAcross Productive SectorsTotal factor productivity growth has been insufficient; Tanzania lags well behind regional comparators in agriculture, manufacturing, and servicesAll Sectors
SP-2Limited IndustrialisationIndustrial StructureManufacturing at only 7.3% of GDP, growth at 4.8% — Tanzania remains a raw commodity exporter despite three FYDPs targeting industrialisationManufacturing, Mining, Agriculture
SP-3Weak Value ChainsEconomic IntegrationAgriculture-agro-processing linkages fragmented; mining-manufacturing disconnected; supply chains import-dependentAgriculture, Manufacturing, Mining, Tourism
SP-4Infrastructure ConstraintsPhysical CapitalElectricity: 4,032 MW for 65M people; paved roads: 8.6%; high logistics dwell times; digital gapsEnergy, Transport, All Sectors
SP-5Environmental PressuresSustainability85% of farmland rain-fed; hydro drought risk; deforestation; desertification; coastal asset vulnerabilityAgriculture, Energy, Tourism
SP-6InformalityEconomic StructureInformal economy: 55% of GDP (2023); target 29% by 2031; informal employment: 94.2% of total workforceAll Sectors — Especially Agriculture, Trade
SP-7Governance & Implementation GapsInstitutionalFYDP III budget execution at 67%; fragmented MDA mandates; PPP frameworks exist but not operationalisedAll Sectors — Meta-Constraint
Structural Challenge Severity — Cross-Sectoral Impact Score
Score 1–10 derived from FYDP IV evidence; higher = more economically damaging
Source: TICGL analysis of FYDP IV (January 2026), Dar es Salaam
Challenge Domain Distribution
How Tanzania's seven core structural challenges span different domains
Source: FYDP IV Section 2.7 — Theory of Change, TICGL mapping
🔴 The 3-Plan Persistence Problem

These seven structural challenges were identified in FYDP I (2011–2016), FYDP II (2016–2021), FYDP III (2021–2026), and now FYDP IV (2026–2031). FYDP III achieved 5.5% growth against an 8% target, with budget execution at only 67%. The failure to break these structural constraints across 15 years of planning is the most important evidence that Tanzania's problem is deep-structural — not a matter of insufficient tax revenue.

Section 02 — The Quantitative Gap

Structural Baselines vs. FYDP IV 2030/31 Targets — Complete Gap Analysis

For many indicators, the required change is 2× to 5× the current level — compressing into five years what would typically take 15–25 years in comparable economies. This table reveals the structural distances that must be bridged through policy, investment, and institutional reform. No amount of tax collection can substitute for closing these gaps.

Sector / DomainIndicatorBaseline (2023–25)FYDP IV Target (2031)Gap / Change Required
Economic GrowthGDP Real Growth Rate5.5% (2024 actual)10.5%×1.9 acceleration
Agriculture (26.3% GDP)Post-Harvest Losses35%10%−25pp reduction
AgricultureAgriculture Credit Share14.9% (2023)20%+5.1pp
AgricultureAgriculture Real Growth Rate4.1% (2024)10%×2.4 faster
Energy (Cornerstone)Installed Electricity Capacity4,032 MW (2025)15,000 MW×3.7 expansion
EnergyRural Household Electrification36% (2025)42.8%+6.8pp
EnergyRenewable Energy Share<2% of mix≥40%×20+ scale-up
FinanceDFI Capital Base (% GDP)0.4% (2024)≥1.25%×3.1 increase
FinanceMSMEs with Active Formal Loans19% (2023)≥40%×2.1 expansion
FinanceRural Population with Microfinance19% (2023)≥80%×4.2 expansion
Human CapitalWorkforce with High Skills3%12%×4 increase
Human CapitalWorkforce with Low Skills84%55%−29pp reduction
InvestmentFDI InflowsUSD 1,717.6M (2024)USD 8,366M×4.9 increase
Trade & ExportsManufactured Goods Export Share18.6% (non-traditional)29.59%+11pp
InformalityInformal Economy (% of GDP)55% (2023)29%−26pp in 5 years
Structural Distance to Target — How Far Is Tanzania From FYDP IV Goals?
Current baseline as % of 2031 target (100% = target already achieved). Shorter bars = larger structural gap.
GDP Real Growth Rate (5.5% → 10.5%)52% of target
Electricity Capacity (4,032 MW → 15,000 MW)27% of target
MSMEs with Formal Loans (19% → 40%)48% of target
Rural Microfinance Access (19% → 80%)24% of target
DFI Capital Base / GDP (0.4% → 1.25%)32% of target
Renewable Energy Share (<2% → 40%)5% of target
FDI Inflows (USD 1.72B → USD 8.37B)21% of target
High-Skills Workforce Share (3% → 12%)25% of target
Agriculture Real Growth Rate (4.1% → 10%)41% of target
Informality Reduction (55% GDP informal → 29%)0% progress recorded
Source: FYDP IV (January 2026) baseline and target data; TICGL structural gap analysis. Informality progress indicator reflects no meaningful reduction since FYDP III.
GDP Growth: Historical Performance vs. FYDP IV Required Trajectory
Actual growth across FYDP I–III vs. the step-change ambition of FYDP IV
Source: AfDB, IMF WEO 2025; FYDP III actuals; FYDP IV 10.5% target
Energy Capacity: Current Baseline vs. 2031 Target
Tanzania must expand from 4,032 MW to 15,000 MW — a 3.7× expansion in 5 years
Source: FYDP IV Energy Sector targets; TANESCO 2025 baseline
Financial Inclusion Gaps: Baseline vs. 2031 Target (%)
Key financial sector indicators showing the structural depth of Tanzania's credit exclusion
Source: Bank of Tanzania; World Bank 2023; FYDP IV Financial Sector targets
Private Sector Credit as % of GDP — Tanzania vs. Comparators (2023)
Private credit is among the strongest predictors of long-run growth — Tanzania is critically behind
Source: World Bank WDI 2023; IMF Article IV 2024; AfDB 2023
Section 03 — The Tax Policy Question

Why Raising Taxes Alone Cannot Fix Structural Problems

The global empirical record is unambiguous: no developing country has achieved structural transformation primarily through tax increases. Countries that have done it — Singapore, Rwanda, Ireland, Estonia, Mauritius, Vietnam, South Korea, Georgia — did so by enabling private capital, not extracting more from a narrow base.

30%
Tanzania CIT — Highest in EAC region
TRA 2024
103%
TRA collection target exceeded for 2 consecutive years
TRA Annual Reports 2024/25
16.4%
Private Credit / GDP — Well below SSA & global peers
IMF 2023
14%
Senior management time on regulations vs. 8% SSA average
IMF Enterprise Survey 2023
141st
Tanzania — World Bank Ease of Doing Business Rank (2020)
World Bank 2020
13.1%
Tax-to-GDP — Below 15% basic-state-function threshold
TRA FY2024/25
📌 The IMF's Own Finding

The IMF's 2025 Selected Issues Paper on Tanzania provides the most rigorous econometric evidence to date: cumbersome tax administration, limited access to finance, and limited access to transport are statistically significantly associated with lower total factor productivity (TFP) in Tanzania's manufacturing sector. Tanzania's regulatory burden is not a nuisance — it is measurably destroying economic value. The solution is structural, not fiscal.

● Pattern 1
The 15% Threshold Rule

A Tax-to-GDP of ~15% is often cited as the minimum for basic state functions. Beyond this threshold, higher ratios do not automatically translate into faster per-capita GDP growth in developing contexts. Many high-tax developing countries show weaker private-sector dynamism. Tanzania is below this threshold — but the solution is to grow the base, not the rate.

Higher CIT Rate → Reduced Investment → Narrower Base → Less Revenue
● Pattern 2
CIT Reductions Deliver Growth Multipliers

Corporate Income Tax rate reductions and targeted incentives — SEZs, preferential regimes — have repeatedly delivered higher FDI inflows, private credit expansion, and GDP growth multipliers far exceeding the initial revenue loss. Ireland: 32% → 12.5% CIT, and corporate tax revenues increased dramatically. Rwanda: 15% preferential CIT, 7–9% sustained growth.

Lower CIT → More Investment → Broader Base → More Revenue
● Pattern 3
Private Credit & FDI Are the Real Growth Engines

Domestic credit to the private sector and FDI inflows are stronger predictors of long-term growth than raw tax collection. Singapore: >150% private credit/GDP. South Korea: ~176%. Tanzania: 16.4%. Every percentage point increase in private credit/GDP has a measurable multiplier effect on job creation, tax revenue, and GDP.

Tanzania 16.4% vs Singapore >150% vs S. Korea ~176%
Corporate Tax Rates vs. Average Annual GDP Growth
Lower CIT correlates consistently with stronger private investment and growth
Source: OECD, World Bank, IMF 2023–2024. Tanzania CIT 30% with 5.7% growth lags peers with lower CITs.
Tanzania Real GDP Growth — Historical Trend & Projection
Growth has been stable but structurally below the transformation potential required
Source: African Development Bank, IMF WEO October 2025. 2025–2026 are IMF/AfDB projections.
Section 04 — Cross-Sector Analysis

Cross-Sector Structural Problem Matrix — Severity Across 5 Key Sectors

The defining characteristic of Tanzania's structural problems is not that they exist within individual sectors — it is that the same underlying structural constraints recur across every sector simultaneously. This means sector-by-sector interventions, however well-designed, will be insufficient unless the cross-cutting structural roots are addressed.

RefStructural ProblemAgricultureIndustry / MfgEnergyFinanceEconomy-Wide
SP-1Energy Deficit & UnreliabilityCriticalCriticalCriticalHighHigh
SP-2Finance Shallowness & Credit ExclusionCriticalCriticalHighCriticalCritical
SP-3Skills Mismatch & Human Capital DeficitCriticalCriticalHighHighHigh
SP-4Informality (94.2% Informal Employment)CriticalCriticalMediumCriticalCritical
SP-5Infrastructure Gaps (Transport, Logistics, Digital)HighCriticalCriticalHighHigh
SP-6Institutional Weakness & Regulatory FragmentationCriticalCriticalHighHighCritical
SP-7Commodity Export Dependence & Low Value AdditionHighCriticalMediumMediumCritical
SP-8Import Dependence for Inputs & Capital GoodsHighCriticalHighCriticalHigh
SP-9Climate Vulnerability & Environmental DegradationCriticalMediumCriticalHighMedium
SP-10Implementation & Coordination FailureCriticalCriticalCriticalCriticalCritical
Structural Problem Pervasiveness — Count of "Critical" Ratings Across All Sectors
Higher bars = more cross-cutting structural blockage. SP-10 (Implementation Failure) and SP-2 (Finance) are the most pervasive.
Source: TICGL cross-sector severity mapping based on FYDP IV sectoral analysis (January 2026)
Section 05 — The Structural Trap

The Mutual Reinforcement Traps — Why Three FYDPs Could Not Break Them

Tanzania's structural problems do not operate independently. They form a self-reinforcing system that makes each problem harder to solve precisely because the others remain unresolved. This is the defining characteristic of a structural trap — and it is why three consecutive five-year plans have failed to break it.

● Critical Linkage 1
Energy Deficit → Manufacturing Stagnation

Energy is the primary input constraint for manufacturing. Without reliable, affordable power, factories cannot operate competitively, investment in productive capacity is discouraged, and manufacturing productivity gains are structurally blocked. Tanzania's 7.3% manufacturing share of GDP after three FYDPs targeting industrialisation is the result.

4,032 MW deficit → Factory costs up → Investment deters → Mfg stagnates
● Critical Linkage 2
Finance Shallowness → Skills Deficit → Low Productivity

Shallow financial markets mean insufficient long-term credit for industrial investment; without investment, firms cannot adopt productivity-enhancing technology; without technology, demand for high-skilled workers does not emerge; without demand for skills, the education system does not supply them. A cascading structural chain.

Credit at 16.4% GDP → No tech investment → Skills stagnate → Low productivity
● Critical Linkage 3 — Self-Reinforcing Loop
Informality → Finance Exclusion → Informality

Informal enterprises have no credit history, no collateral, and no formal cash flows — making them unbankable. Without bank credit, they cannot invest in productivity or formalise. Without formalisation, they remain excluded from the financial system. This is a structural chicken-and-egg trap. With 94.2% informal employment, this loop affects virtually the entire Tanzanian workforce.

94.2% informal → No credit access → Can't formalise → Stays informal
● Critical Linkage 4
Commodity Dependence → Fiscal Volatility → Underinvestment

Tanzania's exports are dominated by gold, agricultural commodities and minerals — all price-takers in global markets. When commodity prices fall, the government cuts capital budgets. When they rise, the pressure to diversify reduces. This creates a self-sustaining commodity dependence cycle that no tax rate increase can interrupt.

Commodity exports → Price volatility → Cut capex → No diversification
● Critical Linkage 5
Institutional Weakness → Plan Underperformance → Credibility Loss

FYDP III achieved 5.5% growth against an 8% target. Budget execution at 67%. PPP frameworks exist but not operationalised. Each failed plan makes the next harder to credibly implement: investors become sceptical, development partners reduce budget support, and public confidence weakens. The 67% execution rate is the meta-structural constraint on FYDP IV.

67% execution → Targets missed → Credibility lost → Next plan harder
● High Linkage 6
Climate Vulnerability → Agricultural Instability → Reform Disruption

85% of Tanzanian farmland is rain-fed. When droughts occur, agricultural output falls, food prices rise, the current account deteriorates, fiscal pressure mounts, and political pressure shifts to subsidies rather than structural reform. Climate shocks derail structural transformation with regularity — a growing risk under FYDP IV's 2026–2031 window.

85% rain-fed → Drought hits → Food inflation → Reform deferred
Structural Problem Interconnection — How Central Is Each Problem to the Trap?
Times each structural problem appears in mutual reinforcement chains — higher = more central to Tanzania's structural trap
Source: TICGL mutual reinforcement mapping; FYDP IV sectoral analysis 2026
🔴 The Structural Trap Analytical Conclusion

Tanzania's structural problems form an interlocking web. Solving any single problem in isolation does not break the trap — because the other problems immediately re-constrain the solution. Breaking the trap requires simultaneous progress on energy, finance, skills, informality, and institutional capacity. No tax rate increase addresses any of these five dimensions. FYDP IV's sequencing and prioritisation of structural reforms is therefore more important than the individual targets — or revenue targets — themselves.

Section 06 — Global Evidence (8 Countries)

What 8 Global Economies Prove: Enabler Over Tax Collector

Every country that has achieved sustained structural transformation did so by positioning government as an enabler of private capital, not a rate-maximising tax collector. The data from Singapore, Rwanda, Ireland, Estonia, Mauritius, Vietnam, South Korea, and Georgia give a clear, unambiguous answer to Tanzania's policy question.

CountryTax-to-GDPCIT RateAvg. GDP GrowthPrivate Credit/GDPKey EnablerStatus
🇹🇿 Tanzania13.1%30% Highest EAC5.3–5.7%16.4% Critical gapLimited — regulatory burden high; 266 parastatals competing with private sector⚠ Needs Reform
🇸🇬 Singapore13.6%17% + exemptions4–5%+>150% ★ World-classSEZ incentives, territorial tax, world-class logistics, zero capital gains✅ Model Example
🇷🇼 Rwanda15.7%15% preferential / 28% standard7–9%RisingRwanda Development Board, low corruption, business climate reforms✅ African Benchmark
🇮🇪 Ireland~22%12.5% effectiveHigh / EU-leadingExtremely HighDeliberate low-CIT strategy since 2003; pharma & tech FDI magnet✅ Model Example
🇪🇪 Estonia~20–22%0% on reinvested profitsAbove EU avg.HighDistribution-only CIT + world-leading e-governance; zero paper bureaucracy✅ Digital Leader
🇲🇺 MauritiusModerate15% flat rate4–5%HighFreeport/export incentives, 100% foreign ownership, zero capital gains✅ Africa's #1
🇻🇳 Vietnam~18–20%10–20% (SEZ preferential)6–7%Very HighDoi Moi reforms + massive SEZ incentives; Samsung, Intel, Nike anchors✅ Manufacturing Hub
🇰🇷 South Korea~28–29% (now)25% (now — rose AFTER transformation)Historical miracle~176%Private chaebols first; tax rose ONLY AFTER private sector was built📘 Historical Lesson
🇬🇪 Georgia~24%15%Sustained post-reformGrowingRose Revolution 2003: 21 taxes → 5; radical simplification + anti-corruption✅ Reform Model
Corporate Income Tax Rates — Tanzania vs. 8 Comparators (%)
Tanzania's 30% CIT is one of the highest among its development peers
Source: OECD Revenue Statistics 2024; national tax authorities. Tanzania highlighted in red.
Average Annual GDP Growth vs. CIT Rate — 8 Countries + Tanzania
Countries with lower CITs and stronger private enablement consistently grow faster
Source: World Bank WDI 2023; IMF WEO 2024; AfDB Economic Outlook 2024
✅ The South Korea Sequencing Lesson — Most Important for Tanzania

South Korea's Tax-to-GDP rose from ~10–12% to ~28% over four decades — but it rose because the private sector was built first. Tanzania must learn this sequencing: Enable the private sector → broaden the base → collect higher revenues as a consequence of growth, not as a precondition for it. No successful developing economy has ever reversed this sequence and succeeded.

Not a single developing-country success story relied primarily on tax increases without simultaneous private-sector reforms. Enable first. Collect second.

— TICGL Research synthesis of OECD, World Bank, IMF global evidence, 2026

Chanzo cha Utafiti Huu — Source Research Articles

Utafiti Huu Unatokana na Makala Mbili za TICGL

This synthesis research draws directly from two original TICGL publications. For deeper reading, primary data, additional charts, and full citations — access both source articles below. Tunakushukuru kwa kusoma; tafadhali tembelea makala asili kwa maelezo zaidi.

📊 TICGL Research · FYDP IV Cross-Sectoral Analysis

Tanzania's Deep-Rooted Structural Constraints Across Key Economic Sectors

A comprehensive analysis of structural problems persisting across Agriculture, Manufacturing, Energy, Finance, and Governance — and the threats they pose to FYDP IV's USD 183 billion transformation agenda (2026/27–2030/31).

FYDP IV Analysis 5 Sectors 10 Structural Problems Published March 2026
Soma Makala Asili →
📈 TICGL Research · Tax Policy & Enabler State Analysis

Why Raising Taxes Alone Is Insufficient for Tanzania's Development

Empirical evidence from 8 global economies demonstrates that the path to sustainable development requires government to act as an enabler of private sector growth — not merely as a tax collector.

8 Country Evidence Tax Policy FDI & SEZ Reform Published April 2026
Soma Makala Asili →
Section 07 — SEZ & Investment Reform

Tanzania's SEZ & EPZ Framework — The TISEZA 2025 Revolution

Tanzania's Special Economic Zones have the architecture of an enabler state — but implementation gaps have historically limited their potential. TISEZA's 2025 reforms are producing dramatic, measurable results: proof that structural reform — not tax increases — drives the transformation Tanzania needs.

37%
FDI Projects Growth Year-on-Year
TISEZA Q1 2025/26 Bulletin
1,053%
EPZ/SEZ Jobs Surge in Q1 2025/26
TISEZA Quarterly Bulletin
204%
EPZ/SEZ Turnover Jump to US$127.53M
TISEZA 2025
212,293
Total Jobs Created in 2024 — Highest Since 1991
TISEZA / TIC 2024
✅ The TISEZA Reform Proof Point

Parliament passed the Tanzania Investment and Special Economic Zones Authority (TISEZA) Act No. 6 of 2025 in February 2025, merging TIC and EPZA into a single streamlined authority. The first full quarter produced extraordinary results: FDI projects up 37%, EPZ/SEZ jobs surging 1,053%, turnover jumping 204%. These are not incremental improvements — they are the structural reform model working in real time. No tax rate change produced these results.

SEZ Employment — Tanzania Historical vs. Global Peers at Peak Year (2008)
Tanzania's SEZ job creation has historically lagged peers dramatically; TISEZA reforms are accelerating catch-up
Source: Charter Cities Institute 2024; UNCTAD; TISEZA 2025
Tanzania EPZ/SEZ Exports as % of National Exports — Historical Trend
SEZ exports have grown from negligible to a meaningful share — but still well below potential
Source: TISEZA; EPZA historical reports; TICGL analysis 2025

Tanzania's EPZ/SEZ Offer vs. Global Best Practice

Incentive AreaTanzania EPZ/SEZ (Current)Vietnam SEZ (Benchmark)Rwanda / Mauritius Best PracticeGap Assessment
Corporate Tax Holiday10-year holiday on CIT10–15 year holiday + 50% reduction afterRwanda: up to 7-year + 15% preferential⚠ Competitive — needs extension
VAT on Raw MaterialsExemptExemptExempt✅ On par
Import Duty on Capital GoodsExemptExemptExempt✅ On par
Withholding TaxExempt (10-year holiday)Exempt during holidayMauritius: 0% on most distributions⚠ Mauritius more attractive long-term
Foreign Worker PermitsUp to 10 non-citizens; max 8-year work permitsUnrestricted for key roles in SEZsRwanda: No quota for priority sector investors❌ Restrictive — deters skills transfer
Land Access / TenureLand bank; 99-year leases (2023 policy)50–75 year lease, clear title systemMauritius: 60-year leases + investor protection⚠ Improving — disputes affect ~20% projects
One-Stop CentreTISEZA OSFC launched 2025; 2,695 consultations Q1Fully digital, <5 days registrationRwanda: <6 hours company registration🔄 Improving — cut from 60→30 days
Infrastructure in Zones10 of 14 parks still in development; Bagamoyo started Dec 2025Full infrastructure standard in all SEZsMauritius Freeport: world-class logistics❌ Critical gap — biggest investor constraint
Customs ProcessingOn-site customs inspectionOn-site + pre-clearance48-hour clearance target⚠ Adequate — needs digitisation upgrade
🌊
Game Changer · Bagamoyo Eco Maritime City

The Infrastructure Anchor Tanzania Always Needed

After a decade-long delay, the Bagamoyo Eco Maritime City SEZ port construction commenced in December 2025. Spanning 1,000+ hectares on the Indian Ocean coast, the SEZ is designed to add up to 20 million tons of annual cargo capacity — positioning Tanzania as East Africa's maritime gateway. Combined with the standard-gauge railway reducing freight costs by 40%, this represents the most significant enabling infrastructure investment in Tanzania's post-independence history.

1,000+ hectares 20M ton/yr target Started Dec 2025 SGR: −40% freight costs
Section 08 — FDI Revolution 2023–2025

Tanzania's FDI Revolution — What the Data Reveals

Tanzania's FDI story in 2024 is one of the most striking in Sub-Saharan Africa — a 400%+ surge driven entirely by enabling policy reforms, not tax changes. This directly validates the structural argument: when government removes friction, private capital responds.

400%+
FDI Surge: USD 1.3B (2023) → USD 6.56B (2024)
TICGL FDI Analysis 2025
901
FDI Projects Registered in 2024
TIC / TISEZA 2024
28.3%
East Africa's Fastest FDI Growth Rate (Regional avg: 12%)
TICGL 2024
377
Manufacturing FDI Projects Leading All Sectors (2023)
TIC / TISEZA 2023
USD 1.36B
FDI in Q3 of 2024/25 alone
TISEZA Q3 2024/25
#1
Africa's Leading Destination — World Travel Awards 2025
World Travel Awards 2025
Tanzania FDI Inflows — Historical Trajectory & 2024 Surge (USD Billions)
FDI surged 400%+ from 2023 to 2024 following the Investment Act 2022, TISEZA formation, and land lease reform
Source: TICGL FDI Analysis 2025; TIC; UNCTAD. 2024 figure includes TIC-registered project capital (901 projects).
Tanzania FDI Capital by Sector — 2024 Registered Projects (USD Billions)
Manufacturing, transport and energy dominate — all enable private-sector-led productive capacity
Source: TICGL / TISEZA 2024 registered project data.
✅ The Proof Point: What Drove the FDI Surge?

Tanzania's FDI surge did not come from raising the Corporate Income Tax. It came from: (1) Tanzania Investment Act 2022; (2) National Land Policy 2023 — 99-year leases; (3) Electronic Investment Window reducing registration from 60 to 30 days; (4) Formation of TISEZA in 2025. Every major driver was a regulatory/facilitation reform — not a tax rate change.

FDI Inflows: Tanzania vs. EAC Comparators — 2023 vs. 2024 (USD Billions)
Tanzania surged to lead East Africa in FDI growth — driven by structural enabling reforms, not tax changes
Source: UNCTAD; AfDB Economic Outlook 2024; TICGL FDI Analysis 2025.
Section 09 — Business Environment Analysis

The Regulatory Burden — Tanzania's Hidden Implicit Tax on Private Investment

Beyond the formal 30% Corporate Income Tax, a cumbersome regulatory environment functions as an additional implicit tax — reducing productivity, deterring investment, and inflating the cost of doing business. The IMF's 2025 Selected Issues Paper provides econometric proof.

❌ Tanzania's Current Constraints
  • ✗14% of senior management time on regulations vs. 8% SSA average (IMF Enterprise Survey 2023)
  • ✗34% of firms report power outages as a major constraint (World Bank Enterprise Survey 2023)
  • ✗141st out of 190 — Tanzania's last World Bank Ease of Doing Business ranking (2020)
  • ✗Tax administration cited as top barrier to firm productivity — IMF SIP 2025
  • ✗Only 45% of mainland population connected to electricity
  • ✗Land disputes affect ~20% of investment projects
  • ✗266 public parastatals competing with sovereign credit guarantees
✅ What Enabler States Deliver
  • ✓Rwanda: <6 hours company registration (Rwanda Development Board)
  • ✓Estonia: Zero paper bureaucracy — all government services 100% digital
  • ✓Singapore: 1–3 days business registration; ranked #1 globally in EoDB for over a decade
  • ✓Georgia: 5 taxes down from 21 post-2003 reform
  • ✓Vietnam: SEZ investors get on-site all-government services — customs, permits, banking in zone
  • ✓Mauritius: 100% foreign ownership, no capital gains tax, no dividend tax
  • ✓Ireland: Consistent, predictable rule of law — zero retroactive investment contract changes

Business Environment Constraint Priority — Tanzania 2025

Constraint AreaTanzania SeverityImpact on TFPFirms AffectedReform Priority
Tax Administration ComplexityCriticalStatistically Significant Negative (IMF SIP 2025)Majority of formal firms🔴 Urgent
Access to Finance / CreditCriticalStatistically Significant Negative (IMF SIP 2025)~70% of SMEs🔴 Urgent
Transport / Logistics AccessHighStatistically Significant Negative (IMF SIP 2025)Rural & agro-firms especially🔴 Urgent
Electricity / Power OutagesHighNegative (non-parametric evidence)34% of firms report as major issue🟡 High
Regulatory Burden / LicensingHighNegative (non-parametric evidence)14% management time consumed🟡 High
Land Acquisition & TitleModerate-HighReduces investment certainty~20% of investment projects🟡 High
Corruption / Facilitation PaymentsImprovingNo significant regression evidence (2023)TI score improved 86% since 2001🔵 Continue Progress
Trade & Cross-Border ObstaclesModerateReduces export competitivenessExport-oriented firms🟡 High
Regulatory Compliance Burden — Management Time on Regulations (%)
Tanzania's 14% vs. SSA average 8% represents a 6pp productivity gap — a hidden implicit tax on every productive business
Source: IMF Enterprise Survey 2023; World Bank Enterprise Survey 2023; TICGL compilation
Section 10 — Policy Roadmap

From Tax Collector to Enabler State — A Data-Driven Policy Roadmap

Drawing on the 8-country evidence base and Tanzania's own structural baseline, this roadmap outlines specific, sequenced reforms with measurable targets at each stage.

01
Immediate Priority · 0–12 Months

Reform Corporate Tax: Target 20–25% CIT with Broad Preferential Regime

Reduce the standard CIT from 30% to 20–25%, bringing Tanzania in line with regional peers. Simultaneously, expand preferential CIT rates (15%) for priority sectors: agro-processing, manufacturing, ICT, and renewable energy. Revenue cost will be recovered within 2–3 years through an expanded tax base — as demonstrated in Ireland (2003), Rwanda, and Vietnam.

CIT → 20–25%Priority sectors: 15%SEZ post-holiday: ≤15%FDI response: 6–18 months
02
Short-Term · 6–24 Months

Accelerate TISEZA & SEZ Infrastructure — Complete the Bagamoyo Catalyst

TISEZA has demonstrated proof-of-concept: 1,053% surge in SEZ jobs in one quarter. Priority: complete Bagamoyo Eco Maritime City on schedule, electrify all 14 EPZ/SEZ parks, reduce company registration to under 5 days (from 30), implement digital customs clearance. Tanzania's SEZ exports were only 2.5% of national exports in 2016 — they should reach 10–15% within a decade if infrastructure constraints are resolved.

Registration → <5 daysAll 14 parks poweredBagamoyo Phase 1: 2027
03
Medium-Term · 1–3 Years

Resolve the Private Credit Gap — Double Private Sector Credit to GDP

Tanzania's private sector credit at 16.4% of GDP is one of the most binding constraints on growth. IMF confirms access to finance is the single biggest productivity constraint for Tanzanian manufacturers. Required: expand credit bureau coverage, establish collateral registry legal framework, reduce NPL thresholds, promote SME development finance. Target: private credit/GDP to 30–35% within 5 years.

Private credit → 30–35% GDPCollateral registry: 2026
04
Medium-Term · 2–4 Years

Slash the Regulatory Burden — Implement Blueprint for Regulatory Reform II at Speed

Tanzania's MKUMBI II reform blueprint exists — but implementation has been described as "incremental." Target: reduce senior management time on regulations from 14% to below the SSA average of 8% within 3 years. Digitise all government-business interactions, establish firm timelines with automatic approval if deadline is missed.

Mgmt time → <8%All biz services digital by 2027
05
Structural · 3–7 Years

Restructure Public Spending — Shift from Recurrent to Capital & Human Capital

Tanzania's recurrent spending consumes 58–70% of the budget — leaving too little for education (3.3% of GDP vs. UNESCO benchmark of 4–6%) and health (1.2% of GDP vs. WHO benchmark of 5%). The IMF benchmarking shows Tanzania needs a 14pp increase in private sector participation in education and 23pp in health.

Education → 4.5% GDPHealth → 2.5% GDPRecurrent share → <55%
06
Long-Term · 5–10 Years — The Revenue Reward

Broaden the Tax Base — Not the Rates

Once private sector activity has expanded and regulatory friction reduced, the natural result is a broader tax base. With nominal GDP at TZS 275 trillion in 2026, each 1pp increase in the tax-to-GDP ratio represents TZS 2.75 trillion in revenue. The goal is 16–18% tax-to-GDP through a broader base — not higher rates on the existing narrow base.

Tax-to-GDP → 16–18% by 2030Via broader base, not higher rates
Enabler State Roadmap — Key Metric Targets vs. Current Status
TICGL projection based on Rwanda, Vietnam and Ireland reform trajectories. Current = 2025; Target = 2030 aspirational benchmark.
Targets are TICGL analytical estimates. Sources: IMF WEO 2025; World Bank; TISEZA; TRA; MoFP.
Section 11 — Addressing Counter-Arguments

Frequently Raised Objections — Data-Driven Responses

A rigorous response to the most common counter-arguments against the enabler-state model for Tanzania.

Section 12 — Research Conclusion

The Choice Before Tanzania — Enable First, Collect Second

Tanzania stands at a genuine inflection point. The enabling reforms of 2022–2025 have already triggered a measurable private investment response. The question is whether Tanzania will consolidate this momentum or retreat toward higher rates on a narrow base.

The Enabler State Virtuous Cycle — Growth, Revenue & Private Investment
Stylised projection based on Tanzania's data and Rwanda/Ireland/Vietnam trajectories
Source: TICGL Research Unit 2026. Illustrative projection. Rwanda: 7–9% sustained growth corridor. Ireland: CIT reduction led to higher corporate tax revenues within 5 years.
Finding 01

Tanzania's Structural Constraints Are Real and Documented

Ten structural constraints across five sectors form an interlocking trap persisting across three FYDPs. FYDP IV's own Theory of Change acknowledges this. The diagnosis is not contested.

Finding 02

No Tax Rate Increase Can Address a Structural Trap

Higher CIT rates cannot build energy infrastructure. They cannot formalise 94.2% informal employment. They cannot deepen private sector credit from 16.4% to 35% of GDP. Only structural reform can.

Finding 03

Tanzania's Own 2024 Data Prove the Enabler Model Works

FDI surged 400%. EPZ/SEZ jobs surged 1,053%. 212,293 jobs — highest since 1991. Not one result came from a tax rate change. All came from structural enabling reforms.

"

Tanzania's Vision 2050 goal of an industrialised, upper-middle-income economy will not be achieved by raising the Corporate Income Tax from 30% to anything higher. It will be achieved by reducing it, completing Bagamoyo, fixing the private credit market, and trusting the private sector to be the engine of structural transformation.

— TICGL Economic Research Unit, April 2026

Serikali lazima iwe enabler — si mkusanyaji wa kodi tu.

The data are clear. The path is proven. The time is now.

📚 Soma Zaidi — Read the Original TICGL Research

Want the Full Data, Charts & Detailed Analysis?

Access both original TICGL research articles that power this synthesis — complete with additional charts, extended methodology, primary data tables, and sector-specific deep dives.

📊 Tanzania's Deep-Rooted Structural Constraints → 📈 Why Raising Taxes Alone Is Insufficient →
Tanzania National Debt Analysis 2026 | BOT Monthly Economic Review | TICGL
BOT Monthly Economic Review · March 2026

Tanzania National Debt:
Deep-Dive Analysis — February 2026

A comprehensive breakdown of Tanzania's total national debt of USD 51.1 billion — covering external obligations, domestic instruments, creditor structures, currency composition and debt-service trajectories as reported by the Bank of Tanzania.

📅 Reference Period: February 2026 🏦 Source: Bank of Tanzania ✍️ Analysis: TICGL Research 📍 Dar es Salaam
Total National Debt
$51.1B
USD Millions · Feb 2026
▼ 0.2% MoM
External Debt Stock
$35.9B
70.2% of total debt
▼ 0.1% MoM
Domestic Debt Stock
TZS 38.8T
≈ USD 15.3B
▲ 0.5% MoM
Multilateral Share
57.8%
Of external debt stock
Largest creditor category
USD Dominance
66.0%
Currency composition
Euro: 17.7%
National Debt Overview

Tanzania's total national debt — comprising both external and domestic obligations — stood at USD 51,112.8 million at end-February 2026, reflecting a marginal contraction of 0.2% from January 2026.

Total Debt (Feb 2026)
$51,112.8M
National debt stock, USD millions
External Debt Share
70.2%
of total national debt
Domestic Debt Share
29.8%
of total national debt
MoM Change
▼ 0.2%
vs. January 2026
Key Context: Tanzania's national debt split of 70.2% external / 29.8% domestic reflects the country's continued reliance on concessional external financing to fund infrastructure and development programmes. The slight overall contraction in February 2026 was driven primarily by a small decline in the external debt portfolio.
Total Debt Composition
Feb 2026 · USD Millions

Source: Ministry of Finance & Bank of Tanzania

Total Debt Stock — Monthly Trend
Feb 2025 – Feb 2026 · USD Millions

Source: Bank of Tanzania, Table A10

External Debt Analysis

Tanzania's external debt (public and private combined) reached USD 35,859.1 million at end-February 2026 — a decline of 0.1% from January 2026. Central government accounts for the dominant share at 82.7%.

External Debt Stock
$35,859.1M
End Feb 2026 (provisional)
Public Debt Share
82.7%
Central government
Private Sector Share
17.3%
Of external debt
Disbursements (Feb)
$83.8M
Mainly central govt
Debt Service (Feb)
$98.9M
Principal + Interest
External Debt Stock by Borrower
USD Millions · Feb-25 vs Jan-26 vs Feb-26
Borrower CategoryFeb-25 (USD M)Share %Jan-26 (USD M)Share %Feb-26 (USD M)Share %
Central Government26,394.480.5%29,687.282.7%29,640.482.7%
Disbursed Outstanding (DOD)26,317.180.3%29,606.982.5%29,560.282.4%
Interest Arrears77.30.2%80.30.2%80.20.2%
Private Sector6,389.919.5%6,204.717.3%6,218.717.3%
Disbursed Outstanding (DOD)5,827.217.8%5,770.316.1%5,774.316.1%
Interest Arrears562.81.7%434.31.2%444.51.2%
Public Corporations3.80.0%0.00.0%0.00.0%
Total External Debt32,788.0100%35,891.9100%35,859.1100%

Source: Ministry of Finance and Bank of Tanzania · p = provisional data

External Debt Trend — Monthly
Feb 2025 – Feb 2026 · USD Millions (Selected months)

Source: Bank of Tanzania, Table A10

Creditor Composition

Multilateral institutions remain the dominant creditors at 57.8% of the external debt stock, followed by commercial lenders at 35.7%. Bilateral creditors account for just 4.4%.

Creditor Composition — Feb 2026
Percentage share of external debt stock
Multilateral57.8% · $20,730.5M
Commercial35.7% · $12,818.5M
Bilateral4.4% · $1,581.3M
Export Credit2.0% · $728.8M
External Debt by Creditors — Detail
USD Millions
CreditorFeb-25Jan-26Feb-26Share %
Multilateral18,366.120,788.220,730.557.8%
DOD18,335.120,765.120,707.657.7%
Interest Arrears31.023.222.90.1%
Bilateral1,349.51,591.61,581.34.4%
Commercial11,918.012,786.312,818.535.7%
DOD11,557.712,427.912,452.934.7%
Interest Arrears360.3358.4365.61.0%
Export Credit1,154.5725.7728.82.0%
Total32,788.035,891.935,859.1100%

Source: Ministry of Finance and Bank of Tanzania

Debt by Borrower Category

Central government dominates at 82.7% of total external debt. The private sector's share has slightly declined while public corporations now hold zero outstanding external debt.

Borrower Share Evolution — Feb 2025 to Feb 2026
Percentage share of disbursed outstanding debt

Source: Ministry of Finance and Bank of Tanzania

Notable: Public corporations (TANESCO, ATCL, TRC, TPA, TFC and DAWASA) now hold zero outstanding external debt as at February 2026, compared to USD 3.8 million in February 2025 — reflecting debt clearance efforts within state-owned enterprises.
Currency Composition of External Debt

The US Dollar dominates Tanzania's external debt currency mix at 66.0%, followed by the Euro at 17.7% and Chinese Yuan at 6.5%. This concentration creates exchange-rate sensitivity.

Currency Breakdown — Feb 2026
% share of disbursed outstanding debt
🇺🇸 US Dollar66.0% · $23,317.8M
🇪🇺 Euro17.7% · $6,255.8M
🇨🇳 Chinese Yuan6.5% · $2,306.3M
🌐 Other Currencies9.8% · $3,454.6M
Currency Composition Trend
% share — Feb 2025 vs Jan 2026 vs Feb 2026
CurrencyFeb-25Jan-26Feb-26
US Dollar67.6%65.9%66.0%
Euro16.7%17.7%17.7%
Chinese Yuan6.3%6.5%6.5%
Other9.3%9.8%9.8%
Total100%100%100%

Source: Ministry of Finance and Bank of Tanzania

Disbursed Outstanding Debt by Use of Funds

BoP & budget support and transport/telecommunications jointly account for over 44% of total disbursed external debt. Social welfare and education holds a significant 19.3% share.

Use of Funds — Percentage Share
Feb 2025 vs Feb 2026 (Provisional)

Source: Ministry of Finance and Bank of Tanzania

Use of Funds — Detailed Breakdown
% share of disbursed outstanding debt
ActivityFeb-25 (%)Jan-26 (%)Feb-26 (%)Change
BoP & Budget Support20.922.622.5+1.6pp YoY
Transport & Telecommunication21.221.821.9+0.7pp YoY
Social Welfare & Education20.019.419.3−0.7pp YoY
Energy & Mining13.112.012.0−1.1pp YoY
Real Estate & Construction4.84.94.9+0.1pp YoY
Finance & Insurance4.53.53.5−1.0pp YoY
Agriculture4.85.35.3+0.5pp YoY
Industries3.63.73.7+0.1pp YoY
Tourism1.61.81.8+0.2pp YoY
Other5.54.94.9−0.6pp YoY
Total100.0100.0100.0—

pp = percentage points · Source: Ministry of Finance and Bank of Tanzania

Domestic Debt Analysis

Tanzania's domestic debt stock reached TZS 38,781.7 billion at end-February 2026, a 0.5% monthly increase. Treasury bonds dominate at 80.8% of total domestic debt, held predominantly by commercial banks and pension funds.

Domestic Debt Stock
TZS 38.8T
End Feb 2026 (provisional)
Treasury Bonds Share
80.8%
Of government securities
MoM Change
+0.5%
vs. January 2026
Govt Securities Issued
TZS 621.9B
In February 2026
Debt Servicing (Feb)
TZS 875.2B
Principal + Interest
Domestic Debt by Borrowing Instrument
TZS Billions · Feb 2026 (Provisional)
InstrumentFeb-25 (TZS B)Feb-26 (TZS B)Share %
Government Bonds27,073.731,333.280.8%
Treasury Bills1,847.41,653.04.3%
Government Stocks187.1135.70.4%
Tax Certificates0.10.10.0%
Overdraft (Non-Securitised)4,887.55,659.614.6%
Total34,014.138,781.7100%

Source: Ministry of Finance and Bank of Tanzania

Domestic Debt by Creditor Category
TZS Billions · Feb 2026 (Provisional)
HolderFeb-25 (TZS B)Feb-26 (TZS B)Share %
Commercial Banks9,791.410,834.327.9%
Pension Funds9,097.210,463.927.0%
Bank of Tanzania6,847.57,468.419.3%
Others5,872.87,273.818.8%
Insurance1,852.31,983.55.1%
BOT Special Funds552.7757.82.0%
Total34,014.138,781.7100%

Source: Ministry of Finance and Bank of Tanzania

Domestic Debt Stock — Historical Trend
TZS Billions · Feb 2018 – Feb 2026

Source: Ministry of Finance

Commercial Banks & Pension Funds collectively hold 54.9% of Tanzania's domestic debt — TZS 21,298.2 billion — underscoring the banking sector's key role as a financing conduit for government operations and the importance of pension fund governance in debt sustainability.
Debt Service Flows — February 2026

In February 2026, Tanzania's external debt service totalled USD 98.9 million while domestic debt servicing reached TZS 875.2 billion. Net external flows remained positive at USD 48.4 million.

External Debt Service — Feb 2026
USD Millions
Total Service
$98.9M
Feb 2026
Principal
$35.4M
Repayments
Interest
$63.5M
Payments

Source: Bank of Tanzania, Table A10

Domestic Debt Service — Feb 2026
TZS Billions
Total Service
TZS 875.2B
Feb 2026
Principal
TZS 472.2B
Repayments
Interest
TZS 403.0B
Payments

Source: Bank of Tanzania

External Debt Service — Monthly Trend
USD Millions · Feb 2025 – Feb 2026 (Selected Months)

Source: Bank of Tanzania, Table A10

Historical Debt Trend — Tanzania

Tanzania's external debt has grown significantly over the decade, rising from USD 20.5 billion in 2018 to USD 35.9 billion in February 2026 — an increase of approximately 75% over eight years.

Annual External & Domestic Debt Stock
USD Millions · Annual Data (Selected Economic Indicators)
YearExternal Debt (USD M)Domestic Debt (TZS B equiv.)Disbursed (USD M)Interest Arrears (USD M)
201820,503.013,74218,765.11,737.9
201921,920.914,06920,029.31,891.7
202022,952.714,64420,958.41,994.3
202125,519.315,87423,250.92,268.4
202227,832.522,15925,392.82,439.7
202330,252.727,26727,889.32,363.4
202431,950.931,73930,416.11,534.8
2025p34,765.334,01434,053.0712.3
Feb 2026p35,859.138,78235,334.4~525

Source: Bank of Tanzania Selected Economic Indicators (Table A1) & Table A10 · p = provisional

Positive Trend: Despite rising debt levels, interest arrears have declined sharply from a peak of USD 2,439.7 million in 2022 to approximately USD 524.7 million in February 2026 — a 78% reduction — signalling improved debt management discipline and timely servicing by the Government of Tanzania.
Tanzania Financial Markets 2026: Government Securities & Interbank Cash Market | TICGL
T-Bill WAY (Feb-26)
5.68%
Overall Weighted Avg Yield
▼ −21bps MoM
T-Bill Tender (Feb-26)
1,061.4B
TZS · Total bids received
2.4x oversubscribed
T-Bill Successful Bids
431.1B
TZS · vs Offer 440.9B
97.8% of offer
15-Yr Bond WAY
10.78%
Feb-26 · Down from 12.08%
▼ −130bps
25-Yr Bond WAY
11.99%
Feb-26 · Down from 13.19%
▼ −120bps
IBCM Total Volume
2,796.5B
TZS · Feb-26
▼ from 2,868.9B
IBCM Overall Rate
6.34%
Feb-26 · Eased
▼ from 6.40% Jan-26
7-Day IBCM Share
63.5%
of total activity
Dominant tenor

GOVERNMENT SECURITIES — TREASURY BILLS

Tanzania's Treasury bill market was characterised by persistent oversubscription in February 2026, reflecting robust investor appetite driven by stable macroeconomic conditions. The Bank conducted two auctions with a combined tender size of TZS 440.9 billion, attracting total bids of TZS 1,061.4 billion — a tender-to-offer ratio of approximately 2.4x. The surge in demand compressed the overall weighted average yield (WAY) further to 5.68 percent from 5.89 percent in January 2026, continuing a structural downward trend from the 11.93 percent recorded in February 2025.

Treasury Bill · Combined Feb-26
All Tenors Combined
OFFER (TZS B)440.9
TENDER (TZS B)1,061.4
SUCCESSFUL (TZS B)431.1
BID-TO-OFFER RATIO2.41x
OVERALL WAY (%)5.68
PREV MONTH WAY (%)5.89
CHANGE (BPS)▼ −21bps
T-Bill · 35-Day
35-Day Treasury Bill
YIELD JAN-26 (%)5.36
YIELD FEB-26 (%)4.75
CHANGE (BPS)▼ −61bps
YIELD FEB-25 (%)6.50
YoY CHANGE (BPS)▼ −175bps
T-Bill · 91-Day
91-Day Treasury Bill
YIELD JAN-26 (%)5.73
YIELD FEB-26 (%)4.97
CHANGE (BPS)▼ −76bps
YIELD FEB-25 (%)7.76
YoY CHANGE (BPS)▼ −279bps
T-Bill · 182-Day
182-Day Treasury Bill
YIELD JAN-26 (%)5.85
YIELD FEB-26 (%)5.85
CHANGE (BPS)→ 0bps
YIELD FEB-25 (%)8.20
YoY CHANGE (BPS)▼ −235bps
T-Bill · 364-Day
364-Day Treasury Bill
YIELD JAN-26 (%)6.21
YIELD FEB-26 (%)6.20
CHANGE (BPS)▼ −1bps
YIELD FEB-25 (%)11.99
YoY CHANGE (BPS)▼ −579bps
// AUCTION OVERSUBSCRIPTION ANALYSIS — Treasury Bills (Feb-26)
TENDER vs OFFER RATIO (All T-Bills) 2.41x OVERSUBSCRIBED
0Offer: TZS 440.9BTender: TZS 1,061.4B →
BOND TENDER vs OFFER (15+25-Yr Combined) 6.95x OVERSUBSCRIBED
0Offer: TZS 399.5BBids: TZS 2,778.1B →
// T-BILL WAY TREND — Jan-25 to Feb-26
Overall Weighted Average Yield (%) · Monthly
// AUCTION PERFORMANCE — Offer vs Tender vs Successful (TZS B)
Feb-25 to Feb-26 · Monthly
// T-BILL YIELDS BY TENOR — Monthly Trend (Jan-25 to Feb-26)
Weighted Average Yield (%) for 35, 91, 182, 364-Day Treasury Bills

// TABLE A4 — TREASURY BILL RATES (Selected Months)

% per annum · Source: Bank of Tanzania MER March 2026
TenorJan-25Feb-25Mar-25Apr-25Jun-25Aug-25Oct-25Dec-25Jan-26Feb-26YoY Δ (bps)
35-Day6.506.506.506.506.506.505.645.385.364.75▼ −175
91-Day7.767.767.427.507.507.366.085.935.734.97▼ −279
182-Day8.208.208.208.478.247.465.925.915.855.85▼ −235
364-Day12.6311.9910.118.928.926.796.456.246.216.20▼ −579
Overall WAY12.5111.9310.108.868.896.836.255.875.895.68▼ −625
Source: Table A4 — Interest Rates Structure · Bank of Tanzania MER March 2026 · bps = basis points

GOVERNMENT SECURITIES — TREASURY BONDS

The Bank conducted auctions for 15-year and 25-year Treasury bonds in February 2026, offering a combined tender size of TZS 399.5 billion. These attracted exceptional demand with bids worth TZS 2,778.1 billion — a 6.95x oversubscription ratio — of which TZS 520.2 billion were successful. Weighted average yields to maturity fell sharply: the 15-year bond to 10.78 percent and the 25-year bond to 11.99 percent.

Treasury Bond · Feb-26 Combined
15-Year & 25-Year
COMBINED OFFER (TZS B)399.5
TOTAL BIDS (TZS B)2,778.1
SUCCESSFUL (TZS B)520.2
BID-TO-OFFER RATIO6.95x
Treasury Bond · 15-Year
15-Year Government Bond
WAY TO MATURITY (%)10.78
PREV MONTH (%)12.08
FEB-25 (%)15.76
YoY CHANGE (BPS)▼ −498bps
MoM CHANGE (BPS)▼ −130bps
Treasury Bond · 25-Year
25-Year Government Bond
WAY TO MATURITY (%)11.99
PREV MONTH (%)13.19
FEB-25 (%)15.84
YoY CHANGE (BPS)▼ −385bps
MoM CHANGE (BPS)▼ −120bps
// BOND YIELDS BY TENOR — Monthly Trend (Jan-25 to Feb-26)
2-Yr, 5-Yr, 10-Yr, 15-Yr, 25-Yr · % per annum
// BOND AUCTION: OFFER vs BIDS vs SUCCESSFUL (TZS B)
Monthly Bond Issuance for Financing · Feb-25 to Feb-26

// TABLE A4 — TREASURY BOND RATES (Selected Months)

% per annum · Source: Bank of Tanzania MER March 2026
TenorJan-25Feb-25Apr-25Jun-25Aug-25Oct-25Dec-25Jan-26Feb-26YoY Δ (bps)
2-Year Bond11.6412.5512.0812.0812.1710.0510.0510.0510.05▼ −250
5-Year Bond12.4112.4113.1412.9413.1810.5410.5410.5410.54▼ −187
7-Year Bond9.719.719.719.719.719.719.719.719.71→ 0
10-Year Bond14.0814.0814.2614.2613.7412.4512.4511.3011.30▼ −278
15-Year Bond15.7615.7614.6314.6313.9112.0812.0812.0810.78▼ −498
20-Year Bond15.7115.2815.1114.5014.5013.5512.0212.0212.02▼ −326
25-Year Bond15.8415.8415.8414.8014.4213.1913.1913.1911.99▼ −385
Source: Table A4 — Interest Rates Structure · Bank of Tanzania MER March 2026 · bps = basis points

TANZANIA YIELD CURVE

The Tanzania government securities yield curve has undergone dramatic bull-flattening over the past twelve months. Short-end yields have collapsed by over 600 basis points while long-end yields have declined 300–500 basis points, reflecting improving macroeconomic conditions, strong liquidity in the banking system, and BoT monetary policy anchoring via the 5.75% Central Bank Rate.

// TANZANIA SOVEREIGN YIELD CURVE — Three-Period Comparison
Feb-25 · Jan-26 · Feb-26 · % per annum · All Tenors from 35-Day to 25-Year
// CURRENT YIELD SNAPSHOT — February 2026 · % per annum
35-Day
4.75
T-Bill
▼ −175bps YoY
91-Day
4.97
T-Bill
▼ −279bps YoY
182-Day
5.85
T-Bill
▼ −235bps YoY
364-Day
6.20
T-Bill
▼ −579bps YoY
2-Year
10.05
T-Bond
▼ −250bps YoY
5-Year
10.54
T-Bond
▼ −187bps YoY
7-Year
9.71
T-Bond
→ 0bps
10-Year
11.30
T-Bond
▼ −278bps YoY
15-Year
10.78
T-Bond
▼ −498bps YoY
20-Year
12.02
T-Bond
▼ −326bps YoY
25-Year
11.99
T-Bond
▼ −385bps YoY
CBR (Policy)
5.75
BoT Anchor
Q1 2026
Source: Table A4 · Bank of Tanzania MER March 2026 · CBR = Central Bank Rate (held at 5.75% for Q1 2026)

INTERBANK CASH MARKET

The interbank cash market (IBCM) continued to facilitate shilling liquidity trading among banks in February 2026. Total transaction value decreased slightly to TZS 2,796.5 billion from TZS 2,868.9 billion. The market remained dominated by 7-day transactions at 63.5 percent of total activity. The overall IBCM rate eased to 6.34 percent from 6.40 percent, consistent with adequate banking system liquidity and the CBR anchor of 5.75 percent.

Total Volume (Feb-26)
2,796.5B
TZS · ▼ from 2,868.9B Jan-26
7-Day Share
63.5%
Dominant tenor · Short-term preference
Overall IBCM Rate
6.34%
▼ from 6.40% Jan-26
Overnight Rate
6.01%
▼ from 6.13% Jan-26
7-Day Rate
6.31%
▼ from 6.34% Jan-26
Policy Rate (CBR)
5.75%
Q1 2026 · IBCM spread: +59bps
// IBCM TOTAL VOLUME & RATE TREND (Jan-25 to Feb-26)
TZS Billions (LHS) · Rate % (RHS)
// IBCM TRANSACTION STRUCTURE — Feb-26
Share by Tenor: 7-Day vs Overnight vs Other
// IBCM 7-DAY RATE vs CBR POLICY RATE — Jan-25 to Feb-26
% per annum · Upper Band (+2pp) & Lower Band (−2pp) shown

// TABLE A4 — INTERBANK CASH MARKET RATES (Jan-25 to Feb-26)

% per annum · Source: Bank of Tanzania MER March 2026
TenorJan-25Feb-25Apr-25Jun-25Aug-25Oct-25Dec-25Jan-26Feb-26MoM Δ (bps)
Overnight7.697.877.907.936.156.456.006.136.01▼ −12
2–7 Day7.748.027.987.966.526.296.306.346.31▼ −3
8–14 Day8.518.628.088.126.716.926.266.746.83▲ +9
15–30 Day8.588.778.376.956.877.076.407.066.96▼ −10
31–60 Day9.038.008.538.536.907.287.207.237.00▼ −23
61–90 Day6.757.009.119.149.149.148.119.967.00▼ −296
91–180 Day7.8710.4212.0012.007.009.758.896.757.00▲ +25
181+ Day10.9310.9310.9310.9310.9310.9310.9310.9312.00▲ +107
Overall IBCM Rate7.808.068.007.946.486.386.296.406.34▼ −6
Source: Table A4 — Interest Rates Structure · Bank of Tanzania MER March 2026 · bps = basis points
// REVERSE REPO RATE

The reverse repo rate was maintained at 5.75% throughout January and February 2026, aligned with the CBR. BoT used reverse repo operations to absorb excess shilling liquidity and steer the 7-day IBCM rate within the ±2 percentage point corridor around the CBR (3.75%–7.75%). The IBCM rate of 6.34% sits comfortably within this band, confirming the effectiveness of the current monetary policy transmission mechanism.

LENDING & DEPOSIT RATE STRUCTURE

Commercial bank interest rates remained broadly stable in February 2026, with the overall lending rate virtually unchanged at 15.11 percent. Negotiated rates for prime customers continued to compress, while the short-term interest rate spread narrowed to 5.59 percentage points — the tightest in the observed period.

// LENDING & DEPOSIT RATES — Monthly Trend (Jan-25 to Feb-26)
% per annum · Overall Lending, Negotiated Lending, Time Deposit, Negotiated Deposit
// SHORT-TERM INTEREST RATE SPREAD (Feb-25 to Feb-26)
Difference between 1-Year Lending and Deposit Rates (pp)

// TABLE 2.3.1 — LENDING AND DEPOSIT INTEREST RATES (Selected Months)

% per annum · Source: Banks and Bank of Tanzania Computations
Rate TypeFeb-25Mar-25Apr-25Dec-25Jan-26Feb-26MoM Δ (bps)
// LENDING RATES
Overall Lending Rate15.1415.5015.1615.2415.1015.11▲ +1
Short-Term Lending (Up to 1 Yr)15.7715.8316.1515.4615.4915.41▼ −8
Negotiated Lending Rate13.4212.9412.8812.3812.2512.19▼ −6
// DEPOSIT RATES
Savings Deposit Rate2.982.862.893.022.942.98▲ +4
Overall Time Deposit Rate8.138.007.828.368.338.32▼ −1
12-Month Deposit Rate9.488.149.279.589.709.82▲ +12
Negotiated Deposit Rate11.4010.3510.5211.6611.7411.48▼ −26
Short-Term Interest Rate Spread6.297.696.885.885.795.59▼ −20
Source: Table 2.3.1, Banks and Bank of Tanzania Computations · bps = basis points · pp = percentage points

TICGL MARKET ANALYSIS

TICGL's independent financial market intelligence for Tanzania's government securities and interbank markets — February 2026.

// FIVE KEY MARKET SIGNALS — TICGL RESEARCH

1. Historic Yield Compression: Short-End Has Repriced by Over 600bps. The 364-day T-bill yield has fallen from 11.99 percent (February 2025) to 6.20 percent (February 2026) — a 579 basis point decline in twelve months. The overall T-bill WAY dropped from 11.93 percent to 5.68 percent over the same period. This is among the most aggressive short-end repricing episodes in Tanzania's recent market history. Drivers include the BoT's shift to an interest-rate based monetary policy framework, excess banking system liquidity, and strong domestic investor demand for government paper.

2. Bond Market Oversubscription at 6.95x — A Structural Demand Signal. The extraordinary bid-to-offer ratio of 6.95x for the 15/25-year bond auction in February 2026 — with TZS 2,778.1 billion in bids against a TZS 399.5 billion offer — signals a deep structural demand imbalance for long-duration Tanzania sovereign debt. Pension funds, insurance companies, and commercial banks are competing aggressively for limited supply. TICGL expects the government will capitalise on this demand to gradually extend the yield curve beyond 25 years.

3. Yield Curve Inversion Alert: 7-Year Bond at 9.71% vs 15-Year at 10.78%. The 7-year government bond yields 9.71 percent — lower than the 10-year (11.30%), 15-year (10.78%), and 20-year (12.02%) bonds. This local inversion at the 7-year point is technically unusual and may reflect illiquidity in that specific tenor rather than a macroeconomic signal. The BoT may wish to conduct targeted 7-year reopening auctions to normalise the mid-curve.

4. IBCM Liquidity is Adequate — But Duration Preference is Telling. The 63.5% dominance of 7-day transactions in the IBCM reflects banks' preference for short-term liquidity management — a sign of tactical, rather than structural, liquidity needs. The overall IBCM rate of 6.34% sits 59 basis points above the CBR of 5.75%, well within the ±200bps policy corridor.

5. Interest Rate Spread Compression Creates Opportunity for Borrowers. The short-term interest rate spread narrowed to 5.59 percentage points in February 2026 — the tightest in the observed period. This compression benefits creditworthy private sector borrowers who can negotiate preferential lending rates. For TICGL's private sector clients, this creates a window to restructure existing debt at lower rates ahead of anticipated monetary policy easing cycles in 2026.

Tanzania External Sector Performance 2026 | Current Account, Exports & Imports | TICGL
Bank of Tanzania · March 2026 · External Sector

Tanzania's External
Sector Performance

A comprehensive TICGL analysis of Tanzania's engagement with the global economy — tracing the flows of goods, services, and capital that shape trade competitiveness, tourism strength, and import dependency in 2026.

Exports G&S (yr Feb-26)
$18.4Bn
▲ +12.4% YoY
Tourism Receipts
$4,352M
▲ +9.3% YoY
Gold Exports
$4,968M
▲ +35.8% YoY
Imports G&S (yr Feb-26)
$18.6Bn
▲ +9.1% YoY
Current Account Deficit
$2,108M
▼ Narrowing from $2,156M
Current Account Deficit
$2,108M
▼ Narrowed $48.1M YoY
Total Exports G&S
$18,393M
▲ +12.4% (yr Feb 2026)
Services Receipts
$7,520M
▲ +8.8% YoY
Total Imports G&S
$18,634M
▲ +9.1% (yr Feb 2026)
Service Payments
$3,355M
▲ +17.8% YoY
Current Account Balance

Tanzania's Current Account: A Narrowing Deficit

The current account deficit narrowed to USD 2,108.2 million for the year ending February 2026, compared to USD 2,156.3 million in the corresponding period of 2025 — a modest improvement of USD 48.1 million (2.2%). This improvement was powered by a strong goods export performance, particularly gold, and continued growth in tourism services receipts.

Headline Finding: Tanzania's current account deficit as a share of GDP is estimated at approximately -2.2% for 2025 — an improvement from -2.9% in 2024 and well below the -7.1% recorded during the 2022 commodity price shock. The narrowing deficit reflects improved export competitiveness, rising tourism, and softer global oil prices reducing the import bill.
Current Account Components — Year Ending February 2026 vs 2025 (USD Million)
Goods account, services account, primary income, secondary income balances
ACCOUNT STRUCTURE
Source: Bank of Tanzania — Table 2.7.1 Current Account (Year Ending February)
Current Account Deficit Trend (Annual)
USD Million — 2021 to 2026 (yr Feb)
ANNUAL TREND
Source: Table A5 — Tanzania Balance of Payments
Monthly Current Account Balance (Feb 2025–Feb 2026)
USD Million — monthly outturn
MONTHLY
Source: Bank of Tanzania — Table 2.7.1 Monthly data
Trade Flow Balance — Year Ending February 2026 (USD Million)
Goods & Services — Export vs Import Deficit: USD 241.0M
Exports $18,393M
Imports $18,634M
0$9,000M$18,000M$37,000M
GOODS ACCOUNT
-$4,407M
Exports $10,873M vs Imports $15,279M
SERVICES ACCOUNT
+$4,166M
Receipts $7,520M vs Payments $3,355M
NET CURRENT ACCOUNT
-$2,108M
▼ Improved from -$2,156M (Feb 2025)
Exports of Goods & Services

Total Exports Rose 12.4% to USD 18,393.2 Million

Tanzania's export engine fired strongly in the year to February 2026. Total goods and services exports grew 12.4% to USD 18,393.2 million, powered by a 35.8% surge in gold exports, robust tourism receipts, and manufactured goods. Goods exports alone grew 15.0%, while services exports expanded 8.8%.

Exports of Goods & Services — Category Breakdown (Year Ending Feb 2022–2026)
USD Million — Gold, Travel/Tourism, Transport, Manufactured Goods, Traditional, Other
EXPORT STRUCTURE
Source: Bank of Tanzania — Table 2.7.2 (Exports of Goods & Services) & Chart 2.7.2
Export Composition — Year Ending Feb 2026
% share of total USD 18,393M in exports
COMPOSITION
Source: Table 2.7.1 & 2.7.2 — Bank of Tanzania
Export Growth Rates by Category (YoY %)
Year ending Feb 2025 → Feb 2026
YoY GROWTH
Source: Bank of Tanzania — Computed from Table 2.7.2 data

🥇 Gold: Tanzania's Dominant Export Engine in 2026

Gold exports surged 35.8% to USD 4,968.4 million in the year to February 2026, from USD 3,658.9 million a year earlier — driven by favourable global gold prices, which averaged USD 5,019.97 per troy ounce in February 2026 (up from USD 2,894.73 in February 2025, a gain of over 73%). Gold now accounts for approximately 45.7% of total goods exports and represents Tanzania's single largest export by value. This concentration creates both opportunity (as gold prices remain elevated) and risk (vulnerability to commodity price reversals). Diversification into manufactured goods — which grew 26.1% to USD 1,705.1 million — signals an emerging shift toward value-added production.

Services Receipts by Category

Services Exports: USD 7,520.3 Million — Up 8.8%

Tanzania's services sector continued its upward trajectory in the year ending February 2026, with total receipts rising 8.8% to USD 7,520.3 million. Three categories dominate: Tourism (Travel), Transport, and Other Services. Tourism remains the crown jewel, while freight/transport income reflects Tanzania's growing role as a transit corridor for landlocked neighbours.

Services Surplus: Tanzania's services account recorded a surplus of USD 4,165.5 million in the year to February 2026 — receipts of USD 7,520.3 million against payments of USD 3,354.9 million. This services surplus is the key offset against the large goods trade deficit (USD 4,406.5 million), making the services sector Tanzania's economic stabilizer in the external accounts.
Services Receipts by Category — Year Ending February 2024, 2025 & 2026 (USD Million)
Travel (Tourism), Transport (Freight), and Other Services
SERVICES RECEIPTS
Source: Bank of Tanzania — Chart 2.7.3 & Table 2.7.1 Services Account
Services Receipts Composition — Feb 2026
% share of USD 7,520.3M total services receipts
COMPOSITION
Source: Table 2.7.1 — Bank of Tanzania Computations
Monthly Services Receipts (Feb 2025–Feb 2026)
Monthly actual — USD Million
MONTHLY TREND
Source: Bank of Tanzania — Table 2.7.1 monthly data
Services Receipts: 2025 vs 2026 Comparison
Year ending February — bars show 2025 (light) vs 2026 (solid)
YoY COMPARISON
🌍 Travel (Tourism) 2025: USD 3,981.3M → 2026: USD 4,352.3M  +9.3%
🚢 Transport (Freight) 2025: USD 2,385.4M → 2026: USD 2,726.0M  +14.3%
⚙️ Other Services 2025: USD 547.2M → 2026: USD 442.0M  -19.2%
TOTAL Services Receipts 2025: USD 6,913.9M → 2026: USD 7,520.3M  +8.8%
Tourism Analysis

Tourism: Tanzania's Largest Services Export at USD 4,352.3 Million

Tourism (Travel) remains Tanzania's largest single services export category, accounting for 57.9% of total services receipts. The year to February 2026 saw tourism receipts grow 9.3% to USD 4,352.3 million, supported by a 4.2% increase in international tourist arrivals to 2,255,006 visitors. Tanzania's world-class wildlife, Zanzibar beaches, and Kilimanjaro continue to attract high-value visitors.

Tourism Receipts Trend — Year Ending February
USD Million (2022 to 2026)
TOURISM TREND
Source: Banks & Bank of Tanzania — Chart 2.7.3
Tourist Arrivals vs Tourism Revenue (Indexed 2022=100)
Arrivals and receipts indexed — shows revenue/visitor efficiency
EFFICIENCY INDEX
Source: Bank of Tanzania — Tourist arrival and receipts data 2022–2026

🌴 TICGL Tourism Insight: Revenue per Visitor is Rising

With tourist arrivals growing 4.2% but receipts rising 9.3%, Tanzania's revenue per visitor is increasing — from approximately USD 1,758 per arrival in 2025 to an estimated USD 1,930 in 2026. This signals both higher-value tourist segments (luxury safari, premium beach) and longer average stays. TICGL identifies the tourism-adjacent investment universe — hospitality, logistics, MICE (meetings, incentives, conferences, exhibitions), and cultural tourism — as among Tanzania's highest-potential sectors for foreign direct investment in 2026–2028.

Imports of Goods & Services

Total Imports Rose 9.1% to USD 18,634.2 Million

Imports of goods and services rose to USD 18,634.2 million in the year ending February 2026, reflecting higher demand for productive inputs — industrial supplies, transport equipment, machinery, and freight services. A key positive: oil imports declined 16.6% to USD 2,110.2 million, driven by softer global petroleum prices, partially offsetting the broad import increase.

Oil Import Relief: Oil imports fell 16.6% from USD 2,529.7 million to USD 2,110.2 million — a saving of USD 419.5 million in the import bill. This directly reflects softer global crude oil prices and contributed significantly to the narrowing current account deficit. However, industrial supplies imports rose sharply to USD 5,537.6 million (+16.5%), signalling continued productive investment by Tanzania's private sector.
Imports of Goods & Services — Category Breakdown (Year Ending Feb 2022–2026)
USD Million — Industrial Supplies, Oil, Transport Equipment, Machinery, Freight, Other
IMPORT STRUCTURE
Source: Bank of Tanzania — Table 2.7.4 & Chart 2.7.4 (Imports of Goods & Services)
Import Composition — Year Ending Feb 2026
% share of total USD 18,634.2M in imports
COMPOSITION
Source: Bank of Tanzania — Table 2.7.4
Top Import Categories: 2025 vs 2026 (USD Million)
Year ending February — key import items compared
YoY COMPARISON
Source: Bank of Tanzania — Table 2.7.4
Services Payments

Services Payments: USD 3,354.9 Million — Up 17.8%

Service payments grew 17.8% to USD 3,354.9 million in the year ending February 2026, driven primarily by higher freight costs aligned with Tanzania's growing import bill. Transport (freight) payments dominate at USD 1,541.1 million, followed by Other Services at USD 1,074.6 million, and Travel at USD 739.2 million.

Freight Cost Burden: Transport/freight payments rose to USD 1,541.1 million from USD 1,406.0 million (+9.6%), tracking the 9.1% rise in total imports. As Tanzania's import volume grows — particularly in capital and industrial goods — freight costs will remain a structural component of the services payment bill. Developing Tanzania's own maritime and logistics capabilities is a key lever for reducing this outflow.
Services Payments by Category — Year Ending February 2024, 2025 & 2026 (USD Million)
Freight/Transport, Travel, and Other Services outflows
SERVICES PAYMENTS
Source: Bank of Tanzania — Chart 2.7.5 & Table 2.7.1 Services Payments
Services Receipts vs Payments — Net Balance
Year ending February 2022–2026 (USD Million)
NET SERVICES
Source: Bank of Tanzania — Table 2.7.1 Services Account
Services Payments Composition — Feb 2026
% share of USD 3,354.9M total payments
COMPOSITION
Source: Bank of Tanzania — Table 2.7.5 data
Services Payments: 2025 vs 2026 Comparison
Year ending February — bars show 2025 (light) vs 2026 (solid)
YoY COMPARISON
🚢 Transport (Freight) 2025: USD 1,406.0M → 2026: USD 1,541.1M  +9.6%
✈️ Travel 2025: USD 548.9M → 2026: USD 739.2M  +34.7%
⚙️ Other Services 2025: USD 892.8M → 2026: USD 1,074.6M  +20.4%
TOTAL Services Payments 2025: USD 2,847.6M → 2026: USD 3,354.9M  +17.8%

⚠️ Watch: Services Payments Growing Faster Than Receipts

Services payments grew at 17.8% in the year to February 2026, significantly faster than services receipts at 8.8%. While Tanzania still runs a comfortable services surplus (receipts exceed payments by USD 4,165.5M), the rate of divergence warrants monitoring. The primary driver is travel payments surging 34.7% — reflecting higher outbound travel by residents and business travelers — alongside rising freight costs and growing use of international financial, insurance, and professional services. For the services surplus to remain robust, tourism receipts must continue outpacing these growing payment outflows.

Complete Data Reference

Full External Sector Data Tables

All figures sourced directly from the Bank of Tanzania March 2026 Monthly Economic Review. Values in USD millions unless stated.

Table 1: Current Account Summary (USD Million)

ItemFeb-25Jan-26Feb-26pYr Feb 2024Yr Feb 2025Yr Feb 2026p% Change (Yr)
Goods Account (Net)-228.5-292.4-287.1-5,996.1-4,782.3-4,406.5▼ Improving -7.9%
  Goods Exports710.01,083.6965.27,794.39,451.610,872.9+15.0%
  Goods Imports938.51,376.01,252.313,790.414,233.915,279.3+7.3%
Services Account (Net)370.4305.3323.64,010.24,066.34,165.5+2.4%
  Services Receipts598.8606.8608.66,340.16,913.97,520.3+8.8%
  Services Payments228.4301.5285.02,329.92,847.63,354.9+17.8%
G&S Balance141.912.936.5-1,985.9-716.0-241.0▼ Improving -66.3%
Total Exports G&S1,308.81,690.41,573.814,134.416,365.518,393.2+12.4%
Total Imports G&S1,167.01,677.51,537.316,120.317,081.518,634.2+9.1%
Primary Income Account-162.9-199.7-218.7-1,531.6-1,971.8-2,133.0+8.2%
Secondary Income Account16.927.727.7699.6531.5265.8-50.0%
CURRENT ACCOUNT BALANCE-4.2-159.1-154.4-2,818.0-2,156.3-2,108.2▼ Improving -2.2%

Table 2: Services Receipts by Category (USD Million)

CategoryFeb-25Jan-26Feb-26pYr Feb 2024Yr Feb 2025Yr Feb 2026p% ChangeShare 2026
Travel (Tourism)———3,495.33,981.34,352.3+9.3%57.9%
Transport (Freight)———2,297.12,385.42,726.0+14.3%36.2%
Other Services———547.8547.2442.0-19.2%5.9%
TOTAL Services Receipts598.8606.8608.66,340.16,913.97,520.3+8.8%100%

Table 3: Services Payments by Category (USD Million)

CategoryFeb-25Jan-26Feb-26pYr Feb 2024Yr Feb 2025Yr Feb 2026p% ChangeShare 2026
Transport (Freight)———1,283.81,406.01,541.1+9.6%45.9%
Other Services———640.9892.81,074.6+20.4%32.0%
Travel———405.2548.9739.2+34.7%22.0%
TOTAL Services Payments228.4301.5285.02,329.92,847.63,354.9+17.8%100%

Table 4: Top Goods Exports — Year Ending February 2025 vs 2026 (USD Million)

Export ItemYr Feb 2025Yr Feb 2026pChange (USD M)% Change
Gold3,658.94,968.4+1,309.5+35.8%
Travel (Tourism)3,981.34,352.3+371.0+9.3%
Transportation2,385.42,726.0+340.6+14.3%
Manufactured Goods1,351.81,705.1+353.3+26.1%
Tobacco525.4625.7+100.3+19.1%
Cashewnuts522.3493.5-28.8-5.5%
Horticultural Products499.3465.1-34.2-6.9%
Coffee323.5403.8+80.3+24.8%
Oil Seeds297.7272.0-25.7-8.6%
Cereals328.1198.9-129.2-39.4%
TICGL Strategic Analysis

External Sector: What It Means for Tanzania's Investment Climate

TICGL's strategic interpretation of Tanzania's external sector data for investors, trade partners, and policy-focused stakeholders.

🏆
Tourism: Tanzania's Structural Competitive Advantage
Tourism receipts of USD 4,352.3 million make Tanzania one of Africa's top tourism earners. With 2,255,006 arrivals growing 4.2% and revenue up 9.3%, revenue per visitor is rising — a healthy signal for premium positioning. Investments in hospitality, eco-tourism infrastructure, and air connectivity will yield strong returns in a sector that is structurally undercapacity.
🥇
Gold Price Windfall: A One-Time Boost or New Normal?
Gold exports surged USD 1.3 billion (+35.8%) on the back of global gold prices rising from ~$2,895 to ~$5,020 per troy oz. While this is partly a price windfall, Tanzania's gold production capacity is also expanding through artisanal sector reforms. The risk: heavy gold concentration (45.7% of goods exports) creates vulnerability if prices correct. Diversification into manufactured goods (+26.1%) is the right strategic direction.
📦
Capital Goods Imports: Productive Investment Signal
Capital goods imports rose to USD 3,649.9 million (+24.1%), led by machinery, industrial transport equipment, and electrical equipment. This composition of imports — dominated by productive assets rather than consumption — is a positive signal for future output capacity. It confirms that Tanzania's private sector is investing in expansion, backed by strong credit growth (24.4%) in the banking sector.
⛵
Freight Payments: The Hidden Import Cost
Freight payments of USD 1,541.1 million represent 45.9% of all services payments and 8.3% of total goods imports — a significant cost leakage. As import volumes grow, freight costs will continue rising unless Tanzania develops stronger domestic maritime, rail, and logistics capacity. Port of Dar es Salaam expansion and the Central Corridor railway project are directly addressing this vulnerability.
📉
Narrowing CAD: Structural or Cyclical?
The current account deficit narrowed from USD 2,156.3M to USD 2,108.2M — modest improvement. The improvement is partly structural (gold export expansion, tourism growth) and partly cyclical (oil price relief saving USD 419M). The secondary income account halved to USD 265.8M due to declining remittances — a vulnerability that needs monitoring as diaspora transfers are a key balance-of-payments stabilizer.
🌐
Services Surplus: Tanzania's Balance-of-Payments Shield
Tanzania's services surplus of USD 4,165.5 million nearly offsets the entire goods deficit of USD 4,406.5 million. This is remarkable: it means Tanzania's tourism and transport services industries are functioning as a near-complete hedge against the country's trade gap in physical goods. Protecting and expanding this services surplus — primarily through tourism — is the single most important external balance policy priority.

🔭 TICGL External Sector Outlook: Key Variables for 2026

Three forces will shape Tanzania's external balance through the rest of 2026: (1) Gold prices — with prices near USD 5,020/oz, any correction would immediately impact export earnings; TICGL monitors this as the single highest-impact variable. (2) Tourism recovery momentum — with tourist arrivals growing 4.2% and revenue per visitor rising, Tanzania is well-positioned for a strong H2 2026 safari and beach season; Air Tanzania's route expansion is a direct positive catalyst. (3) Global freight rates — the Strait of Hormuz tensions cited in the BoT report are raising freight costs; any escalation increases Tanzania's services payment burden while also inflating the import bill. Net result: the current account should remain in the USD 2.0–2.2 billion deficit range for full-year 2026, broadly stable.

Zanzibar Economic Performance 2026 | Inflation, Budget & Trade | TICGL
Headline Inflation
4.8%
Feb-26 · Year-on-Year
→ Same as Feb-25
Food Inflation
9.3%
Year-on-year (Feb-26)
▲ from 5.8% Feb-25
Non-Food Inflation
1.4%
Year-on-year (Feb-26)
▼ from 4.1% Feb-25
Govt Revenue (Feb)
174.3B
TZS · 104.4% of target
▲ Above Target
Current Acct Surplus
$912.1M
Year ending Feb-26
▲ +29.2% YoY
Clove Export Value
$33.9M
Year ending Feb-26
▲ Bumper Harvest

3.1 Inflation Developments

Zanzibar's headline inflation remained stable at 4.8 percent year-on-year in February 2026 — unchanged from the same period in 2025. On a month-on-month basis the rate eased sharply to 0.5 percent from 2.3 percent in January 2026. The overall outturn masks a significant divergence: food prices are running hot at 9.3 percent, while non-food inflation has collapsed to just 1.4 percent, driven by moderation in housing, water, electricity, gas and fuel costs.

📊
Headline Inflation (Annual)
4.8%
Feb-26 · Stable vs 4.8% Feb-25 · Eased from 4.3% Jan-26
🌾
Food Inflation (Annual)
9.3%
Feb-26 · Up from 5.8% Feb-25 · Driven by seasonal pressures
🏠
Non-Food Inflation (Annual)
1.4%
Feb-26 · Down sharply from 4.1% Feb-25 · Housing & utilities eased
📅
Month-on-Month (Feb-26)
0.5%
Eased from 2.3% in Jan-26 · Food MoM flat at 0.0%
Annual Inflation Rates — Feb-25 to Feb-26
Headline, Food & Non-Food Inflation (%) · Base: July 2022=100
Select CPI Categories — Annual Change (Feb-26)
Year-on-Year Percentage Change by Main Group

Table 3.1.1 — Inflation Developments, Zanzibar

Base: July 2022=100 · Source: Office of the Chief Government Statistician
Main GroupWeight (%)MoM Feb-25MoM Jan-26MoM Feb-26Annual Feb-25Annual Jan-26Annual Feb-26
🌾 Food & Non-Alcoholic Beverages41.9−0.14.70.06.49.19.2
🍺 Alcoholic Beverages, Tobacco & Narcotics0.23.40.00.01.06.63.1
👗 Clothing & Footwear6.30.10.50.32.83.03.1
🏠 Housing, Water, Electricity, Gas & Other Fuels25.8−0.2−0.52.05.2−2.3−0.2
🛋️ Furnishings, Household Equipment & Maintenance4.80.41.80.23.63.02.8
🏥 Health1.30.00.00.0−2.01.41.4
🚗 Transport9.10.20.70.41.42.02.2
📱 Information & Communication4.20.0−0.30.03.3−0.1−0.1
🎭 Recreation, Sport & Culture1.10.0−0.10.03.44.14.1
📚 Education1.60.01.10.02.61.91.9
🍽️ Restaurants & Accommodation Services1.40.05.40.00.67.17.1
💳 Insurance & Financial Services0.50.00.00.00.00.00.0
💄 Personal Care & Miscellaneous Goods1.70.30.10.63.51.82.2
📋 All Items — Headline Inflation100.00.02.30.54.84.34.8
Selected Groups
🌾 Food (Total)40.5−0.14.80.05.89.29.3
🏙️ Non-Food59.50.00.30.94.10.41.4
Source: Office of the Chief Government Statistician · Base: July 2022 = 100

3.2 Government Budgetary Operations

Zanzibar's government revenue performance in February 2026 was broadly strong, with domestic revenue exceeding target by 4.4 percent. Tax revenue drove collections across all categories, reflecting improved administration and compliance. However, total expenditure of TZS 407.7 billion — heavily skewed toward development spending at 61.5 percent — resulted in a fiscal deficit of TZS 222.5 billion, financed entirely through borrowing.

💰 Revenue Collections — February 2026
TZS Billions · Actual vs 2026 Estimates · Source: Ministry of Finance and Planning, Zanzibar
🛃 Tax on Imports TZS 34.6B / Est. 41.2B
84.0% of estimate · Actual TZS 34.6B vs Est. 41.2B
📦 VAT & Excise (Local) TZS 29.4B / Est. 39.6B
74.2% of estimate
💼 Income Tax TZS 41.2B / Est. 16.0B
257.5% of estimate · Significant overperformance
🏷️ Other Taxes TZS 26.9B / Est. 16.0B
168.1% of estimate
📋 Non-Tax Revenue TZS 14.4B / Est. 16.0B
90.0% of estimate
🎁 Grants TZS 10.9B / Est. 2.8B
389.3% of estimate
💸 Expenditure — February 2026
TZS Billions · Actual vs 2026 Estimates · Total Expenditure: TZS 407.7B
👷 Wages & Salaries TZS 67.2B / Est. 67.2B
100.0% of estimate · On target
🔄 Other Recurrent Expenditure TZS 89.7B / Est. 95.5B
93.9% of estimate · Includes domestic debt interest
🏗️ Development Expenditure TZS 250.8B / Est. 188.0B
133.4% of estimate · 61.5% of total expenditure
Total Revenue & Grants
185.2B
TZS · 95.6% of target
Fiscal Deficit
222.5B
TZS · Financed via borrowing
⚠️ Development expenditure funded 88.3% from domestic sources
Government Revenue by Category (Feb-26 vs 2025 Actuals vs 2026 Estimates)
TZS Billions
Government Expenditure by Category (Feb-26 vs 2025 Actuals vs 2026 Estimates)
TZS Billions
Source: Ministry of Finance and Planning, Zanzibar · Note: Actual figures for 2026 are provisional. Other taxes include hotel and restaurant levies, tour operator levy, revenue stamps, airport/seaport service charges, road development fund and petroleum levy.

3.3 External Sector Performance

Zanzibar's external sector delivered an outstanding performance in the year ending February 2026, with the current account surplus surging 29.2 percent to USD 912.1 million. The improvement was driven by a combination of strong tourism receipts, record clove harvests, manufactured goods exports, and growth in seaweed production — the island's four pillars of export earnings.

⚖️
Current Account Surplus
$912.1M
Year ending Feb-26 · ▲ +29.2% from $705.9M (2025)
📤
Total Exports
$1,625M
Year ending Feb-26 · ▲ +25.5% YoY · Services 94.9%
📥
Total Imports
$743.9M
Year ending Feb-26 · ▲ +22.8% YoY · Capital goods surging
✈️
Services Receipts
$1,542.7M
Year ending Feb-26 · ▲ +22.4% YoY · Tourism dominant
Current Account Balance — 2025 vs 2026
USD Millions · Year Ending February
Monthly Current Account — Feb-25, Jan-26, Feb-26
USD Millions · Monthly Figures

Table 3.3.1 — Current Account, Zanzibar

Millions of USD · Source: Tanzania Revenue Authority, Banks & Bank of Tanzania
DescriptionFeb-25Jan-26Feb-26p2025 (Yr-Feb)2026p (Yr-Feb)% Change
Goods Account
Exports (fob)1.37.27.134.282.2▲ +140.4%
Imports (fob)40.484.064.6507.1630.7▲ +24.4%
Goods Account (Net)−39.1−76.9−57.5−472.9−548.5▼ −16.0%
Services Account
Receipts137.4166.4144.21,260.11,542.7▲ +22.4%
Payments7.913.610.298.5113.2▲ +14.9%
Services Account (Net)129.5152.8134.01,161.61,429.5▲ +23.1%
Goods & Services (Net)90.375.976.5688.7881.1▲ +27.9%
Exports of Goods & Services138.7173.6151.31,294.41,625.0▲ +25.5%
Imports of Goods & Services48.497.674.8605.7743.9▲ +22.8%
Primary Income (Net)0.70.41.415.327.7▲ +81.3%
Secondary Income (Net)0.10.20.31.93.4▲ +75.3%
CURRENT ACCOUNT BALANCE91.176.678.1705.9912.1▲ +29.2%
Source: Tanzania Revenue Authority, Banks, and Bank of Tanzania computations · p = provisional · fob = free on board

Exports of Goods

Export of goods more than doubled year-on-year to USD 82.2 million, driven almost entirely by a bumper clove harvest — Zanzibar's signature export commodity. Clove exports surged to USD 33.9 million in the year ending February 2026, with volumes rising to 5,500 tonnes at an average unit price of USD 6,157 per tonne. Manufactured goods also registered remarkable growth of 71.9 percent to USD 22.5 million.

🌿
Clove Exports: A Bumper Harvest Story
Zanzibar's clove production experienced exceptional growth in the year ending February 2026, with export value surging from USD 4.8 million to USD 33.9 million — a more-than-sixfold increase. This follows years of subdued output and reflects both improved agronomic conditions and favourable global spice pricing. The unit price rose from USD 3,979 per tonne (2025) to USD 6,157 per tonne (2026).
5,500T
Volume (2026)
$6,157
USD/Tonne
$33.9M
Export Value
Exports of Goods — Year Ending Feb-25 vs Feb-26
USD Thousands · Traditional & Non-Traditional
Clove Export: Value, Volume & Unit Price Trend
Monthly · USD & Tonnes · Feb-25 to Feb-26

Table 3.3.2 — Exports of Goods, Zanzibar

Millions of USD · Source: Tanzania Revenue Authority & Bank of Tanzania
Commodity / CategoryUnitsFeb-25Jan-26Feb-26p2025 (Yr-Feb)2026p (Yr-Feb)% Change
🌿 Traditional Exports — Clove
ValueUSD '000185.12,588.14,806.24,825.533,867.6▲ +601.6%
Volume'000 Tonnes0.00.40.71.25.5▲ +358%
Unit PriceUSD/Tonne5,858.06,901.56,859.93,978.86,156.7▲ +54.7%
🌊 Non-Traditional Exports — Seaweeds
ValueUSD '000399.811.552.63,939.25,259.5▲ +33.5%
Volume'000 Tonnes0.60.00.16.99.3▲ +35.2%
Unit PriceUSD/Tonne643.1408.2560.3570.3563.2▼ −1.3%
🏭 Manufactured GoodsUSD '000511.3867.4841.613,082.522,489.8▲ +71.9%
🐟 Fish & Fish ProductsUSD '0004.9104.365.31,858.32,246.5▲ +20.9%
🎁 Other Exports (Souvenirs, Spices)USD '000203.53,607.11,325.910,536.618,379.2▲ +74.4%
TOTAL GOODS EXPORTSUSD ('000)1,304.67,178.37,091.534,242.182,242.5▲ +140.2%
Source: Tanzania Revenue Authority and Bank of Tanzania · p = provisional · "---" denotes change exceeding 100%

Imports of Goods

Total imports of goods and services rose 22.8 percent to USD 743.9 million in the year ending February 2026. The increase was concentrated in capital goods — particularly industrial transport equipment and electrical machinery — signalling continued investment in Zanzibar's infrastructure and productive capacity. Fuel imports declined 28.5 percent, reflecting softer global petroleum prices.

Imports by Category — 2025 vs 2026
USD Millions · Year Ending February
Import Category Share — February 2026
% of Total Imports · Capital vs Intermediate vs Consumer

Table 3.3.3 — Imports of Goods, Zanzibar (Selected Lines)

Millions of USD · Source: Tanzania Revenue Authority & Bank of Tanzania
Category / ItemFeb-25Jan-26Feb-26p2025 (Yr-Feb)2026p (Yr-Feb)% Change
🏗️ Capital Goods
Machinery & Mechanical Appliances0.77.95.321.843.2▲ +98.2%
Industrial Transport Equipment0.821.78.020.643.0▲ +108.7%
Electrical Machinery & Equipment0.67.95.112.834.2▲ +167.2%
Capital Goods Total2.739.019.560.4133.1▲ +120.4%
⚙️ Intermediate Goods
Industrial Supplies6.721.616.7110.0175.1▲ +59.2%
Fuel & Lubricants16.811.510.7159.7114.2▼ −28.5%
Parts & Accessories0.81.73.115.628.5▲ +82.7%
Intermediate Goods Total32.837.035.7379.1403.8▲ +6.5%
🛍️ Consumer Goods
Food & Beverages (Household)1.21.81.817.317.9▲ +3.5%
Other Consumer Goods3.64.26.748.270.6▲ +46.5%
Consumer Goods Total5.08.19.467.693.8▲ +38.8%
TOTAL IMPORTS (f.o.b)40.484.064.6507.1630.7▲ +24.4%
Source: Tanzania Revenue Authority and Bank of Tanzania · p = provisional · f.o.b = free on board

TICGL Analytical Commentary

TICGL's independent research interpretation of Zanzibar's February 2026 economic data — covering inflation risks, fiscal dynamics, and the structural drivers of the island's external sector performance.

🔍 Five Key Observations from TICGL Research

1. Food Inflation at 9.3% Demands Targeted Policy Response. While headline inflation held steady at 4.8% year-on-year, the food component surged from 5.8% (Feb-25) to 9.3% (Feb-26). With food carrying a 41.9% weight in Zanzibar's CPI basket — the largest single category — this divergence signals acute affordability stress for lower-income households. The fall in non-food inflation to 1.4% (from 4.1%) masks the real burden being borne by food-dependent households. TICGL recommends targeted social protection measures and food supply chain interventions to address this imbalance.

2. Clove Boom Provides a Structural Window — But Diversification Remains Essential. The more-than-sixfold surge in clove export earnings (from USD 4.8M to USD 33.9M year-on-year) is transformative for Zanzibar's goods trade balance. However, agricultural commodity dependence introduces cyclical risk: clove yields are notoriously volatile due to biennial bearing patterns and weather sensitivity. TICGL advises investors and policymakers to view this as a strategic window to build agro-processing capacity, develop cold-chain infrastructure, and attract value-added spice processing investment — converting raw commodity revenues into durable industrial gains.

3. Services Sector — Tourism is the Backbone at 94.9% of Exports. Services receipts grew 22.4% to USD 1,542.7 million, with tourism (travel) overwhelmingly dominant. This dependency on tourism as the economic engine means Zanzibar remains acutely exposed to global travel disruptions, geopolitical shocks, and climate-related events. The island's resilience strategy must include diversification into MICE tourism, health tourism, and digital nomad infrastructure — all high-margin, low-seasonality segments where Zanzibar has competitive advantages.

4. Capital Goods Import Surge Signals Investment Acceleration. Capital goods imports more than doubled year-on-year (USD 60.4M → USD 133.1M), with industrial transport equipment and electrical machinery recording triple-digit growth. This surge likely reflects construction activity tied to hotel expansion, port infrastructure, and renewable energy projects. The decline in fuel imports (−28.5%) alongside rising capital goods is a positive structural signal — suggesting the economy is shifting from consumption-driven imports toward investment-driven imports, which generate productive capacity and future export capability.

5. Fiscal Deficit Management Needs Structural Attention. The TZS 222.5 billion fiscal deficit, financed entirely through borrowing, alongside development expenditure running at 133% of estimates, raises questions about expenditure control and fiscal sustainability. Positively, 88.3% of development financing was domestically sourced, reducing foreign exchange exposure. However, sustained domestic borrowing for capital spending could crowd out private sector credit if not balanced by revenue mobilisation. TICGL recommends an accelerated push to expand the non-tax revenue base — particularly through tourism levies, marine park fees, and PPP-structured infrastructure — to reduce reliance on debt financing for development.

Tanzania Lending & Deposit Interest Rates 2026 | Banking Rate Analysis | TICGL
Bank of Tanzania · March 2026 · Interest Rate Analysis

Tanzania's Lending &
Deposit Interest Rates

A forensic breakdown of Tanzania's commercial bank rate structure — what borrowers pay, what savers earn, and what the spread between them tells investors about the cost of capital in Tanzania's evolving financial landscape.

Overall Lending Rate
15.11%
Feb 2026 | ▼ -0.03pp MoM
12-Month Deposit Rate
9.82%
Feb 2026 | ▲ +0.12pp MoM
Interest Rate Spread
5.59pp
Feb 2026 | ▼ Narrowing trend
Negotiated Lending Rate
12.19%
Feb 2026 | ▼ -0.06pp MoM
Central Bank Rate (CBR)
5.75%
Q1 2026 | Held steady
Overall Lending Rate
15.11%
▼ -0.03pp from Jan 2026
12-Month Deposit Rate
9.82%
▲ +0.12pp from Jan 2026
Short-Term Spread
5.59pp
▼ Narrowed from 5.79pp
Negotiated Lending Rate
12.19%
▼ -0.06pp from Jan 2026
Savings Deposit Rate
2.98%
▲ +0.04pp from Jan 2026
Rate Snapshot — February 2026

Tanzania's Complete Interest Rate Dashboard

In February 2026, commercial banks' interest rates remained broadly stable. The overall lending rate held near 15.11%, while deposit rates inched upward — compressing the interest spread to its narrowest level in recent months. Below is the full rate landscape as reported by the Bank of Tanzania.

💳
Overall Lending
15.11%
Feb 2026
Includes all loan maturities weighted by volume
⏱️
Short-Term Lending (≤1yr)
15.41%
▼ -0.08pp MoM
Up to 1-year loan facilities
🤝
Negotiated Lending
12.19%
▼ -0.06pp MoM
Prime/large corporate borrowers
🏦
Overall Time Deposit
8.32%
▼ -0.01pp MoM
All tenors weighted average
📅
12-Month Deposit
9.82%
▲ +0.12pp MoM
Annual fixed-term deposit rate
💰
Negotiated Deposit
11.48%
▼ -0.26pp MoM
Large depositor negotiated terms
🪙
Savings Deposit
2.98%
▲ +0.04pp MoM
Standard savings accounts
📐
Short-Term Spread
5.59pp
▼ Narrowing
1-yr lending minus deposit rate
Key Context: Tanzania's Central Bank Rate (CBR) was held at 5.75% for Q1 2026. The spread between the CBR and the overall lending rate of 15.11% — a gap of approximately 9.36 percentage points — represents banks' intermediation cost and margin. The gradual compression of this gap (the short-term spread narrowed from 6.29pp in Feb 2025 to 5.59pp in Feb 2026) reflects improved monetary policy transmission and strengthening competition in Tanzania's banking sector.
Lending Rate Analysis

Lending Rates: Cost of Borrowing in Tanzania

Tanzania's overall lending rate has trended gradually downward over the past year — from 15.14% in February 2025 to 15.11% in February 2026. While the decline is modest, the trend in negotiated rates (from 13.42% to 12.19%) signals meaningful credit cost improvement for qualifying borrowers.

Lending Rate Trends — February 2025 to February 2026
Overall, Short-Term, Medium-Term, Long-Term & Negotiated Rates (%)
LENDING RATE STRUCTURE
Source: Bank of Tanzania — Table A4: Interest Rates Structure (Feb 2025–Feb 2026)
Lending Rate by Tenor — February 2026
Short-term to over 5-year loan rates compared
BY MATURITY
Source: Table A4 — Bank of Tanzania, February 2026
Overall Lending Rate: Feb 2025 vs Feb 2026
Year-on-year change in each lending category
YoY CHANGE
Source: Table A4 — Bank of Tanzania Monthly Data
Lending Rate Spectrum — February 2026
All active lending rate categories ranked lowest to highest
RATE RANKING
Negotiated (Prime)
12.19%
12.19%
Long-Term (3–5yr)
13.95%
13.95%
Term Loans (>5yr)
14.20%
14.20%
Overall Lending
15.11%
15.11%
Short-Term (≤1yr)
15.41%
15.41%
Medium-Term (2–3yr)
15.27%
15.27%
Medium-Term (1–2yr)
16.70%
16.70%
Lending Rate Insight: The 1–2 year medium-term lending rate at 16.70% is the highest across all maturities — reflecting the higher risk pricing for bridge and working capital loans. In contrast, long-term loans (3–5 years) at 13.95% are cheaper, incentivising long-term investment financing. Investors should note that negotiated rates at 12.19% are available to prime borrowers — a full 296 basis points below the overall lending rate.
Deposit Rate Analysis

Deposit Rates: What Savers Earn in Tanzania

Tanzania's deposit rate landscape shows a wide range depending on tenure and negotiation power. From as low as 2.98% on savings accounts to 11.48% on negotiated deposits, the spread in deposit rates itself reflects significant opportunity for sophisticated depositors and institutional investors.

Deposit Rate Trends — February 2025 to February 2026
Savings, 1-Month, 3-Month, 6-Month, 12-Month & Negotiated Rates (%)
DEPOSIT RATE STRUCTURE
Source: Bank of Tanzania — Table A4: Interest Rates Structure (Feb 2025–Feb 2026)
Deposit Rate by Tenor — Feb 2026
From savings to 24-month time deposits
TENOR STRUCTURE
Source: Table A4 — Bank of Tanzania
Deposit Rates: Real Return Analysis
Deposit rate minus headline inflation (3.2%) = real return
REAL RETURN
Source: Table A4 rates minus NBS headline inflation 3.2% (Feb 2026)
Deposit Rate Spectrum — February 2026
All deposit categories ranked — lowest to highest earning
DEPOSIT RANKING
Savings Account
2.98%
2.98%
1-Month Time Deposit
9.10%
9.10%
2-Month Time Deposit
9.16%
9.16%
3-Month Time Deposit
9.03%
9.03%
6-Month Time Deposit
10.26%
10.26%
12-Month Time Deposit
9.82%
9.82%
Negotiated Deposit
11.48%
11.48%

💡 Saver's Perspective: Real Returns Are Positive in Tanzania

With headline inflation at 3.2% in February 2026, Tanzania's deposit market offers genuinely positive real returns across most tenors. A 12-month time deposit at 9.82% delivers a real return of approximately +6.62% after inflation — among the most attractive in East Africa. Negotiated deposit rates at 11.48% yield a real return of +8.28%. This stands in stark contrast to many global markets where real deposit returns remain near zero or negative. For institutional investors and corporate treasury managers, Tanzania's deposit market presents a compelling case for TZS-denominated cash management.

Interest Rate Spread

The Lending–Deposit Spread: Narrowing But Still Wide

The interest rate spread — the difference between what banks charge borrowers and what they pay depositors — is a key measure of banking sector efficiency and financial inclusion. Tanzania's short-term spread narrowed from 6.29pp in February 2025 to 5.59pp in February 2026, a positive sign, but still elevated compared to mature markets.

Interest Rate Spread Trend — Feb 2025 to Feb 2026
Short-term lending vs 1-year deposit rate, and the spread between them (%)
SPREAD ANALYSIS
Source: Bank of Tanzania — Table A4 & Table 2.3.1 — Short-term interest rate spread
How the 15.11% Lending Rate Decomposes — February 2026
DECOMPOSITION
CBR 5.75%
Deposit Cost ~8.32%
Spread / Margin ~6.79pp
0%5.75%~9.5%15.11%
Short-Term Spread (Feb 2026)
5.59pp
1-yr lending (15.41%) − 12-month deposit (9.82%)
Spread 12 Months Ago (Feb 2025)
6.29pp
1-yr lending (15.77%) − 12-month deposit (9.48%)
Monthly Spread Movement (Feb 2025–Feb 2026)
Short-term interest rate spread (percentage points)
SPREAD TREND
Source: Bank of Tanzania — Table 2.3.1 & Table A4
Lending vs Deposit Rates — Head to Head
Monthly comparison showing spread compression (Feb 2025–Feb 2026)
HEAD TO HEAD
Source: Table A4 — Bank of Tanzania Monthly Data
Full Tenor Breakdown

Interest Rates Across All Maturities — Feb 2025 to Feb 2026

The full rate structure across short, medium, and long-term tenors for both lending and deposits — essential data for loan pricing, investment modeling, and financial planning in Tanzania.

Complete Rate Structure — All Tenors (Feb 2026)
Lending rates (red shades) vs Deposit rates (teal shades) by maturity bucket
FULL STRUCTURE
Source: Bank of Tanzania — Table A4, February 2026 data
Negotiated Rate Deep Dive

Negotiated Rates: The Prime Borrower Advantage

Negotiated rates represent the terms available to the most creditworthy borrowers and largest depositors. Tracking the trajectory of negotiated rates reveals the directional bias of bank pricing policy — and the premium paid by smaller, less-connected borrowers.

Negotiated Lending Rate Trend
Monthly — Feb 2025 to Feb 2026 (%)
PRIME LENDING
Source: Table A4 — Bank of Tanzania | Jan 2025: 12.80% → Feb 2026: 12.19%
Negotiated Deposit Rate Trend
Monthly — Feb 2025 to Feb 2026 (%)
PRIME DEPOSIT
Source: Table A4 — Bank of Tanzania | Feb 2025: 11.40% → Feb 2026: 11.48%

📉 The Premium Borrower Gap: 296 Basis Points

The difference between the overall lending rate (15.11%) and the negotiated rate for prime borrowers (12.19%) is 296 basis points — representing the "creditworthiness premium" that smaller or riskier borrowers pay in Tanzania. This gap has been narrowing: in January 2025 it stood at 293bp (15.73% vs 12.80%), suggesting that credit risk differentiation is becoming slightly tighter. For TICGL-advised clients, securing negotiated lending terms can save significant financing costs on large-scale investments.

Complete Data Reference

Full Interest Rate Tables — Bank of Tanzania Data

All data sourced from Bank of Tanzania Table A4 (Interest Rates Structure). All values are percentages per annum.

Table 1: Commercial Bank Lending Interest Rates (% per annum)

Rate CategoryFeb-25Mar-25Apr-25May-25Jun-25Jul-25Aug-25Sep-25Oct-25Nov-25Dec-25Jan-26Feb-26YoY Change
Overall Lending Rate15.1415.5015.1615.1815.2315.1615.0715.1815.1915.2715.2415.1015.11▼ -0.03pp
Short-Term (≤1 year)15.7715.8316.1515.9615.6915.5115.6415.5215.5015.5315.4615.4915.41▼ -0.36pp
Medium-Term (1–2 years)16.0616.5616.3316.3516.4916.4116.4516.2616.4216.4216.4216.7316.70▲ +0.64pp
Medium-Term (2–3 years)15.5316.4415.2515.2415.3815.2215.0115.1915.1315.1815.4314.9715.27▼ -0.26pp
Long-Term (3–5 years)14.0914.3213.8814.1914.3514.3914.0214.2614.2414.4314.2914.0513.95▼ -0.14pp
Term Loans (>5 years)14.2514.3614.1914.1714.2514.2814.2214.6614.6814.7914.6114.2414.20▼ -0.05pp
Negotiated Lending Rate13.4212.9412.8812.9912.6812.5612.7212.8412.4012.6112.3812.2512.19▼ -1.23pp

Table 2: Commercial Bank Deposit Interest Rates (% per annum)

Rate CategoryFeb-25Mar-25Apr-25May-25Jun-25Jul-25Aug-25Sep-25Oct-25Nov-25Dec-25Jan-26Feb-26YoY Change
Savings Deposit Rate2.982.862.892.522.902.902.902.922.932.883.022.942.98━ Unchanged
Overall Time Deposit Rate8.138.007.828.588.748.838.618.508.368.548.368.338.32▲ +0.19pp
1-Month Time Deposit9.909.887.9410.479.9011.5010.709.659.109.319.358.969.10▼ -0.80pp
2-Month Time Deposit9.028.818.789.259.8510.7510.079.2810.099.679.349.569.16▲ +0.14pp
3-Month Time Deposit9.249.429.439.8511.1210.198.599.619.389.429.709.439.03▼ -0.21pp
6-Month Time Deposit9.409.689.369.8210.2810.2810.4410.1210.0610.019.9610.2010.26▲ +0.86pp
12-Month Deposit Rate9.488.149.279.729.799.889.999.849.2110.029.589.709.82▲ +0.34pp
24-Month Deposit6.946.906.667.496.955.997.167.637.057.927.217.117.35▲ +0.41pp
Negotiated Deposit Rate11.4010.3510.5210.6411.2110.7210.9911.0511.2211.6711.6611.7411.48▲ +0.08pp

Table 3: Interest Rate Spread & Policy/Reference Rates

Rate / IndicatorFeb-25Mar-25Apr-25May-25Jun-25Jul-25Aug-25Sep-25Oct-25Nov-25Dec-25Jan-26Feb-26
Short-Term Spread (pp)6.297.696.88———————5.885.795.59
Central Bank Rate (CBR)5.305.305.305.305.305.305.304.794.794.795.755.755.75
Lombard Rate8.008.008.008.008.007.757.757.757.757.757.757.757.75
Discount Rate8.508.508.508.508.508.258.258.258.258.258.258.258.25
Overall T-Bill Rate11.9310.108.868.898.898.136.836.036.276.255.875.895.68
7-Day IBCM Rate8.028.128.007.987.947.356.486.456.386.306.296.406.34

Note: Short-term spread = Short-term lending rate (≤1yr) minus 12-month deposit rate. CBR = Central Bank Rate set by Monetary Policy Committee. Source: Bank of Tanzania Table A4 & Table 2.3.1.

TICGL Strategic Analysis

What Tanzania's Interest Rate Structure Means for You

TICGL's interpretation of the rate landscape for borrowers, investors, depositors, and businesses operating in or entering Tanzania in 2026.

📉
Lending Rates: Gradually Becoming More Affordable
The overall lending rate fell from 15.14% in Feb 2025 to 15.11% in Feb 2026 — modest but part of a structural downtrend. More significantly, the negotiated rate dropped 123 basis points (from 13.42% to 12.19%), reflecting improved credit quality, lower Treasury bill yields, and enhanced monetary policy transmission. Businesses securing investment financing now can lock in historically competitive terms.
💹
Deposit Rates: Exceptional Real Returns vs. Global Peers
With a 12-month deposit rate of 9.82% and inflation at 3.2%, Tanzania offers a real deposit return of ~6.62% — exceptionally high by international standards. For regional treasury managers and institutional investors, TZS-denominated fixed deposits represent a high-yield, relatively low-risk instrument in the East African context.
📐
Spread Compression: A Structural Improvement Signal
The short-term interest rate spread narrowed from 6.29pp (Feb 2025) to 5.59pp (Feb 2026) — a 70 basis point improvement in banking efficiency. This trend is driven by falling Treasury bill rates (from 11.93% to 5.68%), which reduces banks' alternative investment returns and forces them to compete more aggressively on deposit and lending pricing.
🏢
Prime vs. Standard: The 296bp Access Premium
The gap between the overall lending rate (15.11%) and the negotiated rate (12.19%) is 296 basis points — the "financial access premium" paid by small and medium enterprises. Reducing this gap through credit information systems, collateral reform, and development finance is central to Tanzania's financial inclusion agenda and a key priority for TICGL advisory clients.
📊
T-Bill Rate Collapse: Implications for Asset Allocation
The dramatic fall in Treasury bill yields — from 11.93% (Feb 2025) to 5.68% (Feb 2026) — fundamentally changes bank asset allocation decisions. With government securities yielding less, banks have greater incentive to lend to the private sector, contributing to the 24.4% private sector credit growth recorded in February 2026. This is a powerful tailwind for business investment.
🌍
Regional Positioning: Attractive vs. East African Peers
At 15.11%, Tanzania's overall lending rate is competitive within the EAC region, where comparable economies show similar or higher rates. The key differentiator is Tanzania's combination of relatively low inflation (3.2%), stable exchange rate, and growing banking sector depth — making the real cost of capital increasingly attractive to long-term investors.

🎯 TICGL Rate Outlook: What to Watch in 2026

Three dynamics will shape Tanzania's interest rate environment through the remainder of 2026: (1) CBR direction — the MPC held at 5.75% for Q1 2026; any future cut would accelerate lending rate compression; (2) T-Bill yield floor — at 5.68%, Treasury bill rates are near the CBR floor, limiting further decline and setting a minimum for bank deposit pricing; (3) Private sector credit demand — with credit growing at 24.4%, rising loan demand could provide upward pressure on lending rates, counteracting monetary easing. Net effect: rates likely to remain broadly stable in 2026, with negotiated rates continuing their gradual downward trend.

Tanzania Domestic Debt 2026: Government Debt by Creditor Category | TICGL
Total Domestic Debt
TZS 38.78T
February 2026
▲ +0.5% MoM
Commercial Banks
27.9%
TZS 10.83T
▼ from 28.8%
Pension Funds
27.0%
TZS 10.46T
▲ from 26.7%
Bank of Tanzania
19.3%
TZS 7.47T
→ Stable
Treasury Bonds Share
80.8%
TZS 31.33T
▲ from 79.6%
Domestic Debt Service
875.2B
TZS Feb-26
Principal + Interest

Domestic Debt by Creditor Category

Tanzania's domestic government debt is held across five major creditor groups. Commercial banks and pension funds collectively account for over 54 percent of all domestic obligations, making them the principal financiers of the government's domestic borrowing programme. The Bank of Tanzania maintains a significant monetary financing role at 19.3 percent.

🏦
Commercial Banks
27.9%
TZS 10,834.3B
↓ from 28.8% (Feb-25) · Largest single holder
🏛️
Pension Funds
27.0%
TZS 10,463.9B
↑ from 26.7% (Feb-25) · Long-term investors
🏧
Bank of Tanzania
19.3%
TZS 7,468.4B
↓ from 20.1% (Feb-25) · Monetary authority
🛡️
Insurance Companies
5.1%
TZS 1,983.5B
↓ from 5.4% (Feb-25) · Regulatory holders
🏢
BOT Special Funds
2.0%
TZS 757.8B
↑ from 1.6% (Feb-25) · BoT managed funds
🌐
Others
18.8%
TZS 7,273.8B
Incl. public institutions, private companies, individuals, non-residents
Creditor Share — February 2026
% of Total Domestic Debt Stock (TZS 38.78T)
Creditor Share — February 2025 vs February 2026
Year-on-Year Comparison (%)
Creditor Holdings — Three-Period Snapshot: Feb-25, Jan-26, Feb-26
TZS Billions · Grouped by Creditor

Table 2.6.6 — Government Domestic Debt by Creditor Category

TZS Billions · Source: Ministry of Finance & Bank of Tanzania
CreditorFeb-25 (TZS B)Feb-25 ShareJan-26 (TZS B)Jan-26 ShareFeb-26 (TZS B)Feb-26 ShareYoY Change (TZS B)YoY Δ Share (pp)
🏦 Commercial Banks9,791.428.8%10,902.528.2%10,834.327.9%+1,042.9−0.9pp
🏛️ Pension Funds9,097.226.7%10,389.526.9%10,463.927.0%+1,366.7+0.3pp
🏧 Bank of Tanzania6,847.520.1%7,436.019.3%7,468.419.3%+620.9−0.8pp
🛡️ Insurance Companies1,852.35.4%2,005.05.2%1,983.55.1%+131.2−0.3pp
🏢 BOT Special Funds552.71.6%737.81.9%757.82.0%+205.1+0.4pp
🌐 Others5,872.817.3%7,128.918.5%7,273.818.8%+1,401.0+1.5pp
📋 TOTAL DOMESTIC DEBT34,014.1100%38,599.6100%38,781.7100%+4,767.6—
Source: Ministry of Finance and Bank of Tanzania · p = provisional · BOT = Bank of Tanzania · pp = percentage points

Domestic Debt by Borrowing Instruments

The instrument breakdown reveals a strong preference for long-term Treasury bonds, which now constitute over 80 percent of the domestic debt portfolio. This reflects the government's deliberate strategy to reduce rollover risk and extend the maturity profile of its domestic obligations — a favourable development for debt sustainability.

80.8%
📜 Treasury Bonds share (Feb-26)
4.3%
📄 Treasury Bills share
14.6%
🔄 Non-Securitised Debt (Overdraft)
TZS 182B
📉 Net change in T-Bills (MoM)
Instrument Share — February 2026
% of Total Domestic Debt
Treasury Bonds vs Treasury Bills — Value Trend
TZS Billions · Feb-25, Jan-26, Feb-26

Table 2.6.5 — Government Domestic Debt by Borrowing Instruments

TZS Billions · Source: Ministry of Finance & Bank of Tanzania
InstrumentFeb-25 (TZS B)Feb-25 ShareJan-26 (TZS B)Jan-26 ShareFeb-26 (TZS B)Feb-26 ShareYoY Change (TZS B)
📜Government Securities29,108.285.6%32,972.385.4%33,122.085.4%+4,013.8
Treasury Bills1,847.45.4%1,821.44.7%1,653.04.3%−194.4
Government Stocks187.10.6%135.70.4%135.70.4%−51.4
Government Bonds27,073.779.6%31,015.180.4%31,333.280.8%+4,259.5
Tax Certificates0.10.0%0.10.0%0.10.0%0.0
🔄Non-Securitised Debt4,905.914.4%5,627.314.6%5,659.714.6%+753.8
Overdraft (BoT)4,887.514.4%5,627.214.6%5,659.614.6%+772.1
Other Liabilities18.40.1%0.00.0%0.00.0%−18.4
📋 TOTAL (excl. liquidity papers)34,014.1100%38,599.6100%38,781.7100%+4,767.6
Source: Ministry of Finance and Bank of Tanzania · p = provisional · Excludes liquidity papers

TICGL Analytical Commentary

TICGL's independent interpretation of Tanzania's February 2026 domestic debt creditor data — highlighting structural trends, investment implications, and policy risks.

💡 Five Key Observations from TICGL Research

1. Pension Funds Overtaking Commercial Banks as Dominant Creditors. The gap between commercial bank holdings (27.9%) and pension fund holdings (27.0%) has narrowed sharply over the review period. In February 2025, commercial banks held 28.8% versus pension funds' 26.7% — a gap of 2.1 percentage points. By February 2026, the gap has compressed to just 0.9 percentage points. At current trends, pension funds are positioned to become Tanzania's largest domestic creditor within 12–18 months. This structural shift has important implications for investment regulation, duration management, and the broader pension sector's exposure to sovereign risk.

2. BoT Overdraft Growth Demands Monitoring. The Bank of Tanzania's overdraft to the government stands at TZS 5,659.6 billion — a TZS 772.1 billion increase year-on-year. This form of quasi-monetary financing, while institutionally managed, can create inflationary pressure if sustained at elevated levels. The TZS 5.66 trillion overdraft now represents 14.6% of total domestic debt, unchanged from January 2026 but materially higher than historical averages. Investors should track this figure closely as a proxy for fiscal pressure on the central bank.

3. Treasury Bond Dominance Signals Improved Debt Structure. Government bonds now account for 80.8% of all domestic debt (up from 79.6% in Feb-25), reflecting the Treasury's continued preference for long-duration instruments. The near-elimination of short-term T-Bills in the financing mix (T-Bills fell from 5.4% to 4.3% of total debt year-on-year) reduces rollover risk and aligns the domestic debt profile with international best practices for debt sustainability.

4. "Others" Category Expanding — A Diversification Signal. The "Others" creditor group — comprising public institutions, private companies, individuals, and non-residents — grew its share from 17.3% (Feb-25) to 18.8% (Feb-26), adding TZS 1.4 trillion in holdings year-on-year. This is the fastest-growing creditor category in absolute terms, likely reflecting increased retail and non-resident participation in Tanzania's domestic bond market. TICGL views this as a positive diversification trend, reducing the government's reliance on captive institutional buyers.

5. Insurance Sector's Declining Share — A Regulatory Watch Point. Insurance companies' share declined from 5.4% to 5.1% year-on-year. While absolute holdings grew slightly (TZS 1,852B to TZS 1,984B), the relative decline suggests insurance firms may be rebalancing their portfolios away from government securities — potentially toward equities or real estate. Regulators and policymakers should monitor whether this trend reflects portfolio diversification (healthy) or liquidity stress (concerning) within the insurance sector.

Tanzania External Debt Analysis 2026 | BoT Monthly Economic Review | TICGL
Total External Debt Stock
$35.86B
▼ 0.1% MoM
Feb-26 provisional
Central Govt Share
82.4%
→ Stable
USD 29.56B disbursed
Private Sector Share
16.1%
▲ Slight uptick
USD 5.77B disbursed
USD Denomination
66.0%
→ Stable
Dominant currency
Monthly Disbursements
$83.8M
▼ vs $143.5M Jan
Mainly to central govt
Debt Service Payments
$98.9M
→ Feb-26
$35.4M principal

External Debt Stock by Borrower

Tanzania's external debt is overwhelmingly concentrated in the central government, which accounts for over 82 percent of the total disbursed outstanding debt. The private sector contributes the remaining 16 percent, while public corporations have exited their external obligations entirely.

🏛️
Central Government Dominance
At USD 29.56B (82.4%), central government external debt remains the cornerstone of Tanzania's external obligation, primarily funding infrastructure and development projects.
🏢
Private Sector Participation
Private sector external debt stands at USD 5.77B (16.1%). A modest increase from January 2026 signals growing private sector access to external capital markets.
⚠️
Interest Arrears
Interest arrears on central government debt stand at USD 80.2M, while private sector arrears total USD 444.5M — flagging pockets of debt service stress in the private sector.
Disbursed Outstanding Debt by Borrower
USD Millions · February 2026
Borrower Share Trend (Feb-25 → Feb-26)
Percentage of Total External Debt

Table 2.6.1 — External Debt Stock by Borrower

Millions of USD · Source: Ministry of Finance & Bank of Tanzania
Borrower CategoryFeb-25 AmountFeb-25 ShareJan-26 AmountJan-26 ShareFeb-26 AmountFeb-26 ShareChange (MoM)
Central Government
Disbursed Outstanding Debt26,317.129,606.929,560.2▼ 46.7
Interest Arrears77.380.380.2▼ 0.1
Central Govt Subtotal26,394.429,687.229,640.4▼ 46.8
Private Sector
Disbursed Outstanding Debt5,827.25,770.35,774.3▲ 4.0
Interest Arrears562.8434.3444.5▲ 10.2
Private Sector Subtotal6,389.96,204.76,218.7▲ 14.0
Public Corporations
Disbursed Outstanding Debt3.80.00.0—
TOTAL EXTERNAL DEBT STOCK32,788.035,891.935,859.1▼ 32.8
Source: Ministry of Finance and Bank of Tanzania · p = provisional data · DOD = Disbursed Outstanding Debt

Disbursed Outstanding Debt by Use of Funds

Understanding where external borrowings are channelled reveals Tanzania's development priorities and capital allocation choices. The sectoral breakdown shows continued emphasis on balance of payments support, transport infrastructure, and social services — collectively representing over 63 percent of all disbursed external debt.

🚗
Transport Leads in Infrastructure
Transport & Telecommunication holds the second-largest share at 21.9% (USD 7.74B), reflecting Tanzania's continued push to modernise its road, rail, and connectivity networks.
📚
Social Welfare at 19.3%
USD 6.83B committed to social welfare and education — signalling strong multilateral partnerships channelled toward human capital development and social protection programmes.
⚡
Energy Declines Slightly
Energy & Mining fell from 13.1% (Feb-25) to 12.0% (Feb-26), suggesting a moderation in energy sector borrowings or reclassification of some project financing.
Debt by Use of Funds — Feb-26
Percentage Share of Total Disbursed Outstanding Debt
Use of Funds Share: Feb-25 vs Feb-26
Comparative Percentage — Year-on-Year
Use of Funds — Visual Share Breakdown (February 2026)
Percentage of Total Disbursed Outstanding Debt · USD 35.33B Base

Source: Ministry of Finance and Bank of Tanzania · Table 2.6.3

Table 2.6.3 — Disbursed Outstanding Debt by Use of Funds

Percentage Share · Source: Ministry of Finance & Bank of Tanzania
Activity / SectorFeb-25 (%)Jan-26 (%)Feb-26 (%)YoY Change (pp)Trend
BoP & Budget Support20.922.622.5▲ +1.6pp⬆️
Transport & Telecommunication21.221.821.9▲ +0.7pp⬆️
Social Welfare & Education20.019.419.3▼ −0.7pp⬇️
Energy & Mining13.112.012.0▼ −1.1pp⬇️
Real Estate & Construction4.84.94.9▲ +0.1pp→
Finance & Insurance4.53.53.5▼ −1.0pp⬇️
Agriculture4.85.35.3▲ +0.5pp⬆️
Industries3.63.73.7▲ +0.1pp→
Tourism1.61.81.8▲ +0.2pp⬆️
Other5.54.94.9▼ −0.6pp⬇️
TOTAL100.0100.0100.0——
Source: Ministry of Finance and Bank of Tanzania · p = provisional · BoP = Balance of Payments · pp = percentage points

Disbursed Outstanding Debt by Currency Composition

Currency composition of external debt is a critical determinant of exchange rate risk exposure. Tanzania's debt portfolio is heavily weighted toward the US dollar, creating vulnerability to shilling depreciation. The moderate presence of the Euro and Chinese Yuan adds diversification but also multiplies the channels through which currency movements can inflate debt servicing costs.

🇺🇸
US Dollar (USD)
66.0%
Stable · was 67.6% in Feb-25
~USD 23.3B equivalent
🇪🇺
Euro (EUR)
17.7%
Rising · was 16.7% in Feb-25
~USD 6.26B equivalent
🇨🇳
Chinese Yuan (CNY)
6.5%
Stable · was 6.3% in Feb-25
~USD 2.31B equivalent
🌍
Other Currencies
9.8%
Stable · was 9.3% in Feb-25
~USD 3.45B equivalent
Currency Composition — February 2026
Share of Total Disbursed Outstanding Debt
Currency Share Trend (Feb-25 → Feb-26)
Year-on-Year Shift in Currency Composition (%)

Table 2.6.4 — Disbursed Outstanding Debt by Currency Composition

Percentage Share · Source: Ministry of Finance & Bank of Tanzania
CurrencyFeb-25 (%)Jan-26 (%)Feb-26 (%)YoY Change (pp)Estimated Value (USD B, Feb-26)Risk Profile
🇺🇸 United States Dollar67.665.966.0▼ −1.6pp~23.3⚠ High FX Risk
🇪🇺 Euro16.717.717.7▲ +1.0pp~6.3⚠ Moderate Risk
🇨🇳 Chinese Yuan6.36.56.5▲ +0.2pp~2.3✓ Managed
🌍 Other Currencies9.39.89.8▲ +0.5pp~3.5ℹ Diversified
TOTAL100.0100.0100.0—~35.3—
Source: Ministry of Finance and Bank of Tanzania · r = revised · p = provisional · pp = percentage points · Estimated values based on total disbursed outstanding debt of USD 35.33B

External Debt Monthly Trend

Tracking the evolution of Tanzania's external debt stock over the 13-month period from February 2025 to February 2026 reveals a broadly rising trajectory — punctuated by large disbursement events linked to project financing — and a modest contraction in the most recent period.

Total External Debt Stock — Monthly Trend (Feb-25 to Feb-26)
USD Millions · Disbursed Outstanding Debt (DOD)
Monthly Disbursements
USD Millions
Debt Service: Principal & Interest
USD Millions

Monthly External Debt Summary — Feb-25 to Feb-26

Millions of USD · Source: Table A10, Bank of Tanzania MER March 2026
PeriodTotal DODCentral GovtPrivate SectorDisbursementsDebt ServiceNet Flows
Source: Table A10, Bank of Tanzania Monthly Economic Review, March 2026 · DOD = Disbursed Outstanding Debt

TICGL Analytical Commentary

Drawing on the Bank of Tanzania's official data, TICGL provides the following investment and policy-relevant interpretations of Tanzania's February 2026 external debt position.

1. USD Concentration Remains the Primary Vulnerability. With 66 percent of external debt denominated in US dollars, Tanzania's debt servicing costs are acutely sensitive to TZS/USD exchange rate movements. The shilling depreciated by approximately 3.14 percent year-on-year in February 2026, adding pressure to debt repayment in local currency terms. Investors and policymakers should monitor the Federal Reserve's rate trajectory, as any sustained USD strengthening would mechanically increase Tanzania's external debt burden in shilling terms.

2. Rising Euro Share Adds EUR Risk Exposure. The Euro's share has risen from 16.7% (Feb-25) to 17.7% (Feb-26), reflecting new disbursements likely tied to EU-funded development projects. While the EUR provides some natural diversification from the USD, ECB policy cycles can diverge from Tanzania's domestic monetary conditions, creating basis risk in debt servicing. TICGL recommends that the government maintain hedging contingency plans and track EUR/TZS movements in budgetary frameworks.

3. BOP Support Dominance Signals Structural Financing Gaps. With 22.5% of all disbursed debt allocated to BoP and budget support, Tanzania continues to rely on external borrowing to bridge fiscal shortfalls — a pattern that warrants attention as interest obligations grow. Investors should note that this category of borrowing, while stabilising in the short term, contributes limited productive capacity growth. A gradual reorientation toward project-tied financing in productive sectors (energy, manufacturing, agriculture) would improve the debt-to-GDP growth ratio.

4. Private Sector Arrears Deserve Close Monitoring. Private sector interest arrears of USD 444.5 million represent a 21% increase from USD 562.8 million in February 2025 — trending downward, which is positive — but at 7.7% of total private sector external debt, they indicate pockets of financial distress. Enhanced credit risk frameworks and Bank of Tanzania oversight of private sector external borrowings are advised to prevent systemic spillovers.

5. Chinese Yuan Exposure Is Modest but Strategic. CNY-denominated debt at 6.5% (~USD 2.3B) is largely linked to Chinese bilateral and commercial loans for infrastructure. While modest in share, this exposure is significant in the context of Tanzania-China bilateral economic relations. Project implementation timelines and associated drawdown schedules for SGRC and SGR-linked financing should be tracked through PPPC and MoF channels.

External Debt Key Ratios — Historical Perspective
Tanzania External Debt Stock 2018–2026 · Millions of USD
Source: Table A1 — Selected Economic Indicators, Bank of Tanzania · 2025p = provisional
Tanzania Government Budgetary Operations 2026 | Central Revenue & Expenditure | TICGL
Bank of Tanzania · March 2026 · Fiscal Analysis

Tanzania Central Government
Revenue & Expenditure

"A forensic breakdown of Tanzania's budgetary operations — how much the government collected, what it spent, and what the numbers reveal about fiscal health and investment climate in 2026."

📅 Reporting Period: January 2026 💰 Total Revenue: TZS 3,340.2 Bn 🏛️ Total Expenditure: TZS 3,751.7 Bn 📊 Source: Bank of Tanzania
Total Revenue (Jan 2026)
3,340.2
Bn TZS ▲ +5.4% vs target
Tax Revenue (Jan 2026)
2,762.3
Bn TZS ▲ +7.1% vs target
Total Expenditure (Jan 2026)
3,751.7
Bn TZS — Recurrent + Dev
Development Expenditure
1,061.8
Bn TZS (28.3% of total)
Non-Tax Revenue
394.1
Bn TZS — 87.9% of target
Central Government Revenue

How Much Did Tanzania Collect in January 2026?

Domestic revenue collections in January 2026 remained robust at TZS 3,340.2 billion — surpassing the monthly target by 5.4%. Central Government revenue alone reached TZS 3,156.4 billion, reflecting strengthened tax administration and improved taxpayer compliance across all major categories.

Headline Result: Total domestic revenue of TZS 3,340.2 billion exceeded the January 2026 target by 5.4%. Central Government revenue of TZS 3,156.4 billion was driven primarily by tax revenue at TZS 2,762.3 billion — beating its target by 7.1%. Only non-tax revenue fell short, reaching 87.9% of its target at TZS 394.1 billion.
Central Government Revenue: Actuals vs Estimates vs Prior Year (January)
Billions of TZS — All revenue categories side-by-side
REVENUE COMPARISON
Source: Ministry of Finance, Bank of Tanzania — Table A2 & Chart 2.5.1
Revenue Performance vs Monthly Target — January 2026
Actual collected as % of the monthly target for each category
TARGET ACHIEVEMENT
Taxes on Imports TZS 1,072.95 Bn  |  Target: 977.16 Bn  |  +9.8% above target
Income Tax TZS 850.79 Bn  |  Target: 747.08 Bn  |  +13.9% above target
VAT & Excise on Local Goods TZS 622.57 Bn  |  Target: 661.39 Bn  |  -5.9% below target
Other Taxes TZS 216.02 Bn  |  Target: 193.31 Bn  |  +11.7% above target
Non-Tax Revenue TZS 394.05 Bn  |  Target: 909.72 Bn  |  -56.7% below target
Source: Ministry of Finance, Bank of Tanzania — January 2026 Budget Operations. Note: Full-year budget non-tax target is TZS 4,681.7 Bn; single-month target shown here is proportional estimate.
Revenue Composition — January 2026
Share of each revenue category in total collections
COMPOSITION
Source: Bank of Tanzania — Table A2 Computations
Revenue Growth Trend — Jul 2025 to Jan 2026 (Cumulative)
Monthly cumulative actual vs estimate (Bn TZS)
YTD TREND
Source: Ministry of Finance — Table A2 (July–January 2026 YTD)
Tax Revenue Analysis

Tax Revenue: TZS 2,762.3 Billion — 7.1% Above Target

Tanzania's tax performance in January 2026 demonstrates the effectiveness of ongoing TRA reforms and digital tax administration systems. Three of four tax categories exceeded their monthly targets, led by a strong surge in income tax collections.

Tax Revenue by Category — 3-Year January Comparison
Jan 2025 Actual vs Jan 2026 Estimate vs Jan 2026 Actual (Bn TZS)
3-YEAR VIEW
Source: Ministry of Finance — Chart 2.5.1 data
Tax Revenue YoY Growth by Category
% change between January 2025 actual and January 2026 actual
YoY GROWTH
Source: Ministry of Finance — Bank of Tanzania Computations

📊 TICGL Revenue Intelligence: What's Driving Tax Outperformance?

Income tax collections grew robustly year-on-year, outpacing the target by 13.9% — reflecting broad-based expansion in formal sector employment, buoyant private sector credit (up 24.4%), and the Bank's specialized credit facilities for SMEs that are widening the taxable base. Import duties at +9.8% above target signal sustained trade momentum and rising import values, particularly in capital goods and industrial supplies. These trends suggest tax buoyancy above 1.0 — meaning tax revenue is growing faster than the economy, a positive signal for fiscal sustainability.

Annual Full-Year Tax Revenue Progress — FY 2025/26 (July–January)
Actual collected vs full-year budget target. 7 months into the fiscal year.
ANNUAL PROGRESS
Total Tax Revenue
Actual: TZS 20,302.6 BnBudget: TZS 32,176.0 Bn63.1% achieved
Taxes on Imports
TZS 7,171.7 BnBudget: TZS 11,563.0 Bn62.0% achieved
Income Tax
TZS 8,004.0 BnBudget: TZS 11,367.9 Bn70.4% achieved
VAT & Excise (Local)
TZS 3,774.1 BnBudget: TZS 7,016.5 Bn53.8% achieved
Other Taxes
TZS 1,352.7 BnBudget: TZS 4,887.7 Bn27.7% achieved
Source: Table A2 — 7-month cumulative actuals against FY 2025/26 annual budget target
Non-Tax Revenue

Non-Tax Revenue: TZS 394.1 Billion — Below Target at 87.9%

Non-tax revenue in January 2026 reached TZS 394.1 billion — falling short of the monthly target by 12.1%. This performance reflects timing differences in fee collection and payments from state-owned enterprises, though it remains substantially higher than the TZS 347.8 billion collected in January 2025.

Context: Non-tax revenue shortfalls are common in Tanzania's January period, partly due to the timing of dividends, license renewals, and government service fees. Despite the miss against the monthly target, year-on-year non-tax revenue for January grew by 13.3% compared to TZS 347.8 billion in January 2025, indicating underlying structural improvement.
Non-Tax Revenue vs Tax Revenue Share
Proportional contribution to total Central Government revenue (Jan 2026)
REVENUE MIX
Source: Ministry of Finance — Table A2 January 2026 data
Non-Tax Revenue: Actual vs Target vs Prior Year
January period comparison (Bn TZS)
NON-TAX TREND
Source: Ministry of Finance — Table A2 & Chart 2.5.1
Government Expenditure

Total Expenditure: TZS 3,751.7 Billion in January 2026

The Government continued to align spending with available resources. Total expenditure of TZS 3,751.7 billion was split between recurrent commitments (TZS 2,689.9 billion, 71.7%) and development investment (TZS 1,061.8 billion, 28.3%), maintaining a consistent focus on infrastructure and capital formation.

Expenditure Balance: The revenue-expenditure gap in January 2026 was TZS 411.5 billion (before grants), financed through a mix of domestic and foreign borrowing. After grants of TZS 3,548 million, the overall balance stood at TZS -107.2 billion, financed primarily through domestic securities issuance and foreign project loans.
Central Government Expenditure: Actuals vs Estimates vs Prior Year (January)
Billions of TZS — Wages, Interest, Other Recurrent & Development
EXPENDITURE BREAKDOWN
Source: Ministry of Finance, Bank of Tanzania — Chart 2.5.2 & Table A2 (Provisional 2026 figures)
Expenditure Composition — January 2026
% share of total TZS 3,751.7 Bn spent
COMPOSITION
Source: Ministry of Finance — Table A2 January 2026
Recurrent vs Development Expenditure Trend
Monthly actual split — July 2025 to January 2026 (Bn TZS)
TREND
Source: Ministry of Finance — Table A2 Monthly breakdown
Development vs Recurrent Split

What Is Tanzania's Government Spending Money On?

Understanding the composition of government spending is crucial for investors. A higher development expenditure ratio signals infrastructure expansion, while the recurrent structure reveals fiscal rigidity and the cost of running government operations.

Expenditure Waterfall — January 2026 vs January 2025 vs Budget Estimate
All four expenditure lines stacked for comparative view (Bn TZS)
WATERFALL COMPARISON
Source: Ministry of Finance, Bank of Tanzania — Table A2

🔍 Recurrent Expenditure: What Makes Up TZS 2,689.9 Billion?

Of total recurrent spending, wages & salaries accounted for TZS 1,097.5 billion (40.8%), interest payments for TZS 492.6 billion (18.3%), and other goods, services, and transfers TZS 1,099.9 billion (40.9%). Interest payments of TZS 492.6 billion (down from an estimate of TZS 548.2 billion) reflect better-than-projected debt servicing conditions — partly supported by declining Treasury bill yields, which fell from 11.93% in February 2025 to 5.68% in February 2026.

Recurrent Expenditure Sub-Components
January 2026 — Bn TZS breakdown of TZS 2,689.9 Bn
RECURRENT DETAIL
Source: Table A2 — Wages, Interest (domestic + foreign), Other goods & services
Interest Payments: Domestic vs Foreign (Jul 2025–Jan 2026)
Stacked monthly interest cost (Bn TZS)
DEBT SERVICE
Source: Table A2 — Interest payments (domestic: TZS 385.99 Bn; foreign: TZS 106.57 Bn)
Development Expenditure: Local Funding vs Foreign Funding (Jul–Jan 2026)
How development projects are financed — domestic vs external resources (Bn TZS)
DEV FINANCING
Source: Ministry of Finance — Table A2 (Local dev: TZS 801.0 Bn; Foreign dev: TZS 260.7 Bn in Jan 2026)
Year-to-Date Performance

7-Month Fiscal Year Progress: July 2025 – January 2026

Cumulative performance against the full-year FY 2025/26 budget provides a clearer picture of fiscal trajectory and whether Tanzania is on track to meet its annual revenue and expenditure targets.

Cumulative Revenue vs Expenditure vs Budget (Jul 2025 – Jan 2026)
Actuals vs 7-month pro-rated estimates vs full-year budget (Bn TZS)
YTD OVERVIEW
Source: Ministry of Finance — Table A2 (YTD: July–January 2026)
✅
Revenue: TZS 24,596.3 Bn Collected (7 Months)
Cumulative actual revenue of TZS 24,596.3 billion exceeded the 7-month estimate of TZS 23,806.5 billion — an outperformance of 3.3%. This is 60.8% of the full-year budget target of TZS 40,466.1 billion, broadly on track for a fiscal year with 7 of 12 months complete (58.3%).
⚠️
Expenditure: TZS 27,511.4 Bn Spent (7 Months)
Cumulative actual expenditure of TZS 27,511.4 billion was below the 7-month estimate of TZS 29,051.0 billion — an underspend of 5.3%. This may reflect project implementation delays in development expenditure, which has been a recurring pattern in Tanzania's fiscal execution.
📉
Development Spending: TZS 9,557.9 Bn (7 Months)
Development expenditure of TZS 9,557.9 billion was 86.5% of the 7-month estimate of TZS 11,052.9 billion. This underspend is partly due to slower disbursement of foreign project loans (TZS 1,906.9 Bn actual vs TZS 2,974.8 Bn estimate), which warrants monitoring for project delivery timelines.
🏦
Financing: Domestic vs Foreign Mix
Net foreign financing of TZS 1,697.3 billion was below the estimate of TZS 2,014.8 billion, while net domestic financing of TZS 1,845.1 billion was below the TZS 2,636.3 billion estimate — indicating lower-than-planned borrowing overall, a positive signal for debt sustainability.
Data Tables

Complete Budget Data — Full Reference Tables

All figures sourced directly from the Bank of Tanzania March 2026 Monthly Economic Review, Table A2 (Central Government Operations). All values in Billions of TZS unless stated.

Table 1: Central Government Revenue — January 2026 (Billions of TZS)

Revenue CategoryFY 2025/26 Annual BudgetJul–Jan 2026 EstimateJul–Jan 2026 ActualJan 2026 EstimateJan 2026 ActualJan 2025 ActualYoY Changevs Target
Total Revenue (incl. LGAs)40,466.123,806.524,596.33,624.13,340.2——+5.4% ▲
Central Govt Revenue36,857.722,821.223,638.53,488.73,156.4———
Total Tax Revenue32,176.018,518.220,302.62,578.92,762.3—+9.9% ▲+7.1% ▲
  Taxes on Imports11,563.06,884.77,171.7977.21,073.0839.4+27.8% ▲+9.8% ▲
  Income Tax11,367.96,378.78,004.0747.1850.8677.7+25.5% ▲+13.9% ▲
  VAT & Excise (Local Goods)7,016.53,866.03,774.1661.4622.6553.0+12.6% ▲-5.9% ▼
  Other Taxes4,887.71,388.91,352.7193.3216.0152.3+41.8% ▲+11.7% ▲
Non-Tax Revenue4,681.74,303.03,335.9909.7394.1347.8+13.3% ▲-56.7% ▼
LGA Own Sources1,680.5985.3957.8135.4183.8——+35.7% ▲
Grants1,069.9577.2511.186.83.5——-96.0% ▼

Table 2: Central Government Expenditure — January 2026 (Billions of TZS)

Expenditure CategoryFY 2025/26 Annual BudgetJul–Jan 2026 EstimateJul–Jan 2026 ActualJan 2026 EstimateJan 2026 ActualJan 2025 ActualYoY Change
Total Expenditure48,775.029,051.027,511.44,146.03,751.7——
Recurrent Expenditure31,281.317,998.117,953.52,694.82,689.9—71.7% of total
  Wages & Salaries10,917.57,581.77,590.51,101.41,097.5942.5+16.4% ▲
  Interest Payments (Total)6,493.73,655.73,174.9548.2492.6375.1+31.3% ▲
    of which: Domestic3,697.32,153.32,149.7373.8386.0——
    of which: Foreign2,796.41,502.51,025.2174.4106.6——
  Other Goods, Services & Transfers7,088.66,760.77,188.11,045.11,099.91,040.4+5.7% ▲
Development Expenditure17,493.711,052.99,557.91,451.21,061.71,218.1-12.8% ▼
  Local Development12,117.88,078.17,651.0934.2801.0——
  Foreign-Funded Development5,375.92,974.81,906.9517.1260.7——

Table 3: Fiscal Balance & Financing — January 2026 (Billions of TZS)

ItemFY BudgetJul–Jan EstimateJul–Jan ActualJan EstimateJan Actual
Balance Before Grants-8,308.9-5,244.5-2,915.0-522.0-411.5
Grants1,069.9577.2511.186.83.5
Overall Balance (After Grants)-7,239.0-4,651.1-3,542.5-435.2-107.2
Foreign Financing (Net)4,286.32,014.81,697.3101.318.0
  Loan Drawdowns5,966.44,327.93,496.8440.3257.2
  Amortization (Repayments)-4,389.7-2,341.4-1,819.7-339.0-239.1
Domestic Financing (Net)2,952.62,636.31,845.1333.889.1
  Bank Borrowing2,466.12,201.9239.0278.873.9
  Non-Bank (Net of Amortization)486.5434.41,606.255.015.3

Note: Positive financing = government borrowing; negative = repayments/deposit build-up. Source: Bank of Tanzania — Table A2 (Ministry of Finance data). Actual 2026 figures are provisional.

TICGL Strategic Analysis

What Do These Budget Numbers Mean for Tanzania?

TICGL's assessment of Tanzania's fiscal position and its implications for investors, businesses, and development partners operating in Tanzania.

🇹🇿 TICGL Overall Fiscal Assessment — January 2026

Tanzania's fiscal performance in January 2026 reveals a government that is collecting more than expected (revenue +5.4% vs target) while spending less than budgeted (expenditure -9.2% vs estimate). This combination narrows the budget deficit and reduces domestic borrowing pressure — which in turn helps keep Treasury bill yields down (5.68% in Feb 2026 vs 11.93% in Feb 2025) and lowers the cost of private sector credit. For investors, this fiscal prudence is a strong signal of macroeconomic stability and government capacity to maintain development spending without crowding out private investment.

📈
Strong Tax Buoyancy: Positive for Growth Signal
Tax revenue growing 9.9% above the January estimate — and income tax up 25.5% year-on-year — signals a broadening formal economy. This tax buoyancy (taxes growing faster than GDP) creates fiscal space for government investment without raising rates.
🏗️
Development Spending Undershoot: A Flag for Project Delivery
Development expenditure of TZS 1,061.7 billion was 26.9% below the January estimate of TZS 1,451.2 billion. This is partly due to delayed foreign loan disbursements (only TZS 260.7 Bn vs TZS 517.1 Bn estimated). Infrastructure investors should monitor project disbursement rates as a leading indicator of contract award timelines.
💡
Interest Cost Compression: A Fiscal Dividend
Interest payments of TZS 492.6 billion were TZS 55.6 billion below the January estimate, reflecting declining Treasury bill yields. As T-bill rates fall (from 11.9% to 5.7%), the government saves on debt service — creating more fiscal space for productive spending. This is partly the dividend of Tanzania's low and stable inflation.
🔴
Non-Tax Revenue: A Structural Vulnerability
Non-tax revenue of TZS 394.1 billion was 56.7% below the monthly estimate, continuing a pattern of non-tax underperformance. With the full-year target at TZS 4,681.7 billion, only TZS 3,335.9 billion has been collected in 7 months — 71.3% of what was needed by this point. Diversifying non-tax revenue sources is a key fiscal reform priority.
Tanzania Shilling Stability vs Inflation Rate 2026 | TICGL Economic Analysis
Bank of Tanzania · March 2026 Monthly Economic Review

Tanzania Shilling Stability
vs. Inflation Rate

An in-depth TICGL analysis of the relationship between TZS exchange rate movements and domestic inflation, drawn from the Bank of Tanzania's official March 2026 data.

Data Period: Feb 2025 – Feb 2026
Published: April 2026
Dar es Salaam, Tanzania
TZS/USD (Feb 2026)
2,570
▲ 3.14% annual depreciation
Headline Inflation
3.2%
━ Unchanged YoY (Feb 2025)
Core Inflation
2.1%
▼ Down from 2.2% (Feb 2025)
Central Bank Rate
5.75%
━ Held Q1 2026
Executive Overview

How Stable Is the Tanzanian Shilling Against Inflation?

Tanzania's macroeconomic landscape in early 2026 presents a nuanced picture: the Tanzanian shilling has depreciated modestly against the US dollar, yet domestic inflation has remained remarkably contained — well within national and regional benchmarks. This analysis unpacks the relationship between currency movements and price stability.

Key Finding: The Tanzanian shilling averaged TZS 2,570.24 per USD in February 2026, representing a moderate annual depreciation of 3.14% compared to TZS 2,492.05 in February 2025. Despite this, headline inflation held steady at 3.2% — well within the national target band and both SADC and EAC regional convergence benchmarks.
💱
Controlled Currency Slide
The shilling's 3.14% annual depreciation is described by the Bank of Tanzania as "gradual," supported by active liquidity management and Bank participation in the Interbank Foreign Exchange Market (IFEM). The Bank made a net sale of USD 128.8 million in February 2026 to maintain orderly market conditions.
📊
Inflation Decoupled from FX
Despite currency softness, inflation remained anchored. Core inflation eased to 2.1%, energy inflation fell sharply to 2.8% from 5.2%, and food inflation held at 5.7%. This decoupling suggests effective monetary policy transmission and sufficient domestic supply buffers.
🏦
CBR Held at 5.75%
The Monetary Policy Committee held the Central Bank Rate at 5.75% for Q1 2026, signaling confidence in the inflation trajectory. The 7-day IBCM rate remained closely aligned with the CBR, demonstrating effective transmission of the monetary policy stance.
⛽
Oil Prices: A Key Buffer
Retail pump prices for petrol, diesel, and kerosene trended downward in Feb 2026, mirroring softer global white petroleum product prices. This was a key factor preventing currency depreciation from feeding through to domestic energy costs.
Exchange Rate Trend

TZS/USD Exchange Rate Movement (2018–2026)

The Tanzanian shilling has followed a controlled depreciation path over the long term, with the Bank of Tanzania actively managing volatility through IFEM interventions. Annual average rates show a steady but measured weakening trend.

Annual Average TZS per USD Exchange Rate
2018–2026 (Feb 2026 monthly average)
ANNUAL TREND
Source: Bank of Tanzania, Selected Economic Indicators (Table A1) & IFEM data (Feb 2026)
Monthly TZS/USD Average (Feb 2025 – Feb 2026)
Weighted average exchange rate from IFEM
MONTHLY
Source: Bank of Tanzania IFEM data, Chart 2.4.3
IFEM Transaction Volume vs Exchange Rate
USD millions traded vs TZS/USD rate
MARKET DEPTH
Source: Bank of Tanzania — IFEM monthly data

"The gradual nature of the exchange rate adjustment, supported by active liquidity management, continues to maintain the shilling's competitiveness while anchoring expectations against the backdrop of rising global oil prices and external logistical pressures."

— Bank of Tanzania, Monthly Economic Review, March 2026
Inflation Analysis

Tanzania Inflation Breakdown — February 2026

Headline inflation stood at 3.2% in February 2026 — unchanged year-on-year — reflecting a balance of easing core and energy pressures offset by seasonal food price dynamics.

Headline Inflation Components (Feb 2026)
Annual % change by CPI category
CPI BREAKDOWN
Source: National Bureau of Statistics, Bank of Tanzania — Table 2.1.1
Core vs Food vs Energy Inflation Trends
12-month % change, Feb 2024 – Feb 2026
TIME SERIES
Source: NBS, Bank of Tanzania — Tables A9(i) & A9(ii)
Inflation Contribution to Headline Rate — February 2026
Each component's contribution in percentage points to overall 3.2%
CONTRIBUTION ANALYSIS
Core Inflation 1.6 pp
Unprocessed Food 1.4 pp
Energy, Fuel & Utilities 0.2 pp
Total: 3.2% | Source: Bank of Tanzania Chart 2.1.2 Computations
Combined Analysis

Shilling Depreciation vs. Inflation: Side-by-Side Trend

The most critical question for investors and businesses: does currency weakness fuel inflation? Tanzania's data through February 2026 tells a story of managed divergence — the shilling has softened, but inflation has not followed suit.

TZS/USD Rate vs Headline & Core Inflation (Dual Axis)
Monthly — Feb 2025 to Feb 2026 | Left: TZS per USD | Right: Inflation %
DUAL-AXIS COMPARISON
Source: Bank of Tanzania IFEM data; NBS CPI data — compiled by TICGL

🔍 TICGL Key Insight: The Transmission Gap

In most economies, a depreciating currency raises import costs, which then push up domestic prices. In Tanzania's case, the 3.14% annual TZS depreciation has not translated proportionally into inflation — largely because: (1) oil import costs actually declined 16.6% in the year to Feb 2026 due to softer global prices; (2) food supply reserves remain adequate with NFRA holding 560,008 tonnes; and (3) the Bank's monetary policy has kept credit costs stable. This transmission gap is a positive signal for business planning in Tanzania.

Monetary Policy Context

Bank of Tanzania's Policy Response

The Central Bank Rate, interbank market rates, and reserve management all play critical roles in the shilling-inflation relationship. Here's what the data shows about policy effectiveness.

Interest Rates Structure (Feb 2025 – Feb 2026)
CBR, IBCM, Treasury Bills, Lending & Deposit Rates
RATES TREND
Source: Bank of Tanzania Table A4 — Interest Rates Structure
Money Supply Growth (M3) vs Inflation
Annual % growth — M3 money and headline inflation
MONEY & PRICES
Source: Bank of Tanzania — Table 2.2.1 & Table A1
Monetary Paradox: Extended broad money (M3) grew at 24.5% year-on-year in February 2026, and private sector credit expanded 24.4% — yet inflation remained at just 3.2%. This apparent paradox is explained by strong productive sector absorption of credit (particularly mining at +103.9%, trade at +48.7%) and Tanzania's growing economic capacity, which has allowed money supply expansion without proportionate inflationary pressure.
Data Tables

Historical Data: Exchange Rate & Inflation

Comprehensive tabular data for analysis, benchmarking, and investment planning. All figures sourced directly from the Bank of Tanzania March 2026 Monthly Economic Review.

Table 1: Monthly Exchange Rate vs Inflation (Feb 2025 – Feb 2026)

PeriodTZS/USD (Avg)YoY FX ChangeHeadline Inflation %Core Inflation %Food Inflation %Energy Inflation %FX vs Inflation Spread
Feb 20252,492.05Baseline3.2%2.5%5.0%5.4%—
Mar 2025~2,500Depreciating3.3%2.2%5.4%7.9%+0.1pp
Jun 2025~2,530Depreciating3.3%1.9%7.3%2.1%+0.1pp
Sep 2025~2,550Depreciating3.4%2.2%7.0%3.7%+0.2pp
Dec 2025~2,560Depreciating3.6%2.3%6.7%3.8%+0.4pp
Jan 2026~2,565Depreciating3.3%2.2%5.7%5.2%+0.1pp
Feb 20262,570.24+3.14% YoY3.2%2.1%5.7%2.8%Stable

Table 2: Annual Economic Indicators — Tanzania (2018–2025)

YearTZS/USD (Annual Avg)TZS/USD (End Period)Headline Inflation %M3 Growth %Private Credit Growth %GDP Growth (Const.) %
20182,263.82,281.23.5%4.5%4.9%7.0%
20192,288.22,287.93.4%9.6%11.1%6.9%
20202,294.12,298.53.3%5.7%3.1%4.5%
20212,297.82,297.63.7%15.5%10.0%4.8%
20222,303.12,308.94.3%11.6%22.5%4.7%
20232,382.12,501.43.8%14.1%17.3%5.1%
20242,597.42,374.73.1%11.1%12.4%5.5%
20252,537.62,450.23.3%24.7%23.6%6.0%

Table 3: Regional Inflation Benchmarking — Feb 2026

Country / RegionInflation (Feb 2026)vs Jan 2026Key DriverTarget Compliance
Tanzania 🇹🇿3.2%↓ from 3.3%Easing core & energy✓ Compliant
Kenya 🇰🇪4.3%DecreasingTransport, utilities easing✓ Compliant
Uganda 🇺🇬2.9%DecreasingBroad easing✓ Compliant
Rwanda 🇷🇼7.9%DecreasingServices pressure⚠ Elevated
Burundi 🇧🇮11.4%DecreasingStructural pressures⚠ Elevated
EAC Average5.9%↓ from 6.2%Regional easingRegional Avg
South Africa 🇿🇦3.0%StableFuel disinflation✓ Compliant
SADC Average5.9%↓ from 6.7%Fuel & transport disinflationRegional Avg
TICGL Strategic Analysis

What Does This Mean for Investors & Businesses?

TICGL's interpretation of the shilling-inflation dynamics for those considering investment, operations, or consulting in Tanzania.

✅
Positive: Stable Real Returns Environment
With inflation at 3.2% and a 12-month deposit rate of 9.82%, real returns on TZS-denominated instruments remain positive. The interest rate spread supports domestic investment attraction and discourages capital flight despite currency softness.
📈
Positive: Export Sector Competitiveness
A weaker shilling makes Tanzania's exports more price-competitive internationally. Gold exports rose 35.8% to USD 4,968.4 million, while tourism receipts grew 8.8% to USD 7,520.3 million — both benefiting from favorable exchange dynamics.
⚠️
Watch: Import Cost Creep
Total imports rose to USD 18,634.2 million (year to Feb 2026). While oil import costs fell due to global price softening, industrial supply and capital goods imports are rising. If global energy prices rebound, import-driven inflation could accelerate.
🔴
Risk: Secondary Income Decline
Personal transfers (remittances) fell sharply, contributing to a 50% decline in secondary income to USD 265.8 million. This is a structural vulnerability: reduced remittances can pressure the shilling and limit household purchasing power in coming months.
🏗️
Opportunity: Credit-Driven Growth
Private sector credit grew 24.4% — with mining, trade, and agriculture leading sectoral expansion. The Bank's specialized financing facilities for agriculture and MSMEs suggest a deliberate strategy of channelling credit to productive, inflation-neutral activities.
🌍
Regional Advantage
At 3.2%, Tanzania's inflation is below the EAC regional average (5.9%) and SADC average (5.9%), and close to South Africa (3.0%). This relative price stability makes Tanzania among the most predictable operating environments in East and Southern Africa.
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